In the 1960s and 1970s, the Kenyan government under Jomo Kenyatta pursued Africanisation policies aimed at transferring economic ownership and management to African (primarily Kikuyu) businesspeople. These policies directly threatened Asian economic dominance and triggered massive emigration.
The Concept of Africanisation
Africanisation referred to the goal of making Kenya's economy serve Africans rather than foreigners or minorities. The logic was that independence should mean African political and economic self-determination. Asians, though many were Kenyan citizens, were seen as foreign economic actors who should cede control to Africans. This was not unique to Kenya; similar policies emerged across post-colonial Africa.
Key Policies
The government required that (1) businesses employ Africans in senior positions, (2) trade licenses be converted to require Kenyan citizenship or African partnership, (3) land in urban areas be sold to Africans when possible, and (4) government contracts favor African-owned businesses. These policies effectively forced Asians to sell businesses, partner with African entrepreneurs, or leave Kenya.
Impact on Asian Businesses
Asian-owned shops, businesses, and enterprises faced pressure to sell to Africans or close. Many Asian families had built businesses over generations. Being forced to sell at government-dictated prices or lose licenses was devastating. Some Asians negotiated partnerships with African businesspeople (often creating facades where the African was nominally in charge while the Asian managed operations). Others sold businesses and emigrated.
The "Thirty Percent Rule" and Similar Measures
At various points, the government attempted to ensure that African businesspeople owned specific percentages of businesses in certain sectors. This "thirty percent rule" (and variations) meant that Asian business ownership had to decrease or at least not expand without African partnership. The rules were sometimes enforced inconsistently, creating uncertainty and encouraging emigration.
Winners and Losers
Some Asians adapted and survived Africanisation. Those with strong government connections, those in sectors less targeted by Africanisation (insurance, some professional services), and those with resources to invest in new ventures prospered. Others lost everything and emigrated. Asian women, who had often been businesspeople themselves, sometimes saw their businesses taken or devalued.
The Emergence of Kikuyu Capitalism
Africanisation accelerated the emergence of a Kikuyu business class. Kenyatta government allies (often from his own ethnic group, the Kikuyu) were positioned to take over Asian businesses or receive preferential treatment in licensing and contracts. This created the foundation for the ethnic favoritism and corruption that would characterize much of post-colonial Kenya.
Emigration Waves
Africanisation triggered waves of Asian emigration to Britain (the major destination), Canada, the United States, and other countries. Entire families left. Schools that had served the Asian community experienced declining enrollment. Asian commercial areas (like Parklands and Eastleigh) saw Asian businesses close or change hands. The Asian population declined from approximately 176,000 at independence to perhaps 100,000-120,000 by 1980.
African-Asian Business Partnerships
In some cases, forced Africanisation created African-Asian partnerships that worked. An African entrepreneur might partner with an Asian who provided capital and expertise. These partnerships sometimes succeeded, creating thriving businesses owned nominally by the African but managed by both. In other cases, they were facades or exploitation.
Class Differentiation Within the Asian Community
Africanisation widened class differences within the Asian community. Wealthy Asians with international connections could emigrate or invest abroad. Poor Asians (laborers, small merchants) were trapped and had to adapt to new conditions. This class differentiation reshaped the community, creating a smaller, more wealthy, more professional Asian population.
Long-Term Economic Consequences
Africanisation did not eliminate Asian economic importance, but it did shift the balance. Africans (particularly Kikuyu entrepreneurs and later other ethnic groups) took over retail, manufacturing, and some financial services. Asians concentrated in sectors requiring capital (banking, insurance, manufacturing) or professional knowledge (law, medicine, accounting). The Asian economic role became more specialized and less visible.
Corruption and Parallel Structures
Africanisation also enabled corruption. Bureaucrats enforced policies selectively, extracting bribes. Asians who could pay bribes to officials could retain businesses or licenses. This created a shadow economy where formal rules were bent for those with resources. The result was that wealth, not just ethnic identity, determined who survived Africanisation.
See Also
- 1967 Trade Licensing Act
- Asian Citizenship Choices at Independence
- Asian Property Losses Kenya
- Asian Manufacturing Sector
- Asian Kenya Timeline
Sources
- Wikipedia: "Indians in Kenya" (https://en.wikipedia.org/wiki/Indians_in_Kenya)
- OpenEdition: "Kenya in Motion 2000-2020, Minorities of Indo-Pakistani Origin" (https://books.openedition.org/africae/2590?lang=en)
- CSMonitor: "Kenya's Asians: needed but not wanted" (https://www.csmonitor.com/1986/0821/oken.html)