Kenya Protests Tanzania’s Ban on Non-Citizens Running Small Businesses, Warns of Risk to EAC Integration
Kenya has protested Tanzania’s ban on non-citizens running small businesses, warning of risk to EAC integration as the move bars foreigners from 15 sectors including mobile money transfers and beauty salons, potentially violating the bloc’s common market protocol.
In a development that has raised alarms about regional harmony, Kenya on Thursday formally protested Tanzania’s recent decision to prohibit non-citizens from operating in several small business sectors. The Kenyan government warned that this policy could harm the East African Community’s efforts to build a unified economy. Both countries belong to the EAC, a group of eight nations that promises free movement of goods, workers and services under a common market deal. Tanzania’s new rule, which took effect this week, targets 15 types of small businesses, with harsh penalties for those who break it, including big fines and jail time.
Details of Tanzania’s New Business Ban
Tanzania rolled out the Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, on Monday, 28 July 2025. This policy aims to give local people a better chance in the economy by keeping foreigners out of certain small-scale activities. The government says it wants to empower grassroots entrepreneurs and protect jobs for Tanzanians. Under the order, non-citizens cannot get involved in these 15 areas:
- Mobile money transfers and agent services
- Small-scale mining operations
- Beauty salons and barber shops
- Establishing radio and television stations
- Tour guiding and related tourism activities
- On-farm crop buying and trading
- Repair of electronic devices like phones and TVs
- Wholesale and retail trade, except for supermarkets and shops selling local products
- Hairdressing and cosmetic services
- Small-scale fishing and fish trading
- Street vending and hawking
- Tailoring and garment making
- Butcheries and meat processing
- Poultry farming and selling
- Charcoal production and trading
Anyone caught breaking the rule faces a fine of up to 10 million Tanzanian shillings, which is about $3,900 or R70,000 in South African rand. They could also go to prison for six months, and have their visas or residency permits taken away. The government believes this will help locals take control of these everyday businesses and boost the country’s economy from the bottom up.
This is not the first time Tanzania has tried to limit foreign involvement in small trades. In the past, similar steps have been taken to support home-grown businesses, but this latest order is stricter and covers more areas. Officials in Dar es Salaam say it is part of a bigger plan to make sure Tanzanians benefit first from their own resources and markets.
Kenya’s Strong Response and Concerns
Kenya’s Principal Secretary for East African Community Affairs, Caroline Karugu, led the charge against the ban. In a statement posted on X (formerly Twitter) on Thursday, she said Kenya has spotted that the order goes against key parts of the EAC Common Market Protocol. This agreement, signed in 2010, lets people, goods and services move freely across borders in the EAC, which includes Burundi, Democratic Republic of Congo, Kenya, Rwanda, Somalia, South Sudan, Tanzania and Uganda.
“The order undermines the core objective of regional economic integration and poses a significant setback to the gains made under the East African Community Common Market Protocol,” Karugu wrote. She added that Kenya has officially written to the EAC Secretariat, asking them to tell Tanzania to look again at the order and make changes.
Karugu’s words show Kenya’s worry that the ban could hurt businesses and people who cross borders for work. Many Kenyans run small shops or services in Tanzania, and vice versa. If the rule stays, it might lead to job losses, less trade and even bad feelings between the two neighbours. Kenya sees this as a step back from the EAC’s goal of one big market where everyone can compete fairly.
EAC’s Reaction and Calls for Talks
The East African Community Secretariat quickly jumped in after Kenya’s complaint. On Thursday, they put out a statement saying they stand by the common market rules and will work with Tanzania to sort things out. The EAC reminded everyone that the protocol guarantees equal treatment for citizens of member states in business and work opportunities. They plan to hold talks soon to avoid any fallout that could slow down the bloc’s growth.
This is not the first spat between Kenya and Tanzania over trade. In recent years, there have been issues like bans on Kenyan poultry exports or disputes over fishing rights in shared lakes. But the EAC has usually stepped in to calm things down through talks or rulings. Experts say this latest row could test how strong the common market really is, especially with new members like Somalia joining in 2024.
Why Tanzania Made This Move
Tanzania’s government, under President Samia Suluhu Hassan, has been pushing hard to build a stronger local economy. They say too many small businesses are run by foreigners, leaving Tanzanians out in the cold. This includes people from nearby countries like Kenya, Uganda and even farther places like India or China. By banning non-citizens from these sectors, Tanzania hopes to create more jobs for its own people and keep money circulating inside the country.
But critics inside Tanzania and abroad say the ban could scare away investors and hurt tourism, which is a big money-maker. Small businesses like salons or mobile money agents often rely on cross-border skills and ideas. Plus, with high youth unemployment in East Africa, shutting doors might push more people into informal work or migration.
Impact on Regional Integration and Businesses
The EAC’s common market is meant to make life easier for businesses by cutting barriers. It has helped trade grow to over $10 billion a year among members. But moves like Tanzania’s ban could undo some of that progress. Kenyan traders fear they might lose out on markets in Tanzania, while Tanzanian firms could face payback restrictions in Kenya.
Business groups in the region have voiced their worries. The East African Business Council, which speaks for companies across the bloc, called for quick talks to fix the issue. They say the ban goes against the spirit of unity and could lead to less investment overall. Small business owners, especially women who run salons or shops, might be hit hardest if they have to shut down or face fines.
South Africa, watching from afar, has ties to the EAC through trade deals. Many South African companies operate in East Africa, and rules like this could affect how they do business there. It also highlights bigger talks in Africa about protecting local jobs while keeping markets open under the African Continental Free Trade Area.
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