In April, Kenya’s President William Ruto, during an interface with Nigerian businessman Aliko Dangote in Nairobi at the Africa We Build summit, offered a reason as to why the East African Community (EAC) broke up in 1977.
President Ruto opined that people thought there was another way other than the EAC. The Kenyan president said later that the people realised that the EAC is the only way, and that’s how it was revived. He added that the solution to the challenges within the Great Lakes region is not ‘out there’, but it’s within.
President Ruto said developing the region doesn’t start with billionaires like Dangote, but with political leaders such as him and President Museveni of Uganda.
‘In our continent, we have a challenge of leadership. If the leaders are not willing to lead from the front. If the leaders are not willing to make the decisions. The policy choices that will take our country forward, because some of the policy choices aren’t necessarily popular,’ President Ruto said.
‘It is not easy for President Museveni to say, ‘If you are not making this choice, we are not going with you.’ Banning the export of minerals is not an easy thing because there are some people who depend on it. But leaders must make choices. So, it starts with us leaders: Making the right choices,’ President Ruto added.
Local Content Bill
Five months later, President Ruto has made a political choice therein, ordering a crackdown on foreigners operating small-scale businesses. The Kenyan president contended that local traders and hawkers need to be protected. Ruto’s declaration comes amid growing debate about the increasing number of African migrants, including Ugandans, Tanzanians and Burundians, who are involved in Kenya’s informal economy.
“From next week, all [foreign] traders doing those small businesses should close them,” Ruto said in the September 2 directive, also promising to fast-track proposed legislation to preclude foreigners from certain areas of trade.
While Ruto claimed that Kenya is open to foreign investment, he insisted that investors-including Chinese traders-should create jobs and expand production rather than compete with Kenyans in small businesses.
‘We have made efforts to improve the economy; we have not improved investor confidence for hawkers to come to Kenya,’ Ruto, who is working to get a second term in office, said.
Ruto’s order came as the Kenyan Parliament deliberates on the Local Content Bill 2025, proposed by Laikipia Woman Representative Jane Kagiri. The Bill is highly protectionist, aiming to drastically limit foreigners’ participation in small businesses. Under the proposed legislation, foreign companies would be required to ensure at least 80 percent of their workforce are Kenyan citizens. Furthermore, firms would need to source at least 60 percent of their goods and services from local suppliers.
While no official statistical data show how many Ugandans work in Kenya’s informal sector, overall, the sector employs more than 15 to 18 million people. This includes thousands of regional migrants-including domestic workers and traders-who move between the two countries under the EAC frameworks and the national labour bureaus. Many Ugandan nationals migrate to major Kenyan urban centres-such as Nairobi, Mombasa, Nakuru, and Kisumu-via personal connections or informal channels.
Immediate impact
The effect of Ruto’s order has been immediate, with many Ugandans working in Kenya’s informal sector seen returning home in the course of this week. While there has not been any official pushback from Ugandan authorities, the reaction from Burundian authorities has been swift. Burundi’s Foreign minister Édouard Bizimana warned that anti-Burundian rhetoric and alleged harassment could strain bilateral relations. Burundi appealed to the EAC chairperson, Museveni, to convene a high-level summit to investigate the crackdown and uphold regional integration principles.
It is not the first time Ruto’s administration has been accused of protectionism. Three months into the current term, the administration sent mixed signals about whether it’s going to go for protectionism – which means trying to use restrictions such as tariffs to boost the country’s industry and shield it from foreign competition-or free trade-which implies the absence of trade barriers that would hinder.
Ruto’s administration said it had plans to ban the importation of goods that can be manufactured in Kenya, with the focus on steel and Iron products. Though Ruto’s administration said that it was targeting steel and Iron products from outside East Africa with a sharp focus on China, South Africa, Japan and India, the move left many actors within the region nervous as they can’t read Nairobi’s next moves.
Before he announced the possibility of banning the importation of goods that can be manufactured in Kenya, Ruto had struck the right notes for believers in free trade when he moved to calm down tensions over the Ugandan milk imports that some in Kenya simply don’t want. Ugandan milk has an edge in the Kenyan market because it’s cheap.
