Hundreds of Kenyan traders face an uncertain future after Tanzania instituted a ban barring foreign nationals from operating small-scale businesses, in a move aimed at protecting local businesses.
The directive has sparked concern over its potential impact on regional trade and diplomatic relations.
Announced on July 28 by Tanzania’s Industry and Trade Minister, Selemani Jafo, the directive prohibits non-citizens from engaging in at least 15 business areas. These include mobile money transfer, curio shops, beauty salons, tour guiding, on-farm crop buying, parcel delivery, electronics repair and both retail and wholesale trade.
The order took immediate effect, blocking foreigners from acquiring new permits in the targeted sectors. Existing licences held by non-citizens will not be renewed.
“In enforcing this order, licensing authorities shall not issue or renew a licence for a non-citizen to carry out any of the prohibited business activities,” Jafo stated.
He defended the directive as a means of economic empowerment, arguing it would “encourage foreigners to invest in large-scale businesses” instead.
With no provision for leniency, Tanzania has rolled out strict penalties for violators. Non-compliant individuals face a minimum fine of 10 million Tanzanian shillings, up to six months in prison and immediate cancellation of visas and residence permits.
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Tanzanian citizens who assist foreign traders risk a fine of 5 million shillings or a three-month jail term.
Introduced without warning, the directive threatens to uproot long-established Kenyan ventures in Tanzania’s tourism, retail, and informal sectors. What once offered opportunity and stability has now become a legal risk.
Kenya’s Trade Cabinet Secretary, Lee Kinyanjui issued a sharp rebuke to Tanzania’s move , warning that it will hurt the economies of both nations.
“The Business Licensing Order, which seems to criminalise lawful EAC investments, will hurt both our economies. These measures are substantive and undermine the core objective of regional economic integration under the Common Market Protocol.”
He further emphasized: “All Partner States made binding commitments, and Article 13 of the EAC CMP specifically allows EAC nationals to establish and operate businesses, not to treat EAC nationals less favourably than their own citizens.”
The move has not only disrupted the operations of Kenyan traders in Tanzania but also cast a shadow over the spirit of regional economic integration.
As diplomatic channels open and pressure builds from affected stakeholders, the directive presents a critical test for the East African Community’s commitment to the Common Market Protocol.
Whether through dialogue or policy review, the coming weeks will determine if member states can strike a balance between protecting local interests and upholding the principles of free movement and fair treatment within the bloc.
