Lawmakers and business leaders in Kenya are protesting the latest roadblock erected by Tanzania barring foreigners from accessing its market in a bid to shield local businesses.
The Kenyans have criticised the move as running counter to the East African Community (EAC) Treaty. They said the new regulations are not only another unnecessary non-tariff barrier, but also fly in the face of the Common Market Protocol.
In the new policy, Tanzania has barred foreigners from engaging in retail, hairdressing, small-scale mining, tour guiding and other small-scale businesses.
Now, Kenyan lawmakers have asked President William Ruto’s government to impose retaliatory sanctions, with the action by President Samia Suluhu’s administration sparking renewed trade tensions between the two neighbouring countries.
National Assembly Trade, Industry and Cooperatives Committee Chairman Bernard Shinali said Kenya should respond in kind and impose restrictions on Tanzanian goods.
“There are many Tanzanians working in our mining sites, too,” Mr Shinali said, adding: “It is clear that Tanzanians have gone too far and we should just cut links with them.”
The Common Market Protocol, passed in 2010, guarantees freedom of movement of people, goods and services, labour and capital on the bloc. Underlining it are principles entrenching equal treatment of the nationals of partner states. In principle, citizens of EAC member states are allowed to cross borders to trade and offer professional and non-professional services.
But Dodoma, in a Special Supplement notice dated July 28, 2025, outlaws foreigners from operating small businesses like salons, mobile money transfer services, phone repairs and tour guiding.
The Suluhu administration is under pressure to provide economic opportunities to its nearly 60 million people with a General Election looming on October 28.
This policy is part of a broader government strategy to promote citizen-led growth, expand economic opportunities for Tanzanians, and reshape the structure of local business ownership, according to a dispatch from Tanzania’s Ministry of Trade and Industry.
At least 40,000 Kenyans live and work in Tanzania, but the number of those involved in informal trade is not clear. A lot of informal cross-border trade happens between border communities. The Kenyan government did not immediately respond to the new policy directive, but Kenya Coast Tourism Association Chairman Victor Shitakha said it would hurt Kenyans providing tourism-related services in Tanzania.
“Since 2020, there has been a problem in moving Kenyan tour vehicles to Tanzania and the neighbouring country even attempted to ban Kenya Airways from operating there. This weeks’ notice goes against the EAC protocol that allows free movement of people and cargo in the region,” Mr Shitakha said.
“We will invite the Cabinet secretary for Trade before our committee as soon as possible to shed more light on this and take a position as a committee. It also needs to come to the floor of the House so that Parliament takes a position,” Mr Shinali said.
Busia Senator Okiya Omtatah.
Photo credit: Dennis Onsongo | Nation Media Group
Busia Senator Okiya Omtatah, a member of the Senate Trade and Tourism Committee, termed the circular retrogressive. Urging the Tanzanian government to reverse it, Mr Omtatah noted that there are many Tanzanians running similar businesses in Kenya.
Kenya and Tanzania have had long-running trade disputes. In December 2021, they signed a Memorandum of Understanding (MoU), agreeing to remove non-tariff barriers and pledging to improve cross-border trade and allow sharing of natural resources by eliminating immigration bottlenecks.
Kenya Association of Hotel Keepers and Caterers (KAHC) Executive Officer Sam Ikwaye said both countries should nurture integration.
“We are waiting to see if Kenya might be given special treatment in this notice, considering a number of MoUs we have with Tanzania,” Dr Ikwaye said.
The government has also restricted foreigners from offering domestic, office, environmental cleaning services, or postal and local parcel delivery services.
Foreigners are prohibited from acting as brokers or agents in business and real estate transactions, and gambling operations outside licensed casino premises.
While the Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, issued by Trade Minister Selemani Saidi Jafo prohibits foreigners from participating in 15 specific types of business, those who already had valid licences will continue with business until they expire.
Tanzanians have complained that foreigners, including East African and Chinese nationals, are carrying out activities that should be reserved for locals.
Tanzania joins South Africa, Zimbabwe, Ghana, Nigeria, Swaziland, Zambia and Botswana in reserving certain business activities for their nationals.
In May, Dodoma banned the use of foreign currencies for local transactions, requiring all goods and services to be priced and paid for in Tanzanian shillings.
Foreign currency transactions
In addition to the general ban on foreign currency transactions, the regulations also place restrictions on contracts that were signed in foreign currencies.
The latest policy has some reprieves for operators of businesses related to tourism. Foreigners will run salons, for example, if they are a part of a hotel premises or a tourism site. Foreigners can also run a supermarket or a wholesale centre serving local producers.
Tanzania says it will punish violators with fines of up to Tsh10 million (Sh503,136), or imprisonment for up to six months, or both. Violators also risk losing their residence permits and visas.
Tanzanian citizens who aid foreigners in undertaking these prohibited activities also face legal penalties, including a fine of Tsh5 million (Sh251,568) or a three-month jail term.
Nelson Koech
Photo credit: File | Nation Media Group
Mr Nelson Koech, chairman of the Defence, Intelligence and Foreign Relations Committee of the National Assembly, urged patience as the Kenyan government, through the ministries of Trade and EAC Affairs, reviews and advises on the implications of the ban for official action, if necessary.
“The ban does not indicate the Tanzanian law on which it is predicated and, therefore, we must await clarification from Tanzanian authorities on the basis and justification of the ban to know whether and to what extent it affects Kenyans,” Mr Koech told Nation on Tuesday.
Mr Ken Chonga, chairman of the Labour Committee of the National Assembly, said: “I’m yet to see that communication, but if it’s the case, it is contrary to the East African Community charter that recognises free movement of goods and services within the region as well as access to employment opportunities.”
By the time of going to press, Cabinet secretaries Musalia Mudavadi (Foreign Affairs) and Beatrice Asul (East African Community) were yet to respond to Nation’s inquiries about the ban, its implication and what the Kenyan government would do.
On his part, East African Business Council chairman John Lual Akol said: “The directive does not represent the interests of the EAC. And this is not what the EAC is based on. So if Tanzania is going to impose that violation, that move is undermining the EAC Treaty and endangering SME’s in East Africa.”
“We are not sure whether the decision is a political move because Tanzania is going to elections. But it might be challenged by other partner states because it’s an open field for East Africans working in other countries. There is no freeze for example Kenyans working in Rwanda or Uganda or across the border and Tanzania’s move is a violation of the CMP,” Mr Bedi said.
