Tanzania’s ban on foreign small businesses sparks EAC backlash as Kenya demands action

The East African Community (EAC) is facing mounting pressure to act swiftly and decisively in response to Tanzania’s decision to bar Kenyans and other East African nationals from engaging in small-scale businesses.

Stakeholders have warned that the move undermines regional integration and violates key provisions of EAC treaties.

Transport operators and business owners argue that the directive threatens livelihoods and sets a dangerous precedent that could derail the region’s integration efforts.

Kenyan stakeholders in the transport sector strongly criticised the Tanzanian directive, calling it a violation of the EAC Treaty and the Common Market Protocol, both of which guarantee the free movement of labour and services among member states.

“This move cripples the traditional free movement of citizens across borders to establish small enterprises like salons, mobile money services, phone repair shops, and tour guiding, provided they hold the relevant licences,” they said in a joint statement.

They warned that the prohibition risks reversing decades of progress in fostering regional unity.

“Cross-border tour services are crucial in promoting intra-African travel, and they rely on seamless cooperation between member states,” the statement added.

Volates EAC Treaty

“Banning Kenyan personnel from such roles is not only unjust but blatantly violates the EAC Treaty, the Common Market Protocol, and principles upheld by the World Trade Organisation (WTO), all of which promote the free movement of labour, goods, and services.”

The group is urging the EAC Secretariat and the East African Legislative Assembly (EALA) to intervene immediately and ensure the decision is reversed.

“If left unchallenged, it will set a precedent that could destabilise the entire region’s integration agenda,” they cautioned.

They have demanded a swift reversal of the ban and called for the reinstatement of employment rights for all EAC citizens. They also urged both the Kenyan and Tanzanian governments to engage in formal dialogue to resolve the dispute.

Cross-border labour rights

The stakeholders are also pressing the EAC to publicly reaffirm its commitment to cross-border labour rights and are seeking legal redress over what they describe as violations of regional and international trade agreements.

If the directive remains in effect, they said, peaceful protests and reciprocal economic sanctions would be considered.

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• East African Community
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• EAC Treaty
• Tanzania foreign small businesses
• Selemani Saidi Jafo
• Tanzania’s ban on foreign small businesses sparks EAC backlash as Kenya demands action
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“Integration is not a favour, it is a right enshrined in law. Political leaders must not use sovereignty as an excuse to roll back regional unity. The future of East Africa depends on open borders, mutual respect, and equal opportunity for all its citizens,” they said.

Calls for retaliatory measures

Parliament’s Trade, Industry and Cooperatives Committee Chairperson, Bernard Shinali, called for retaliatory measures.

“It is clear that Tanzanians have gone too far, and we should just cut links with them,” said Shinali.

The dispute arises from a government notice issued on July 28 by Tanzania’s Industry and Trade Minister, Selemani Saidi Jafo.

The notice, known as the Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, bars foreign nationals from engaging in 15 types of businesses, including general trade, service provision, media, tourism, and small-scale manufacturing.

Farmers are also prohibited from selling produce directly to foreigners at the farm.

According to Tanzania’s Ministry of Trade and Industry, the directive is part of a broader strategy to empower local entrepreneurs, promote citizen-led growth, and reshape business ownership in favour of Tanzanians.

It follows public complaints about foreign dominance—especially by Chinese nationals—in sectors meant for locals.

Economic protectionism

This move aligns with a growing trend of economic protectionism in Tanzania. In May 2025, the government banned the use of foreign currencies in domestic transactions and required that all contracts be rewritten in Tanzanian shillings within one year.

The Bank of Tanzania has since encouraged citizens to report violations.

Under the new order, foreigners holding valid business licences will be allowed to operate until their permits expire.

However, violations will attract stiff penalties, including fines of up to Tsh10 million (about Sh503,000) or six months’ imprisonment. Tanzanians found aiding foreigners may also face fines or jail terms.

Banned activities

The list of banned activities includes mobile money services, phone and electronics repair, salon and beauty services, small-scale mining, courier services, tour guiding, and media ownership.

Others are real estate brokering, clearing and forwarding, crop purchasing, gambling outside casinos, micro- and small-scale manufacturing, museum operations, curio shops, and business brokering.

Kenyan leaders and tourism stakeholders have joined the growing chorus of critics.

Murang’a Senator Joe Nyutu, speaking in a televised interview, accused Tanzania of singling out Kenyans.

“The hostility by Tanzania towards foreigners is directed at Kenyans, because we do not see Tanzanians treat other nationals from other countries the way they treat Kenyans. And it is not only during the reign of President Suluhu. Remember the Magufuli incident involving Kenyan cattle,” Nyutu said.

Harm bilateral relations

Victor Shitakha, the chairperson of the Kenya Coast Tourism Association, warned that the directive could harm bilateral relations.

“This kind of decision will only alienate the countries,” he said.

Online, the directive has ignited fierce debate, with many Kenyans condemning it as backwards and isolationist.

“Tanzania’s decision to block foreigners from small businesses like retail, salons, mobile money, and phone repairs is a shortsighted move dressed up as economic protectionism. It stifles regional integration, limits competition, and risks escalating tensions with neighbours like Kenya,” wrote Onyiego Andrew, a scholar and writer.

“Tanzania claims this protects local jobs, but it reeks of populist gatekeeping that could isolate its economy and discourage foreign investment.”

Others called for reciprocal action by Kenya.

“All we need is sound policy, economic patriotism, and political spine to prioritise Kenyans in retail, trade, and low-capital sectors. Create the right laws, fix the business environment, and jobs will follow,” posted X user Njeri Tirop.

“No need to oppose. Iron sharpens iron. Let Kenya do the same and see how this unfolds,” another user, Kibet, added.