Kenya’s small traders and importers have launched a protest against the influx of Chinese into Nairobi’s retail scene, warning that unregulated entry of the foreigners will kill local businesses and render thousands of Kenyans jobless.
Thursday, the angry traders told government officials that they have been unable to compete with the Chinese traders, including hawkers, because of the foreigners’ ability to ship in cheap products that they use to undercut rivals.
Ben Mutahi, the chairman of the Kenya World Wide Importers and Traders Association (KWITA), said the small-scale sector, which employs about 50,000 traders directly and a million more indirectly, was at risk of dying.
Mr Mutahi said the Chinese traders have been able to undercut local rivals by importing cheaply from their country's manufacturers, instead of dealing with local wholesale importers.
“They [Chinese traders] are all over in Gikomba market and Biashara Street. It is very hard for us to compete with them,” Mr Mutahi told the Business Daily on the sidelines of a government forum on combating illicit trade.
He claimed local traders pay high taxes to import goods from China, unlike their Chinese counterparts who do not pay anything.
Besides, the traders argued, the undercutting by the Chinese traders pose a big threat to any government plans to revive the manufacturing sector – a key plank of President Uhuru Kenyatta’s Big Four agenda.
"If the Chinese are here as investors, let them go and start factories, and leave retail business for Kenyans,” Mr Mutahi said.
Trade Principal Secretary Chris Kiptoo promised the traders that the government will address their concerns.
Dr Kiptoo, who termed the issue “sensitive”, said the matter was being handled through “high-level” intervention at the Immigration ministry.
“The situation is being handled by the Immigration Department,” he said without offering further details.
Mounting tensions between the Kenyan traders and their Chinese counterparts is expected to become a big test to Kenya’s diplomatic relations with China.
Beijing has in recent years risen to occupy the top position in Nairobi’s import table.
Since coming to power five years ago, Mr Kenyatta’s policy of looking East has mirrored that of his predecessor Mwai Kibaki.
China was the largest exporter to Kenya in May, having shipped out goods worth Sh48 billion to the East African nation, the highest ever monthly import bill by a single nation.
Chinese exports to Kenya have increased in the past decade, helped by demand for cheap China-made products.
China has also extended its position as Kenya’s biggest lender, with the Sh534 billion it disbursed in loans by the end of March raising its share of the East African nation's bilateral debt to 72 per cent.
Meanwhile, Kenya’s indebtedness to China grew by Sh453 billion since 2014, mainly on account of loans to build mega infrastructure such as the standard gauge railway.
Latest Treasury data shows that by the end of March, Kenya’s total outstanding bilateral debt stood at Sh741 billion, having risen by Sh71.2 billion from July 2017 when the fiscal year began.
Mr Kenyatta has following his re-election pledged to create more jobs for Kenyans by focusing State resources to what he calls the “Big Four Agenda” -- made up of manufacturing, food security, affordable housing and healthcare sectors -- to jumpstart the economy.