Kenya Pushes Back Against Tanzania’s Restrictions on Foreign Businesses
- Tanzania has instructed its licensing authorities not to grant or extend permits to non-citizens for the listed businesses
- Kenya has criticised measures taken by Tanzania as substantive and said they undermine the core objective of regional economic integration
- Samia Suluhu's administration banned non-Tanzanian citizens from trading in 15 key sectors, with stiff penalties for violators
Elijah Ntongai, an editor at TUKO.co.ke, has over four years of financial, business, and technology research and reporting experience, providing insights into Kenyan, African, and global trends.
Kenya has raised strong objections to new licensing measures imposed by Tanzania.
Source: Twitter
In a press release issued on Wednesday, Cabinet Secretary for Investments, Trade and Industry, Lee Kinyanjui, warned that the restrictions introduced by the Tanzanian government could undermine the core objectives of economic integration within the EAC bloc.
"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 own nationals. Kenya requests that these restrictions be removed and that Tanzania revert to measures provided for in the EAC protocol," Kinyanjui said.
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The CS noted that Kenya cannot rule out retaliation but emphasised that it is the last option if diplomacy fails.
Tanzania's new business licensing laws
The Kenyan government through the MITI has taken concerns with the gazettement of the Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025.
The order bans non-Tanzanian citizens from trading in 15 key sectors, including the ownership and operation of Micro and Small Enterprises (MSEs), with stiff penalties for violators.
The directive prohibits foreigners from engaging in activities such as wholesale and retail trade (excluding supermarkets), mobile money transfers, gadget repairs, salons, small-scale mining, postal services, tour guiding, real estate brokerage, farm crop purchasing, gaming machine operations, and running small enterprises.
Kenya criticises Tanzania's business prohibitions
Kenya acknowledged Tanzania’s sovereign right to legislate on domestic affairs, however, the CS insisted that such measures must be aligned with the commitments under the EAC Common Market Protocol (CMP), which guarantees non-discrimination and equal treatment for all EAC nationals.
"The measures taken by Tanzania are substantive and undermine the core objective of regional economic integration under the Common Market Protocol (CMP)," Kinyanjui said.
The Business Licensing Order, which seems to be criminalising lawful EAC investments, will hurt both our economies. It is therefore critical, in the spirit of EAC, that bilateral engagements be held to resolve these issues" he added.
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Tanzania is Kenya’s second-largest trading partner in the EAC after Uganda, with intra-community transfers valued at Ksh 63 billion in 2024.
Kinyanjui expressed optimism that these engagements would lead to positive outcomes grounded in the EAC’s founding principles.
“We are committed to transparency, equity, and non-discrimination in all our trade decisions. We urge Tanzania to lift these restrictions and revert to the measures agreed upon under the EAC protocol," he said.
What are the penalties in Tanzania?
Earlier TUKO.co.ke reported that Kenyans or other foreigners found doing business across the 15 sectors listed by the Tanzanian government will be liable to fines and penalties.
According to the gazetted order, violators will face fines of up to KSh 495,000, six months in jail, and possible visa cancellation.
The Tanzanian government said the move aims to protect Tanzanian citizens from losing business opportunities and jobs to foreigners, but economic experts warned the restrictions violate East African and AfCFTA free trade principles, potentially prompting retaliation from affected countries.
The ban has sparked mixed reactions in Kenya, with many criticising Tanzania's decision as a barrier to regional economic integration.
Licensing authorities in Tanzania have been instructed not to grant or extend permits to non-citizens for the listed businesses.
Proofreading by Asher Omondi, copy editor at TUKO.co.ke.
Source: TUKO.co.ke
