- The Asian exit was as a result of Jomo’s policy to swiftly Africanise commerce across Kenya.
- The policy may not have been anchored on any explicit law or regulation, but trade licensing officers clearly understood their responsibility to use “discretion” to decide who to license.
- President Kenyatta had made a significant political statement that moneyed Asians should leave distribution and retail to Africans and move to Nairobi Industrial Area to manufacture goods.
I will re-live my 1950/60s memories of how quickly Karatina (a transit town on the main highway north to Ethiopia) transitioned from an Asian controlled commerce to what we see today, following President Jomo Kenyatta’s transformational Africanisation policies immediately after independence. And this account can be replicated for most rural towns of colonial Kenya including the bazaar streets of Nairobi where businesses were essentially controlled by Asians.
On your right as you enter Karatina after crossing the railway, there is a shop written R.D. Patel, which is the only Asian owned business remaining in town. In 1950s the pioneer “R.D” was also called “Mwalimu”, the headmaster of Karatina Indian School (renamed Karatina DEB School after independence). There were no schools for Africans in Karatina, and we had to trek for miles to schools in villages outside the town.
The town’s resident population was about 60 percent Asian (Patels, Shahs, Ismailis, Pakistanis, Arabs, and Sikh railway administers)... African traders were fewer and located on one side of the town, doing minor retail trades. Workers mostly commuted from villages around the town. Immediately after independence, demographics significantly changed when most of the Asians suddenly exited the town. One of them was the bookseller Rughani (Mehta) who transferred to Nairobi to set up Text Book Center and later Sarit Center .
The Asian exit was as a result of Jomo’s policy to swiftly Africanise commerce across Kenya. The policy may not have been anchored on any explicit law or regulation, but trade licensing officers clearly understood their responsibility to use “discretion” to decide who to license. President Kenyatta had made a significant political statement that moneyed Asians should leave distribution and retail to Africans and move to Nairobi Industrial Area to manufacture goods.
There was also the painful predicament facing Asians. After independence they had to quickly decide what citizenship they preferred- to remain British (or Indian) citizens or take up new Kenyan citizenship. Many opted to remain British and moved to UK and other British dominions (Canada, Australia etc.). It later became chaotic when UK decided to limit entry of its Asian overseas “citizens” by using entry quotas. This citizenship dilemma cost the Asians their trade licences.
Of course, there were shortcomings in the licensing process as corruption naturally crept in. A good number of Asians became business sleeping partners with the licensed Africans, allowing Asians time to resolve their citizenship and relocation predicaments. When Moi came to power a number of Asians actually returned to Kenya and bought back their businesses.
To help Africans to buy and service the Asian businesses, Jomo set up ICDC (Industrial and Commercial Development Corporation) to provide credit, and KNTC (Kenya National Trading Corporation) to support development of new African distributors and wholesalers. And the new government banks KCB and National Bank were generously supportive of African entrepreneurs. And within ten years of independence, commercial transition had essentially been achieved.
An industrial miracle was simultaneously taking place as Asians took up Jomo’s challenge to move into manufacturing, creating an industrial sector that was the envy of the region. The government on its part protected the new industries from unfair competition from imports. Sadly, manufacturing substantially collapsed during the subsequent Moi presidency as the economy was blindly liberalized, and uncontrolled imports permitted. And this has essentially remained the case today.
Other unwritten business Africanisation policies forbade manufacturers to directly distribute, transport, wholesale or retail their goods. These practices have generally remained loosely in practice today.
A parallel policy by Jomo’s government was at work to accelerate Kenyanisation of expatriate jobs in foreign companies. The Kenyanisation Bureau was formed to track recruitment and training of Kenyans by foreign companies to take over from expatriates. Accelerated career development plans for Kenyans were conditions for granting expatriate work permits by the Immigration Department. I was a beneficially of this policy as a group of us were selected by Shell after Form Six and sent to UK universities in 1970 to undertake Chemical Engineering degrees.
Over time Kenya businesses have generally kept up with global developments. However, courageous policies are definitely needed to empower manufacturing through protection from unfair competition from imports. If Jomo were to come back today, we would be at pains trying to explain how we allowed manufacturing to decline.