‘Uganda should bring cheaper milk because they can produce it much more cheaply. We should be adding value to our milk,’ Ruto said. ‘We are quarrelling with Uganda because we have refused to take up our rightful place in our continent. We should have taken the next steps as we allow Uganda to take up the space as we move ahead.’
Moses Kuria, then Ruto’s minister for Trade and Investment, added a dose of comedy to the Kenya-Uganda trade standoff.
‘I spoke to the minister of Trade for Uganda and told him that Kenyan farmers are complaining that Ugandan eggs are flooding our market. He told me something profound: that every week Uganda imports one million day-old chicks from Kenya, which eventually mature. How can you refuse eggs from your own chicken?’ Kuria asked.
Not the first time
Kuria’s take stemmed from 2020 when Kenya had restricted exports of poultry and dairy products from Uganda, straining the relationship between the two neighbouring countries. The issue on poultry was resolved after Uganda threatened to ban Nairobi from exporting its goods to the landlocked neighbour. After Ruto’s recent speech, it has been reported that Kenya has taken steps to lift bans on Uganda’s milk products, with Kuria holding discussions with Uganda’s minister for Agriculture, Animal Industry and Fisheries, Frank Tumwebaze, to compare notes on how this can happen.
Though Kuria talked a good game, Ruto’s decision to impose a ban on some imported goods is in line with the administration’s alliance of Kenya Kwanza (Kenya first).
Kenya first can be connected to US President Donald Trump’s America first mantra, in which he advocated American nationalism and non-interventionism and also fought trade wars with China, America’s competitor in the fight for global supremacy and influence.
In the manifesto, Ruto lamented that Kenya’s food imports, which inevitably include those from Uganda, have increased from 10 to 17 percent of goods imported over the last decade, which, in actual terms, he said translates to a 2.5-fold increase from $1.2b to $3b. Depending on foreign food, he said, has increased the country’s vulnerability to global food supply shocks such as the one the country is experiencing.
‘Moreover, the manufacturing that is not agro-based is highly dependent on imported raw materials such as metals, chemicals and plastics. As noted, agriculture is our most globally competitive sector. Adding value to our agricultural exports is a more viable route to grow our manufactured exports than industries that are heavily dependent on both imported machinery and raw materials, and whose only value addition is labour,’ Ruto said in his manifesto.
Although Ruto frequently uses regional platforms to rhetorically call for the elimination of non-tariff barriers (NTBs) and champion intra-African trade under the African Continental Free Trade Area (AfCFTA), he has been accused of implementing domestic administrative orders that routinely bypass long-term consensus-building. Ruto’s crackdown on foreigners operating small businesses will also once again test the country’s trade relationship with Tanzania.
Protectionist postures
In 2025, Tanzania led the way in restricting non-citizens from operating in a range of small businesses. The restrictions led to concern among Kenyan traders operating in Tanzania and prompted bilateral discussions between the two governments. The two biggest countries in the region actively sought to resolve the dispute while fostering their broader economic cooperation. Business owners in Kenya soon received promising assurances, indicating that they would be exempt from certain restrictions, paving the way for continued growth and collaboration.
This year, Uganda’s Ministry of Internal Affairs deported about 169 illegal foreign workers. These individuals, hailing from more than 10 different nations, were apprehended following intelligence-led security operations in Kampala for visa overstays, undocumented business activities, and suspected cyber-scams.
Under the EAC Common Market Protocol, countries agree to facilitate the movement of people, workers, services and capital among member states, alongside rights relating to establishment and residence.
Nevertheless, those provisions do not mean that citizens of an EAC Partner State can automatically operate every type of business in another member country. National laws, licensing requirements and specific sector commitments remain relevant.
The original EAC collapsed in 1977 due to political conflicts, uneven economic benefits, and ideological differences among Kenya, Tanzania, and Uganda.
In terms of unequal economic gain, it is said that Kenya benefited the most from the common market and industrial investments, while Tanzania and Uganda felt they bore a disproportionate share of costs without equal returns. In terms of political ideology, Kenya followed a capitalist economic model, while Tanzania pursued African socialism (Ujamaa), and Uganda, under military rule, was non-committal to the community.