Kenya locks out young and low-paid foreign workers

Kenya has shut the door on foreigners seeking permits for jobs that pay less than Sh168,000 per month or Sh2 million per year.
The move, which marks a major labour market policy change, also bars foreigners aged 35 years or less from being issued with work permits.
The changes are contained in fresh regulations that Immigration minister Otieno Kajwang’ has published in a special Kenya Gazette notice. 

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“The Director of Immigration Services shall not issue a residence or work permit to any person unless that person has … at his or her full and free disposition an assured annual income of at least $24,000 or its equivalent in Kenya shillings,” reads part of the regulations aimed at curbing the entry of foreigners into Kenya’s job market.

Senior Ministry of Immigration officials, who did not want to be named because they are not authorised to speak to the press, said the new regulations are particularly targeted at foreigners holding jobs that can be handled by Kenyans.

The new rules have also locked out expatriates from employment in the medical, real estate, engineering, accountancy and legal professions.

Expatriates wishing to practice in these professions can only gain entry as investors with green shoe operations or through joint ventures with locals but on condition that they have the required professional qualifications.

Green shoe operations refer to businesses that start from scratch.

Foreign investors eyeing opportunities in agriculture, mining and manufacturing sectors or consultancy work outside the professions will be issued with a special permit provided they have the requisite capital, qualifications and regulatory approvals for the intended projects.

Kenya’s labour market experts said the new rules are needed to preserve jobs for Kenyans as concern rises over the number of expatriates holding basic jobs such as driving and retail sales.

“The regulations are needed to prevent foreigners from taking jobs that can be done by Kenyans,” said Sammy Onyango, the chief executive of Deloitte East Africa.

“Expatriates are also important but we should engage them largely as investors or professionals coming in to offer rare skills and build local capacity.” It remains to be seen how the government will handle the thousands of skilled and semi-skilled foreign workers employed in key infrastructure projects such as road and housing construction.

If strictly applied, the regulations could particularly affect hundreds of Chinese working on Kenyan roads and who are known to earn much less than the threshold of Sh2 million per year. 

United Nations agencies, embassies and local subsidiaries of multinationals such as East African Breweries, Nestle, Bharti Airtel and Safaricom, are the leading private employers of foreigners.

Expatriates working for foreign-owned firms usually hold senior positions such as   executives or directors earning more than local staff in similar positions, partly due to higher allowances.

The regulations are in response to recent public concern over the rising number of expatriates – mainly from Asia – holding basic jobs such shop assistants or bulldozer drivers all of which can be handled by locals.

The Immigration Ministry last year came under criticism from MPs who accused its officials of irregularly issuing work permits to foreigners.
Mr Kajwang’ denied the allegations, saying most of the foreigners came in under arrangements with local partners that allow them  to bring in some workers from abroad. 

A total of 26,077 foreigners were issued with work permits between 2007 and April last year but only 14,000 were active. The rest had either expired or been cancelled.

Indian citizens held the highest number of work permits at 10,581, followed by Chinese (3,494), Britons (2,700), and Americans (1,593).

The number of Asian expatriates, led by India and China, has risen steadily in step with increased foreign direct investments in Kenya.

Kenya had issued 21,383 work permits as of last year, more than two times the 10,812 that had been issued by 2007, according to the Economic Survey 2012.

Some 23,498 entry permits were renewed, nearly five times the 4,743 renewed by 2007, revealing that more foreign workers were staying longer in the country.

Kenya has also retained a tight grip on the inflow of labour from the East African Common Market despite abolition of work permits for EAC citizens under the common market protocol. 

Since the launch of the EAC common market in July 2010, Kenya has only scrapped work permit fees for Rwandans.

The tighter immigration rules came as the private sector’s ability to create new jobs dropped to 47,000 last year compared to 56,000 in 2010.

That drop came on the back of a slowdown in economic growth to 4.4 per cent from 5.8 per cent in the previous year.

More than 700,000 high school and college graduates enter the labour market every year and the creation of a total of 520,100 jobs last year means the ranks of the jobless rose by more than 200,000, deepening unemployment.

However, some analysts argue that the new immigration rules are inadequate and are sidestepping the real causes of Kenya’s high unemployment rate.
“We should focus on making our professionals more competitive both in the local and international labour market.

Ring-fencing a few local jobs from expatriates will not solve the problem,” said David Muturi, the executive director of the Kenyan Institute of Management.

Mr Muturi said that bringing in the relatively more expensive foreign labour is usually a last resort for companies and is a problem the government can solve through quality of education and training.

“If we improve the competitiveness of our labour force, we should be able to export a lot more of our labour to the global market,” Mr Muturi said.
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