Can a foreign teacher teach native learners their own language ?

Yes of course he/she can.

Yes, as a Director of a large ESL program in the United States, I preferred having native speakers and non-native speakers on my staff.   These same teachers also prepared students for high school diplomas, GED, and military assessments.   The success of teaching depended upon the teacher, not their native country.

Of course its challenging but interesting

Definitely!! The two primary requirements are:1. To be competent in the student's language ie able to be understood and get a lesson across.2. To be competent to teach the required subject.

This is a difficult question, all the more so as I have not ever faced that situation yet.It is obvious to me that being a native speaker does not mean one systematically knows all the technicalities in his/her own language. For instance, a native speaker may need a training in special competencies such as the business, diplomatic, professional... aspects of the language.That training may be conveyed by a foreigner who has already been facing those special needs at work, with his/her parents (in case he/she comes from a multilingual and/or a multicultural family), or simply in specialized language studies.Besides, a different variant of that language may be spoken in his/her own country, which may prove useful in a language training abroad -let us imagine the case of a language-trainer coming from Québec and teaching in France. He would surely be able to teach, say, Québécois French to a group of Frenchmen wishing to relocate to Québec for work purposes, especially if the training is business-focused. The situation is a bit specific, but absolutely possible.