Kenya must stop sending investors away with pack and go sign

Tata Chemicals factory in Magadi, Kajiado West constituency Kajiado County. [Wilberforce Okwiri, Standard]

President William Ruto’s directive to shut down Tata Chemicals Magadi has raised many questions far bigger than the fate of companies operating in Kenya today. The key one: is the country becoming a hostile place to invest?

Further, what are the authorities doing to improve the environment for any foreign investor? What incentives are we giving legitimate foreigners with enough capital, to choose Kenya over our neighbours as their investment destination?

Those questions should worry every Kenyan. Tata Chemicals Magadi is not an obscure roadside enterprise. It is a major industrial operation that has extracted soda ash from Lake Magadi for decades, employing thousands of Kenyans directly and indirectly while earning Kenya valuable export revenues. Its products reach markets in India, South-East Asia, the Middle East and Africa. Any decision affecting such an investor therefore carries far-reaching consequences.

The government may have legitimate concerns about environmental protection, land, resource management or the terms under which natural resources are exploited. Those concerns must be addressed with the right procedures followed. But a serious government does not resolve complex investment disputes by issuing what appears to be a “pack and go” order.

Investors need to know that contracts will be respected, licences will be handled transparently and disputes will be resolved through established institutions rather than abrupt political directives. When a multinational investor that has operated in Kenya for decades suddenly finds itself staring at closure, other investors inevitably take notice.

The reported legal battle surrounding Magadi makes the situation even more troubling. If the courts are already seized of matters concerning the company, the Executive must resist the temptation to appear to dictate the outcome. Kenya cannot preach the rule of law to citizens while undermining the same principle when dealing with powerful economic actors.

Tata Chemicals is part of the wider Tata Group, one of India’s most influential corporate institutions. India is an important trading and investment partner for Kenya. A dispute with one of its flagship companies should therefore be handled with extraordinary care and maturity.

But this is not about protecting a foreign investor at the expense of Kenyans but about protecting Kenya's reputation. If the government believes Tata Chemicals has violated its obligations, let it produce the evidence, follow due process and allow the appropriate regulator and courts to determine the remedy.

If the company owes the country billions, as alleged in the dispute, recover the money through lawful means. If environmental safeguards have been breached, enforce them. What Kenya cannot afford is uncertainty masquerading as decisive leadership.

The country desperately needs jobs, manufacturing, exports and foreign investment. It cannot simultaneously invite investors to Kenya and frighten them away with arbitrary closure threats. Kenya welcomes investment, but it must also respect the law. Government power must not become an investment risk.