Politics behind Tata Chemicals closure and why it has attracted global attention

The decision by President William Ruto to order the closure of Africa’s largest manufacturer of natural soda ash, Tata Chemicals Limited has attracted local and international attention with pundits warning of a strain relation between Kenya and India where the company's investors originate.

The President on Thursday directed the Mumbai-based firm to pack and leave, announcing that his administration would give the license to a new company, who will be required to establish industries that add value to the resources extracted from the area.

He accused the company of extracting resources from Lake Magadi and exporting them without sufficiently contributing to the local economy. “I told them to pack up their things and leave. Let them go. These people come here, take our resources and transport them to India and other countries,” he said.

International media houses led by the BBC, Reuters, CNBC, and The Hindu covered the news of the closure of the company, extensively detailing the economic implications of the company between Kenya and the countries that the Tata Chemicals export their end product.

According to the international outlets, the company - part of Indian conglomerate Tata Group - operates at Lake Magadi, about 120km southwest of the Kenyan capital Nairobi exporting more than 350,000 tonnes of soda ash annually, exporting it to markets including India, Southeast Asia, the Middle East and elsewhere in Africa.

Kenya is the world's fourth-largest producer of natural soda ash - the common name for sodium carbonate - accounting for 1% of global production, according to the US Geological Survey.

The Hindu reported that the Tata Chemicals stock fell 2.17 per cent to 628 Indian Rupees on the Bombay Stock Exchange (BSE), the oldest stock exchange in Asia, located on Dalal Street in Mumbai, India.

The decision prompted economic experts to warn of severely strained economic relations with Indian business interests, sparking heated domestic and international debate over investor confidence.

Locally, Wiper Patriotic Front (WPF party leader Kalonzo Musyoka described Ruto’s decision as a ‘new colonialism dressed in a Ruto crony-era concession suit’.

According to Kalonzo, the President’s pronouncements preempted the judgement of a court slated for next month, October 23, between the company and the Ministry of Mining over the Ministry’s decision to suspend the company.

“Separately, Kajiado County’s claim of approximately Sh17.4 billion in unpaid rates, quashed by the Court of Appeal in October 2025, was revived when the Supreme Court permitted a fresh appeal on June 19 2026, precisely because a serious constitutional question under Article 209 on the taxing powers of counties remains unresolved,” Kalonzo said.

He added “In other words: on the very question of who owes what at Magadi, and on what terms operations may continue, the courts have not yet spoken. For a Head of State to stand at a public rally and pronounce the outcome to declare an operator expelled and a successor appointed, while judges are still writing their judgment, is contempt for the separation of powers. It is the substitution of the podium for the bench.”

In a statement, Kalonzo claimed there was a pattern under Ruto’s regime where a public asset is declared to be underperforming so as to be awarded to the predetermined investors.

“We have watched this pattern before, and Kenyans have watched it under more than one administration. A public asset is declared to be underperforming. The declaration is true. A rescue is announced. The rescue is opaque. And when the paperwork finally surfaces, often in a courtroom, years later, the beneficiaries turn out to be politically connected persons whose names the public was never allowed to see,” Kalonzo said.

He demanded that the government disclose the identity of the incoming investor or investors, together with the full beneficial ownership register to the level of natural persons, as required by law as well as submit the proposed concession to the National Assembly and the Senate for ratification under Article 71 and the 2016 Ratification Act, with full public hearings before any license is issued.

Additionally, Kalonzo demanded that the government consulted the Maa residents through conducting genuine, documented public participation in Kajiado — in Maa, in Kiswahili, in the manzi and the manyattas, not in Nairobi boardrooms so as to obtain the community’s input before, not after, the deal.

“The government must settle the colonial question at last, establish a transparent process to determine what is owed to the Maasai community for the 1904, 1911 and 1928 dispossession, and how the host community will hold an equity stake in whatever entity mines their lake from now on. The people who live on the shore must own a share of the shore,” he said.

To Kalonzo, the Soda Ash company was a colonial wound that has never been dressed saying the Magadi concession did not begin with a negotiation between equals.

He recounted that the concession began in 1904 in the shadow of the first Anglo-Maasai Agreement, when the Maasai were moved off their grazing lands to make room for the settler economy and the Uganda Railway, noting that further instruments in 1911 and 1928 consolidated a private concession of roughly 222,778 acres, carved directly out of what had been declared the Maasai Reserve.

“The Maasai were never asked, and never compensated. Then came independence and the wound was not dressed. It was inherited. In 2004, long after independence, the Government did not terminate this colonial arrangement, subject it to public scrutiny, or renegotiate it in favor of the host community. It extended it to the year 2053. It was done by executive fiat,” he said.

He added, “I will not pretend the Magadi concession was ever handled in the light. It was not. But the whole purpose of the 2010 Constitution was to ensure that no future government could ever again do what was done in 1904, in 1928 and in 2004.

Separately, Nairobi Senator and Linda Mwananchi Movement leader Edwin Sifuna heavily criticized the "pack and go" directive warning that such executive actions sabotage Kenya’s reputation as a secure destination for foreign direct investment

“When companies make decisions about where to put their investments, the dispute resolution regime in place is key because disputes arise all the time. The “Mambo Matatu, pack and go” approach where the President can just shut down your business is very bad for investment and consequently, job creation. It is why we in Linda Mwananchi insist on a return to the Rule of Law. That's our Plan,” he said.

The Democracy for Citizens Party (DCP) leaders suggested that the true motive in the closure of the company was lithium, or oil, beneath the Magadi basin.

“The flimsy excuses given are just a decoy. The truth of the matter is, there are huge deposits worth trillions of shillings of lithium metals underneath the Magadi area. Further, there are huge oil prospects in the same vicinity within which Tata Chemicals Limited operates,” Nyandarua Senator John Methu said.

However, despite the national and international backlash, the government has remained bullish that Tata Chemicals has to go, despite the legal dispute that hangs in the courts.

According to Principal Secretary for Industrialization Dr Juma Mukhwana, the Kenya-India trade relationship has been an ‘imbalance’ and he sees the closure of Tata Chemicals as one of the ways to correct saying friendship must accommodate an honest conversation about trade.

“According to official Indian trade figures, bilateral merchandise trade reached approximately US$4.31 billion in the 2025/26 financial year. India exported approximately US$4.01 billion worth of goods to Kenya, while importing only about US$290 million from Kenya. For approximately every dollar India bought from Kenya, Kenya bought nearly 14 dollars from India,” he said.

He added, “That is an extraordinary imbalance. More importantly, the structure of this trade tells an even bigger story. India sells Kenya petroleum products, pharmaceuticals, machinery, vehicles, electrical equipment, plastics, chemicals and other manufactured products. Kenya's exports to India include tea, coffee, soda ash, vegetables, scrap metals and other largely primary or minimally processed products.

The pattern is familiar: Africa exports commodities. Asia exports manufactured products. That structure cannot remain the foundation of a 21st-century partnership. We must transform it.”