Tanzania’s decision to bar foreign nationals from owning and operating a wide range of small-scale businesses is stirring diplomatic unease and threatening to trigger a trade standoff with neighbouring Kenya.
- Tanzania has imposed new regulations forbidding foreign nationals from engaging in specific small-scale businesses.
- Kenya has criticized the move, citing potential violations of East African Community protocols promoting free regional trade.
- This policy shift has raised concerns about potential trade tensions and retaliatory actions between Tanzania and Kenya.
Under new government regulations, foreigners are now prohibited from engaging in at least 15 sectors, including mobile money transfers, small-scale mining, on-farm crop buying, tour guiding, beauty salons, curio shops, and the establishment of radio and television stations.
Violators face hefty fines, up to six months in jail, and the revocation of visas and work permits.
While Tanzanian officials say the policy aims to protect local entrepreneurs and curb competition for informal jobs, Kenya has sharply criticised the move, warning that it could violate East African Community (EAC) protocols that guarantee the free movement of goods, services, and people among the bloc’s eight member states.
Tanzania, Kenya trade relations threatened
The new restrictions imposed by Tanzania could destabilize trade between the two countries by limiting the participation of Kenyan traders in Tanzanian markets and provoking retaliatory measures from Kenya.
Kenya exports a diverse mix of manufactured goods, processed foods, and machinery to Tanzania, while Tanzania supplies agricultural produce, minerals, and livestock to the Kenyan market. Border towns in both countries also support thousands of cross-border traders whose livelihoods rely on steady, unhindered trade flows.
With both nations deeply intertwined through cross-border commerce and shared regional agreements, such unilateral moves risk undermining business confidence, slowing investment, and disrupting the flow of goods and services that fuel bilateral trade.
“This could trigger retaliatory measures,” said Bernard Shinali, chairman of Kenya’s National Assembly Trade Committee, who noted that Tanzanians also operate freely in Kenya’s mining sector.
“It is clear that Tanzanians have gone too far, and we should cut links with them,” he added, signaling a potentially hardening stance from Nairobi. Shinali also disclosed that Kenya’s parliament would summon the trade minister to clarify the country’s response.
Tanzania’s policy breaches key EAC principles
The East African Community (EAC), a regional bloc comprising eight member states, of which Tanzania and Kenya are a part of, is founded on principles of economic integration and the free movement of people, goods, services, and capital.
These ideals are enshrined in the EAC Common Market Protocol, which came into effect in 2010. Under the protocol, citizens of member states are entitled to move freely, establish businesses, and provide services across borders without facing discrimination based on nationality.
However, Tanzania’s recent decision to bar foreign nationals from operating some businesses in the country has raised concerns about its compliance with EAC obligations.
The backlash in Kenya is being echoed by a wave of criticism online, where citizens have questioned how the new Tanzanian rules can coexist with EAC’s founding vision of a borderless regional market.
As tensions rise, the directive is fast becoming a litmus test for the strength and fragility of East Africa’s long-promised economic integration.
