Kenya Protests Tanzania’s New Business Ban on Foreigners, Citing EAC Treaty Violations
The Kenyan government has formally raised concerns over a new directive issued by Tanzania that bans non-citizens from engaging in certain business activities within its borders. The directive, outlined in Tanzania’s Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, has drawn criticism for violating the spirit and letter of the East African Community (EAC) Treaty and the Common Market Protocol.
Tanzania’s Controversial Business Licensing Order
Tanzania’s Minister for Trade and Industry, Selemani Saidi Jafo, announced the enforcement of the new business licensing directive on Tuesday, July 29, 2025. Under the order, foreigners are prohibited from engaging in 15 specific categories of business activities. These include small-scale retail, hair and beauty salons, mobile money shops, boda boda operations, petty trade, and local food vending, among others.
The penalties for non-compliance are severe. Any non-citizen found violating the directive faces a fine of no less than 10 million Tanzanian shillings (approximately Ksh501,584), imprisonment for up to six months, or both. Additionally, violators could face visa cancellations and termination of residency permits.
The directive further instructs Tanzanian licensing authorities to neither issue nor renew business licenses for non-citizens in the restricted sectors. Critics argue the move creates a hostile environment for regional integration and targets citizens of other EAC partner states, especially Kenyans, who operate small businesses in Tanzania.
Kenya Responds with Official Protest to EAC Secretariat
On Thursday, July 31, Kenya’s Principal Secretary for the East African Community (EAC) Affairs, Dr. Caroline Karugu, confirmed that the government had formally written to the EAC Secretariat. The protest letter urges the Secretariat to compel Tanzania to review and rescind the order in light of its obligations under the EAC Treaty.
“This Order is in direct conflict with key provisions of the EAC Common Market Protocol,” Dr. Karugu said during a press briefing. “Articles 13(1), 13(3)a, 13(5), 13(8), and 13(9) safeguard the free movement of persons, services, labor, and the right of establishment and residence within the EAC.”
Karugu added that Kenya is committed to regional integration but warned that Tanzania’s move threatens to roll back years of progress made under the EAC framework.
Key Provisions of the EAC Common Market Protocol in Question
The EAC Common Market Protocol, ratified in 2010, outlines critical rights for citizens of member states. These include:
- Right of Establishment: Citizens of EAC member states are allowed to set up businesses and invest in any partner state without undue restrictions.
- Free Movement of Services and Labor: The protocol guarantees professionals, skilled workers, and entrepreneurs the right to offer services and work in any EAC country.
- Non-Discrimination: Member states are required to treat EAC citizens equally, regardless of their nationality.
Kenya argues that Tanzania’s new directive is discriminatory, contravenes these rights, and risks undermining investor confidence across the region.
Growing Anxiety Among Kenyan Traders in Tanzania
The directive has sparked panic among thousands of Kenyan traders who operate small and medium enterprises in Tanzania. Many now fear eviction, business closures, or deportation should the directive be enforced without exemptions or reviews.
“These new rules are not only unfair, they’re targeting ordinary Kenyans trying to earn an honest living,” said Peter Mwangi, a Kenyan barber who has lived in Arusha for over five years. “We’ve built families, hired Tanzanian staff, and pay taxes here.”
Local business groups and trade lobbies have also voiced their displeasure. The Kenya National Chamber of Commerce and Industry (KNCCI) called for urgent dialogue to resolve the escalating tensions between the two nations.
Tanzania Defends the Directive as Support for Local Entrepreneurs
In response to the criticism, Tanzanian authorities have defended the directive, arguing that it aims to protect local entrepreneurs and preserve opportunities for Tanzanian citizens in the informal sector.
“The government is simply prioritizing Tanzanians for low-capital business activities,” said a spokesperson from the Tanzanian Ministry of Trade and Industry. “Foreigners can still invest in larger sectors that add value to the economy.”
However, trade experts argue that such protectionist policies send mixed signals about Tanzania’s commitment to regional economic integration and could hurt intra-EAC trade, which is essential for the bloc’s development goals.
Kenya Hints at Possible Retaliation Measures
Speaking during a media interview on Wednesday, July 30, Kenya’s Cabinet Secretary for Trade and Industry, Lee Kinyanjui, hinted that Nairobi may consider retaliatory measures if Tanzania fails to reverse the order.
“Yes, retaliation is one of the options on the table,” Kinyanjui said. “But we want to exhaust all diplomatic and legal avenues before taking that route. Our priority is to preserve regional harmony and promote fair trade.”
Trade analysts warn that retaliatory measures could trigger a tit-for-tat cycle that harms both economies and derails regional integration efforts. Kenya and Tanzania are key players in the EAC, and their cooperation is vital for the bloc’s success.
Implications for Regional Integration and Intra-EAC Trade
The unfolding diplomatic row comes at a time when the EAC is pushing to expand its influence and streamline cross-border trade. Any move that limits free movement of labor and services risks weakening the bloc’s economic foundation.
Already, trade disputes between EAC states have become common, with non-tariff barriers, border delays, and policy inconsistencies hampering commerce. This latest standoff between Kenya and Tanzania adds to a growing list of unresolved issues.
The private sector in both countries has urged the EAC Secretariat to intervene swiftly and restore investor confidence. The Federation of East African Freight Forwarders Associations (FEAFFA) warned that such restrictive policies can derail the progress made in harmonizing regional trade systems.
Kenya’s Next Steps and Diplomatic Engagements
According to PS Dr. Caroline Karugu, Kenya is now waiting for a formal response from the EAC Secretariat. If no satisfactory resolution is reached, Kenya may escalate the matter to the EAC Council of Ministers or the East African Court of Justice.
“We are committed to dialogue and are hopeful that a diplomatic solution will prevail,” Karugu said. “However, we must protect the rights of our citizens and ensure that the EAC remains a vibrant platform for integration, opportunity, and shared growth.”
Conclusion
Tanzania’s new directive banning non-citizens from engaging in selected business sectors has sparked a major diplomatic row with Kenya, highlighting persistent challenges in implementing the East African Community’s Common Market Protocol. While Tanzania argues it is safeguarding its local economy, Kenya insists the move undermines the EAC’s vision of integration and free movement.
The coming days will be critical as diplomatic efforts unfold. What remains clear is that for the EAC to thrive, member states must align national policies with regional commitments, respect mutual obligations, and ensure that integration remains a reality rather than a promise.