Small vendors in Kenya, who have long been the backbone of the affordable tech market, are facing a new challenge that could threaten their survival. Kenya’s Communications Authority (CA) has proposed stringent licensing requirements for phone and car tracker vendors, which could affect small businesses already grappling with high taxes and low consumer purchasing power.
Under the proposed regulations, only licensed manufacturers and distributors will be allowed to import and sell mobile phones, car trackers, and other low-power communication devices. To obtain a license, distributors must pay a one-time fee of $1,937 (KES 250,000), valid for 15 years, along with an annual charge of 0.4% of their gross turnover. The CA claims these measures are necessary to curb the influx of substandard devices, improve consumer safety, and address issues like e-waste and network security.
While the rules aim to standardize the market, they have raised concerns among small vendors who rely on informal trading to keep costs low. Many of these vendors source their products from unregulated suppliers, allowing them to offer affordable devices to Kenya’s price-sensitive consumers. If the regulations are enforced, these vendors may struggle to afford the licensing fees and could be forced out of the market.
Monica Macharia, a Nairobi-based retailer, expressed skepticism about the effectiveness of the new rules. “People who bring in fake phones will still find a way. That’s the challenge I’m foreseeing,” she said. “Already, the cost of doing business is high. If enforcement is weak, the black market will thrive at the expense of licensed shops.”
The CA argues that the regulations will protect consumers by ensuring that only quality devices enter the market. Currently, counterfeit phones without unique International Mobile Equipment Identity (IMEI) numbers pose security risks and contribute to e-waste. However, small business owners like Godwin Okoyo, an electronics retailer, believe the rules are unnecessary. “We are solving a problem that I don’t think exists,” he said. “Most of our shops have genuine phones that meet the needs of different categories of customers.”
For small vendors, the cost of compliance could be devastating. Beyond the hefty one-time fee, the requirement to purchase devices exclusively from licensed distributors is expected to drive up prices. This could reduce competition and make it harder for low-income consumers to access affordable tech. Additionally, Kenya’s history of weak enforcement raises concerns that substandard devices will continue to flood the informal market, undermining the intended benefits of the regulations.
As the debate continues, the proposed rules highlight the delicate balance between regulating the tech market and preserving the affordability that has made devices accessible to millions of Kenyans. For now, small vendors and consumers alike are left wondering whether these changes will bring order to the market or simply push it further out of reach.
