For years, Nairobi’s downtown Nyamakima trading hub has been the hallmark of entrepreneurship for traders from Central Kenya.
But amidst the hustle and bustle was a grey economy. So when the government initiated a crackdown against tax evasion and counterfeits in 2017, traders in Nyamakima were badly hit.
Coming in the middle of a presidential succession, the anti-smuggling campaign inadvertently played into the hands of the opportunistic ‘Hustler vs Dynasty’ propaganda machinery of then-Deputy President William Ruto.
The anti-smuggling campaign was turned against retired President Uhuru Kenyatta and his preferred successor, Mr Raila Odinga — dealing them a devastating blow in the race for Mount Kenya votes in the 2022 General Election.
Although the Nyamakima group helped propel Dr Ruto to the presidency, the Kenya Kwanza administration is now beginning to feel the heat of the monster it set up against Mr Kenyatta.
Deputy President Rigathi Gachagua and Trade Cabinet Secretary Moses Kuria find themselves trapped by the demands of the Nyamakima ‘kingmakers’ who are now threatening the country’s international trade policies and endangering diplomatic ties with China, whose traders are targeted in a smear campaign for unsettling the thriving grey economy downtown.
When the Daily Nation exclusively unveiled Mr Lei Cheng alias Charlie — the Chinese businessman and director of China Square that Gikomba traders now claim is eating their lunch by slashing commodity prices by almost half and cutting them off from the market — he was a happy man.
Happy because his business was reportedly raking in Sh10 million daily, with 130 employees at the Kenyatta University-owned Unicity Mall on Thika Superhighway.
Set up in January, China Square became a hit with Nairobians for its low-priced items. This did not go down well with the Nyamakima traders, who threatened to go to the streets to protest.
Mr Kuria then asked the Kenyatta University vice-chancellor to buy out Mr Lei’s lease and hand it over to the Gikomba, Nyamakima, Muthurwa and Eastleigh traders and potentially edge out the Chinese businessman.
On Monday, Mr Lei, who temporarily closed his business on Sunday, told the Nation in an interview that he is not even sure when he will reopen China Square because the government, through the Anti-Counterfeit Agency, said it was investigating it over non-compliance after one of the suppliers complained about fakes.
“We have an active case that we are investigating against China Square after a Chinese manufacturing company called Finder claimed that their products had been counterfeited by China Square and that they have infringed on their intellectual property,” Mr Tom Muteti, the communications manager at the Anti-Counterfeit Agency said in an interview on Monday.
However, Mr Lei sees the counterfeits angle as a political witch-hunt to kick him out of business and out of Kenya, explaining that the row between China Square and Finder was a business misunderstanding that had been resolved.
“Finder issue was resolved by the Finder brand company in China. It was just some misunderstanding. The complainant also submitted a document to anti-counterfeit to withdraw the case,” Mr Lei said yesterday.
Referring to whether he has alerted the Chinese embassy in Nairobi on threats to his business, Mr Lei said: “Yes, we did. The embassy encouraged us to do business following Kenya rules and laws and that everything should be ok.”
On Saturday, Mr Lei told the Daily Nation that those fighting him feel threatened after having exploited Kenyans for many years through unfair and exploitative pricing.
“My business is legal and is centered on healthy competition. We have cooperated with all government directives of opening a business in Kenya and we are here to break the monopoly. The people who are fighting us feel threatened because Kenyans now know we exist and we are not exploiting them in pricing,” said Mr Lei, a graduate of international trade from a South African university.
Mr Lei, 37, told the Daily Nation that he came to Kenya on a business visa in September last year and fell in love with the country. But his visit to the supermarket surprised him after he found out that basic items he knew very well were imported to Kenya at a throwaway price had been priced as a premium.
He smelled a business opportunity and back in China, roped some suppliers into the idea of setting up a base in Kenya, which has now unsettled the market, especially in Nairobi.
On January 29, he opened for business and in the first two weeks, he made sales worth Sh20 million. The daily sales volumes have multiplied, thanks to sustainable market pricing, social media marketing and referral clients.
“Nowadays, per day, on a bad day, we sell goods worth Sh10 million,” said Mr Lei, while maintaining that his business model is friendly and aligns with a lot of Kenyans, whose earnings are very low, but who have been exploited by retailers, who sell to them basic items branded as premium.
He said he was very shocked to read Mr Kuria’s utterances on social media, saying when he was applying for the licences, he was not told that the Chinese are not allowed to do business in Kenya.
“Kenya is a very good country and its people are very friendly. I was very shocked by Trade Minister Moses Kuria’s utterances because this may heavily slow down foreign investments in Kenya, and I think the minister should support ethical businesses like the one we have here that creates opportunities for Kenyans and pays huge taxes to the government,” he said.
“If other foreigners can do business in Kenya, so can Chinese, because there is nothing wrong we have done. Our customers are happy because we have drastically reduced prices. Business is about serving customers and they have been our biggest referral,” Mr Lei said.
The Kenya China Chamber of Commerce (KCCC) on Sunday said the proprietor of China Square had followed all necessary legal procedures before establishing the business, and the Kenyan Government had given no indication that his business plan was unacceptable. As a result, the Chinese community believes that the Kenyan government and the National Cohesion and Integration Commission (NCIC) are discriminating against them.
“We feel discriminated and don’t sit well with the remarks of the Cabinet Secretary for Investments, Trade and Industry to Kenyatta University Vice Chancellor to buy out the lease for China Square at the Unicity Mall, which were uttered without any further consultations from all parties involved and not considering the repercussions of such statements which are contrary to Kenya’s investment promotion and protection regime that has always been equitable, non-arbitrary and non-discriminatory,” said the chamber of commerce.
The statement also condemned the vice-chairperson of the NCIC, Ms Wambui Nyutu, for making ‘derogatory remarks’ about Kenya’s Chinese community on social media. According to the KCCC, such comments were irresponsible and divisive, and could incite hatred and violence against Chinese nationals.
“The Chinese nationals are open to working and collaborating with Kenyan traders to lower the cost of living for Kenyans. Our goal is not to compete, rather, to develop our economies,” the statement read.
Mr Gachagua last week convened a meeting to avert a planned strike by Gikomba traders who complained of unfair competition from Chinese traders.
The strike was expected to take place this Wednesday, but the talks seem to have cooled temperatures.
“This evening, at Harambee House Annex, I have hosted representatives of small traders from Nyamakima, Kamukunji, Gikomba, and River Road for discussions on addressing challenges in their businesses in the capital city," Mr Gachagua said after the meeting.
“We have agreed to have further consultations with more members on Wednesday, March 1, next week, towards sustainable solutions to the issues affecting these small-scale traders, who are on the lower side of the pyramid — real hustlers,” he added
On Monday, traders who form part of Gikomba traders told Daily Nation that they were informed by their officials that the planned strike on Wednesday this week has been called off after meeting Mr Gachagua, who told them that it would be interpreted that the traders are protesting against the same government that they helped ascend to power and which was now inept.
“I don’t think there will be a strike on Wednesday as planned. After meeting the Deputy President, our officials were told to talk to its members and drop the idea of strike because it will appear as if Mount Kenya traders are protesting against the Kenya Kwanza government,” a Gikomba trader told Daily Nation in confidence.
