Tanzania’s Crackdown on Foreign-Owned Small Businesses Raises Regional Trade Concerns Ahead of 2025 Elections
Tanzania has imposed sweeping new restrictions barring foreign nationals from operating in 15 small-scale business sectors—a move that has ignited concern in neighboring Kenya and raised broader questions about East African Community (EAC) trade protocols. The directive, announced in July 2025, affects industries such as mobile money services, small-scale mining, tour guiding, beauty salons, curio shops, and local media ownership.
Tanzania’s Minister for Trade and Industry, Selemani Jafo, defended the decision, citing growing encroachment by foreign nationals—particularly from China—into informal trade spaces historically preserved for Tanzanian citizens. “The aim is to protect livelihoods and preserve opportunities for local entrepreneurs,” Jafo said during a press conference, noting that foreign business activity was undermining small traders’ ability to survive in a competitive landscape.
Local Approval but Rising Diplomatic Fallout
The policy has been largely welcomed within Tanzania. Severine Mushi, president of the Kariakoo Traders Association in Dar es Salaam, told The Citizen newspaper: “This decision is a relief. Foreigners were making it impossible for locals to thrive.” The Kariakoo market, one of the busiest commercial hubs in East Africa, has been a flashpoint for tensions, particularly over complaints of unfair competition and taxation... Read complete content click link below
Continue Reading The Post
Also join our community and comment on this topic in the forum.
Go to Forum Thread
Under the new law, violators risk deportation, visa revocation, work permit cancellation, six months in prison, or heavy fines. Jafo further encouraged foreign investors to shift their focus to large-scale enterprises, which are still open to foreign participation.
Kenya Alleges EAC Agreement Violations
The ban has provoked strong backlash from Kenyan officials, who argue that Tanzania’s restrictions violate EAC trade agreements that promote free movement of labor, services, and capital across member states.
Kenyan Trade Minister Lee Kinyanjui urged Tanzania to reconsider the move, saying, “This policy threatens regional integration and will hurt both Tanzanian and Kenyan economies.” He also called for bilateral negotiations to prevent escalating tensions and potential reciprocal measures.
Bernard Shinali, chair of Kenya’s National Assembly Trade Committee, warned that Tanzania’s actions could lead to retaliatory restrictions. “We also host thousands of Tanzanians in our mining sector and across various industries. Reciprocity may be necessary,” he told Daily Nation.
Public Reactions and Social Media Outcry
Kenyan citizens have taken to social media to voice their frustration. Many noted the irony that Tanzanians freely run small businesses in Kenya without restrictions. “Tanzania has never taken EAC integration seriously,” one user tweeted. Others criticized the move as politically motivated, with general elections looming in Tanzania later this year.
Veteran Kenyan hotelier Mohammed Hersi condemned the policy on X, formerly Twitter, calling it short-sighted: “Protectionism never leads to prosperity. This hurts everyone in the long run.”
Diplomatic Strains Add Fuel to the Fire
This development adds to a series of diplomatic incidents straining Tanzania-Kenya relations. In May, Kenya’s Foreign Minister Musalia Mudavadi revealed that more than 250,000 Kenyans currently live and work in Tanzania. He emphasized the need for cordial ties and mutual respect.
Tensions had previously flared after a group of Kenyan citizens was deported from Dar es Salaam while observing the treason trial of Tanzanian opposition leader Tundu Lissu. Among those affected were high-profile activists, including Boniface Mwangi, who were later reportedly tortured—further straining diplomatic relations.
What This Means for East African Regional Integration
Tanzania’s foreign business ban underscores the challenges facing East African economic integration, especially as member states balance national interests with regional agreements. With the 2025 general elections approaching and the ruling CCM party expected to retain power, some analysts view the move as politically strategic.
Still, the implications for cross-border trade, labor mobility, and diplomatic harmony are far-reaching. If not resolved diplomatically, Kenya may adopt similar restrictions—potentially unraveling years of progress toward a borderless East African economic zone.
https://www.bbc.com/news/articles/cdxyvzjpxe2o
