Tanzania has issued a new directive barring foreign nationals from owning and operating small-scale businesses across 15 sectors, igniting controversy and triggering a strong backlash from neighbouring Kenya. The ban, announced by Trade Minister Selemani Jafo, covers activities such as mobile money transfers, tour guiding, small-scale mining, on-farm crop buying, curio shops, beauty salons, and the establishment of radio and television stations.
Jafo explained that the move aims to protect local livelihoods, stating that foreign nationals had increasingly moved into informal sectors traditionally reserved for Tanzanians. The decision has been welcomed domestically, with local traders citing growing concerns over competition, particularly from Chinese nationals. Last year, traders at Kariakoo, Dar es Salaam’s largest commercial hub, staged a strike against aggressive taxation and alleged unfair competition from foreign businesses. Severine Mushi, head of the Kariakoo traders’ association, praised the new regulation, saying it would help safeguard Tanzanian traders’ survival.
Under the directive, violators risk fines, the loss of visas and work permits, and up to six months in jail. The Tanzanian government has also suggested that the ban could encourage foreigners to focus on large-scale investments rather than competing with locals in small businesses.
However, the decision has been met with sharp criticism in Kenya, with government officials arguing that the move violates East African Community (EAC) agreements guaranteeing free movement of people, goods, and services among member states. Kenyan Trade Minister Lee Kinyanjui called for urgent bilateral talks, warning that the ban could damage both economies. Bernard Shinali, chairman of Kenya’s National Assembly Trade Committee, cautioned that the restriction might provoke reciprocal measures, noting that many Tanzanians work in Kenya’s mining sector.
The backlash has also played out on social media, with many Kenyans accusing Tanzania of undermining regional integration. Veteran hotelier Mohammed Hersi criticised the policy as short-sighted, arguing that protectionism would hurt long-term economic growth. Some Kenyans pointed out that Tanzanians run various small businesses in Kenya without restrictions, questioning the fairness of the ban.
The move comes amid a history of political and economic tensions between the two nations. Tanzania has previously faced criticism for implementing protective tariffs and import bans affecting regional trade. In May, Kenya’s Foreign Affairs Minister Musalia Mudavadi highlighted that approximately 250,000 Kenyans live and work in Tanzania, underscoring the importance of maintaining strong bilateral relations.
As the dispute unfolds, the new policy raises broader questions about the future of economic cooperation within the EAC and the balance between protecting domestic industries and fostering regional integration. The outcome of the diplomatic discussions could shape trade relations in East Africa for years to come.
Leave a comment