Tanzania’s Bans Kenyans From Operating Small Businesses

Tanzania’s Ministry of Industry and Trade July 28, 2025, banned foreign nationals from operating in 15 types of small-scale businesses and triggered a diplomatic storm across East Africa, with Kenya at the forefront of opposition.

The directive was announced by Trade Minister Selemani Saidi Jafo, prohibits non-citizens from engaging in a range of informal sector activities including mobile money services, beauty salons, tour guiding, curio shops, crop buying at the farm level, small-scale mining, and the establishment of media outlets.

Jafo defended the decision, saying the informal economy had been increasingly dominated by foreign players in areas “better filled by Tanzanians.” He added that the move aimed to protect livelihoods, promote citizen-led economic growth, and encourage foreigners to channel their investments into large-scale enterprises.

Locally, the ban has been broadly welcomed, especially by traders who have long decried foreign, particularly Chinese, encroachment on their businesses. “We’ve welcomed this decision because it protects the livelihoods of Tanzanian traders,” said Severine Mushi, the head of the Kariakoo Traders’ Association.

Last year, traders at Dar es Salaam’s Kariakoo market held protests against what they called aggressive taxation and unfair competition from foreign traders.

Under the new law, officially gazetted as The Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, violators risk fines of up to Tsh10 million (approximately KSh503,000), six months’ imprisonment, and revocation of work permits and visas. Tanzanians aiding foreigners may also be penalised.

The list of prohibited business activities includes phone and electronics repair, courier services, media ownership, clearing and forwarding, real estate brokering, gambling (outside casinos), micro and small-scale manufacturing, museum and curio shop operations, and business brokering.

Despite Tanzania’s assurances that the move is aimed at empowering locals, the directive has ignited sharp criticism in Kenya and beyond.

Kenyan Trade Minister Lee Kinyanjui called for the immediate removal of the restrictions, warning that the policy could harm bilateral ties and violate East African Community (EAC) protocols. “It is therefore critical, in the spirit of EAC, that bilateral engagements be held to resolve these issues,” Kinyanjui said in a statement on Wednesday.

Chairperson of Kenya’s National Assembly Trade Committee, Bernard Shinali, warned of reciprocal measures. “There are many Tanzanians working in our mining sites too… It is clear that Tanzanians have gone too far and we should cut links with them.”

Kenyan hotelier and regional business leader Mohammed Hersi echoed concerns about protectionism, writing on X, “Sometimes, it is important to focus on the bigger picture… Protectionism will never help a country to thrive.”

Stakeholders in Kenya’s transport and tourism sectors described the ban as a breach of the EAC Treaty and the Common Market Protocol, which guarantee the free movement of labour and services across 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,” they said in a joint statement.

They urged the EAC Secretariat and the East African Legislative Assembly (EALA) to intervene. “If left unchallenged, it will set a precedent that could destabilise the entire region’s integration agenda,” they warned, also threatening peaceful protests and reciprocal sanctions if the policy is not reversed.

Online, Kenyans voiced frustration over what many described as a targeted move against them. “Tanzanians are doing all manner of small businesses in Kenya without any hindrance. It’s clear Tanzania has never been serious in making the EAC work,” one user posted.

Murang’a Senator Joe Nyutu also accused Tanzania of singling out Kenyans. “The hostility by Tanzania towards foreigners is directed at Kenyans… Remember the Magufuli incident involving Kenyan cattle,” he said during a televised interview.

Victor Shitakha, chairperson of the Kenya Coast Tourism Association, warned of the long-term damage to bilateral relations. “This kind of decision will only alienate the countries,” he said.

The tensions follow a pattern of periodic friction between the two nations, often centred around trade and immigration. In May, Kenya’s Foreign Affairs Minister Musalia Mudavadi revealed that more than 250,000 Kenyans live and work in Tanzania, underlining the stakes involved. His comments came amid fallout over the deportation of Kenyans attending the trial of Tanzanian opposition leader Tundu Lissu, including prominent activist Boniface Mwangi, who later reported abuse in custody.

Tanzania’s recent economic directives, including a May 2025 ban on the use of foreign currencies in domestic transactions, signal a broader shift toward protectionism. Citizens have been encouraged to report violations, and all contracts are now required to be denominated in Tanzanian shillings.