Immigrants not to blame for Kenya's economic problems

Hundreds of Burundian Nationals at the Burundi Embassy along Denis Pritt road, Nairobi.[Kanyiri Wahito, Standard]

On September 2, President William Ruto directed the government to begin taking action against foreign nationals operating small businesses, arguing that certain forms of small-scale trade should be reserved for Kenyans. The government has subsequently sought to clarify that the President was speaking within the context of the proposed Local Content Bill and that foreign traders and employees who possess the required permits and licences remain legally protected. Nevertheless, the political message surrounding the remarks is significant because it places foreign nationals at the centre of a debate about unemployment, competition and economic opportunity in Kenya.

There is a legitimate policy question about whether particular economic activities should be reserved for Kenyan citizens and whether the government is adequately protecting small Kenyan enterprises. Kenyan traders operate in an extremely difficult environment characterised by high taxation, expensive credit, weak consumer purchasing power, regulatory pressures and limited access to capital. It is therefore understandable that the government would want to address unfair competition or ensure that businesses operating in sectors designated for citizens comply with the law.

The problem arises when the presence of foreigners is presented as a fundamental cause of Kenya’s economic difficulties. There is a substantial difference between enforcing immigration and business regulations and constructing a political narrative in which foreign nationals are collectively responsible for the economic insecurity experienced by Kenyan citizens.

The evidence does not support the broader proposition that immigration is inherently damaging to host economies. Research conducted jointly by the Organisation for Economic Co-operation and Development and the International Labour Organisation in 2018 across ten developing countries found that immigrants contribute to labour markets, economic growth and public finances. The report does not suggest that immigration produces identical outcomes in every country or that there are never distributional costs for particular workers or sectors. It does, however, demonstrate that the economic effects of immigration are considerably more complex than the assumption that immigrants simply take jobs or businesses away from citizens. In many circumstances, immigrant workers increase economic activity, contribute to public revenues and create employment opportunities for citizens.

South Africa provides an especially important comparison for Kenya because it demonstrates both the economic complexity of immigration and the consequences of allowing economic grievances to become associated with nationality. South Africa has experienced repeated episodes of xenophobic violence against immigrants, particularly against migrants from other African countries. Foreign nationals have frequently been accused of taking jobs, operating businesses that should belong to South Africans, placing pressure on public services and contributing to crime. These claims have become politically powerful because they operate within the context of South Africa’s extraordinarily high unemployment, inequality and persistent economic exclusion. Yet research into the economic contribution of migrants presents a considerably more complicated picture.

This does not mean that immigration has no negative consequences or that every Kenyan worker automatically benefits from the arrival of a foreign worker. Competition can be particularly difficult for workers and small businesses operating in the same sectors, and governments have a responsibility to prevent exploitation, ensure compliance with labour and immigration laws and address unfair business practices. The important point is that these challenges require economic and regulatory interventions rather than the assumption that removing immigrants will automatically create employment or prosperity for citizens. The evidence from South Africa suggests that the relationship between migration and employment is more complicated than a fixed number of jobs being divided between foreigners and citizens.

This distinction becomes particularly important when considering the political incentives behind anti-immigration rhetoric. Kenya’s economic problems are real, but most of them cannot plausibly be attributed to immigrants. Youth unemployment, high public debt, rising taxation, inadequate industrialisation, expensive credit, weak purchasing power and persistent inequality are structural problems that have developed over many years. They are influenced by government policy, economic institutions, public expenditure, corruption, political patronage and the broader structure of Kenya’s economy. Removing a foreign trader from a market does not address these underlying problems.

Blaming foreigners can therefore provide a politically convenient explanation for economic conditions that are much more difficult for governments to confront. A Kenyan youth who cannot find employment may understandably feel that somebody else is occupying an opportunity that should belong to them. But the government has a responsibility to explain why those economic conditions exist in the first place. If Kenyan citizens cannot find decent work or establish sustainable businesses, the central question should be why the economy is failing to create sufficient opportunities, rather than simply identifying the nationality of the people participating in the economy.

Kenya should also recognise the contradiction inherent in celebrating the movement of Kenyans abroad while treating migration into Kenya as inherently problematic. The government actively promotes opportunities for Kenyans to work in other countries, and remittances from the Kenyan diaspora are an important source of foreign exchange and household income, and indeed our primary source of foreign funds, surpassing all our trade export activities. The economic logic behind this policy is straightforward: Kenyans who move elsewhere can acquire employment, generate income, establish businesses and send money home, while destination countries benefit from their labour and skills. There is no reason to assume that the economic logic reverses when the foreigners are entering Kenya.

In this regard, Kenyans must not allow the rhetoric that has been presented to them to stoke anger against the foreigners that they see around them. If anything, we ought to recognise that, just as is the case in South Africa, the anger turns to the African immigrant eking out a living selling tea or barbing hair, whilst the biggest threat to our economic prosperity lies much farther up, amongst the foreign elite that we would never threaten. We must instead band together to protect those foreigners amongst us that may be feeling fear amidst the conversation currently being had.

Ms Njahira is an international lawyer.