Immigration Protectionism in Kenya

Out of Africa,” NYTimes, 12 July 2012

NAIROBI — I live in the most cosmopolitan city in East Africa. Here, going about one’s daily business, it’s easy to cross paths with Ugandans, Tanzanians, Rwandans, Sudanese, Somalis, Ethiopian and Eritreans. Add to that a dollop of Nigerians, Ghanaians, Cameroonians and Congolese, not to mention Europeans, Americans and Indians, and you have a dynamic mix of skills and histories in one unusual place.

But as of this week, the international flavor of Nairobi — as well as the economic progress of Kenya at large — is suddenly in peril.

Kenya just slapped age and salary restrictions on the issuing of work permits to foreign nationals. Permission to work will be given only to those foreigners over the age of 35 making more than $24,000 annually. There will also be a cap at the high end of the income scale: foreign medical, accounting, engineering, legal and real-estate professionals are banned from coming to Kenya outright.

The announcement, made recently by the immigration minister, Otieno Kajwang, is a halfhearted attempt to shore up employment figures that are admittedly dismal for Kenyan youth, even those with university degrees. Sixty-five percent of young Kenyans, or some 10 million people, are without work. Fewer foreign workers means more local jobs, the protectionist logic goes.

The new policy could  particularly affect the flow of low-wage Asian immigrants to Kenya and neighboring countries. At present, Chinese and Indian nationals hold a combined 14,000 Kenyan work permits, and can be seen driving steamrollers and managing restaurants far into the hinterlands. Though the new  measures are thin gruel compared with the wholesale expulsion of Asians from East Africa in 1972, the sentiment behind them is similar.

“We do not want to create little India, little Pakistan and little China in Kenya,” wrote one commentator in Business Daily, the top local business paper.

This is a step in the wrong direction. Kenya has issued about 26,000 work permits to foreigners since 2007 — hardly enough jobs to employ the millions of young Kenyans who lack work. The policy may keep out young Somalis, who are seen as undesirable in the wake of repeated bombings by the extremist Somali-based group Al Shabaab. But it will not penalize the growing body of well-heeled, older workers circling over the region’s new oil finds. And it’ll hobble many of the private-sector ventures that effectively create jobs and services for Kenyans, either directly or through secondary means.

The biggest employers of expatriates in Kenya are Nestlé, Safaricom, East African Breweries and Bharti Airtel — companies with a mix of foreign and homegrown corporate components that supplement local labor with specialized foreign talent. Add to the pile regional players like Unilever, PZ Cussons and Bidco, and smaller, development-focused firms like Juhudi Kilimo, the microfinance arm of the K-Rep Bank. Each offers value-added services essential to replacing imports, developing a service and manufacturing base, improving agricultural output and weaning Kenya off the tourism teat.

What’s more, I’d wager that even expatriate-heavy firms are doing more to employ Kenyans than the members of Kenya’s Parliament: Legislators may have helped improve education here, but they have spent more creative energy trying to avoid national taxes.

So why the blanket persecution? The cynic in me sees this as a ploy from Nyayo House, Kenya’s infamous immigration agency. It is widely known as a cartel that routinely extorts foreign firms in exchange for granting them access to Kenya’s workforce. Properly enforced, the old law was sufficient to protect low-wage jobs. Imposing yet more requirements will create more avenues for rent-seeking — as well as an incentive for even more parties to go around the law.

A chief irony of this is that Kenya usually is the voice of anti-protectionism in the East African Community, a regional organization of five states that seeks to integrate its members’ currency and labor laws to promote regional growth. Kenyan negotiators have been assuring less powerful members of the organization that having no fences is what makes good neighbors.

They’re forgetting that works two ways.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s