By Peter Halima
Dar es Salaam, Tanzania/Nairobi, Kenya – Tanzania has ignited a fresh diplomatic and economic row within the East African Community (EAC) by unilaterally barring foreign nationals from owning and operating a range of small-scale businesses, a move that has drawn sharp criticism and a significant backlash from neighboring Kenya.
The new directive, announced on Monday by Trade Minister Selemani Jafo, prohibits foreigners from engaging in 15 specific sectors. These include mobile money transfers, tour guiding, small-scale mining, on-farm crop buying, beauty salons, curio shops, and establishing radio and TV operations.
Minister Jafo justified the ban by stating that foreigners had increasingly encroached upon the informal sector and areas better suited for Tanzanian citizens. He also expressed hope that the move would encourage foreign investors to focus on large-scale businesses within the country. Violators of the new policy face severe penalties, including fines, six months in jail, and the revocation of their visas and work permits.
The policy has largely been welcomed within Tanzania, particularly among local traders who have voiced concerns about growing competition from foreign nationals, including Chinese traders. Severine Mushi, head of the influential Kariakoo traders’ association in Dar es Salaam, praised the decision, telling the Citizen newspaper, “We’ve welcomed this decision because it protects the livelihoods of Tanzanian traders.” Last year, traders in the bustling Kariakoo shopping district even went on strike to protest what they called aggressive taxation and unfair competition from Chinese competitors.
However, the ban has been met with considerable anger and dismay in Kenya, with many arguing that it directly violates the spirit and letter of East African Community agreements, which champion the free movement of people and trade among its eight member states.
Kenyan Trade Minister Lee Kinyanjui promptly called for the ban’s removal, asserting in a statement on Wednesday that it would “hurt” the economies of both Kenya and Tanzania. “It is therefore critical, in the spirit of EAC, that bilateral engagements be held to resolve these issues,” Kinyanjui urged.
Bernard Shinali, chairman of Kenya’s National Assembly Trade Committee, warned that Tanzania’s move could trigger reciprocal restrictions from Nairobi. “There are many Tanzanians working in our mining sites too,” Shinali was quoted by Kenya’s Daily Nation newspaper. “It is clear that Tanzanians have gone too far and we should cut links with them.”
Veteran Kenyan hotelier Mohammed Hersi also weighed in, questioning Tanzania’s protectionist stance. “Sometimes, it is important to focus on the bigger picture… Protectionism will never help a country to thrive,” he posted on X (formerly Twitter). Numerous other Kenyans have echoed these sentiments on social media, describing the policy as a significant impediment to regional integration. “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.
This latest trade dispute adds to a history of periodic political and economic tensions between Tanzania and Kenya, the two largest economies in the EAC. Tanzania has previously drawn criticism from its regional partners for implementing protective tariffs and import bans.
In May, Kenya’s Foreign Affairs Minister Musalia Mudavadi highlighted that approximately 250,000 Kenyans live, work, or conduct business in Tanzania, emphasizing the critical need to preserve cordial relations. His remarks came amidst diplomatic friction surrounding Tanzania’s treatment of Kenyans who had travelled to Dar es Salaam to observe the treason trial of opposition leader Tundu Lissu, with some reportedly deported and others, including prominent Kenyan activist Boniface Mwangi, allegedly tortured.
The protectionist move by Tanzania also comes merely months before the country is set to hold general elections in October, where the ruling CCM party is anticipated to retain power. Similar protectionist measures aimed at safeguarding local industries have been observed elsewhere in the continent, such as Ghana’s ban on foreigners from local gold mining, while many Ghanaians themselves operate businesses, including mining and fishing, across West Africa.
