FAMReports News Desk | August 1, 2025 | DAR ES SALAAM
Tanzania has imposed sweeping restrictions barring foreign nationals — including citizens of East African Community (EAC) partner states — from operating in 15 specific sectors dominated by small-scale entrepreneurs, triggering a sharp backlash across the region and a legal challenge before the East African Court of Justice.
Under the Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, which came into effect on July 28, foreigners are barred from engaging in:
Mobile money transfers
Tour guiding
Small-scale mining
On-farm crop buying
Beauty salons and barber shops
Curio and craft shops
Operating radio and TV outlets, among others
Tanzanian Trade Minister Selemani Jafo defended the directive, arguing that foreign nationals — including Chinese traders — had increasingly ventured into informal sectors best reserved for Tanzanian citizens. “We are protecting the grassroots economy and local livelihoods,” Jafo said during a press briefing.
The directive has been received positively by local traders’ associations, many of whom have long decried what they consider unfair competition from foreign entrants.
“We’ve welcomed this decision because it protects Tanzanian traders from being edged out of the informal market,” said Severine Mushi, head of the Kariakoo Traders Association, speaking to The Citizen.
Violations of the new law could lead to fines, imprisonment of up to six months, and the revocation of work permits and visas.
Jafo clarified that the intent is not to discourage foreign investment but to encourage it in large-scale sectors such as manufacturing, infrastructure, and agriculture. “Let foreigners focus on industrial investment, not petty trade,” he added.
Regional Backlash: Kenya Responds Fiercely
The directive has ignited diplomatic and economic tensions, particularly with neighbouring Kenya, where government officials, business leaders, and civil society have labelled the move a breach of EAC commitments.
Kenyan Trade Minister Lee Kinyanjui expressed “deep concern,” urging Tanzania to rescind the order: “This directive undermines the spirit of regional cooperation. It will hurt both our economies.”
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National Assembly Trade Committee Chair Bernard Shinali warned of retaliatory actions. “Tanzanians work in our mining sites and other trades. This is a direct provocation, and we must reconsider our ties,” he told Daily Nation.
Veteran hotelier Mohammed Hersi posted on social media platform X, “Protectionism never grows economies. We must focus on the bigger picture — regional growth and opportunity.”
Grassroots Frustration and Growing Hostility
Across Kenyan social media, users condemned the move as a betrayal of the East African Community’s integration goals. Posts on X and Facebook questioned why Tanzanians are allowed to operate in Kenya without restrictions while Kenya’s own nationals are blocked from doing business in Tanzania.
“Tanzania has never taken EAC integration seriously. This is not just a trade issue — it’s a political signal,” one user posted.
The Kenyan Foreign Affairs Ministry reminded Tanzania of the estimated 250,000 Kenyans currently living, working, or running businesses within Tanzanian borders — a figure disclosed earlier this year by Foreign Minister Musalia Mudavadi. He emphasized the importance of avoiding actions that risk “derailing hard-earned diplomatic gains.”
Legal Challenge Filed at East African Court of Justice
Adding to the growing backlash, Ugandan lawyer Steven Kalali has sued the Government of Tanzania at the East African Court of Justice (EACJ), arguing that the law violates multiple provisions of the EAC Treaty and the Common Market Protocol.
Kalali, a Kampala-based human rights and trade advocate, filed the suit against Tanzania’s Attorney General, seeking an injunction against the enforcement of the law. He specifically contests Sections 3(1), 3(2), and 3(3)(a) of the order.
“The legislation constitutes an unlawful non-tariff barrier and undermines the rights of EAC citizens to trade freely within the region,” Kalali stated in his petition.
Remedies sought by Kalali include:
A declaration that the order violates the EAC Treaty and Common Market Protocol
An injunction barring enforcement of the order
Nullification of the law in its entirety
Compensation for legal costs
He cited Articles 5, 6, 7, and 8 of the EAC Treaty and Articles 4, 13, 16, 24, and 29 of the Common Market Protocol, all of which guarantee freedom of movement, non-discrimination, and regional cooperation.
The EACJ has not yet scheduled a hearing. Tanzania’s Attorney General is expected to file a formal response in the coming weeks.
Implications for EAC: Legal, Political, Economic
The dispute marks one of the most serious legal tests of the EAC’s integration efforts since the Common Market Protocol came into force in 2010. If successful, Kalali’s case could limit how far member states can go in enforcing protectionist policies without violating regional obligations.
Analysts note that the case raises critical questions about the tension between national sovereignty and regional economic commitments.
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“This case is a bellwether for the future of the EAC,” says Dr. Lydia Tumushabe, a legal analyst at the East Africa Trade Observatory. “If Tanzania wins, it could set a precedent for more inward-looking policies. If Kalali wins, it reasserts the primacy of regional law over domestic restrictions.”
A History of Friction
This isn’t the first trade spat between Tanzania and its neighbours. The country has previously imposed protective tariffs, import bans, and movement restrictions that have led to tense diplomatic exchanges with Kenya and Uganda.
In May 2025, tensions flared when several Kenyans attending the trial of Tanzanian opposition leader Tundu Lissu were deported or allegedly mistreated by security forces — an incident that included prominent activist Boniface Mwangi and Ugandan journalist Agather Atuhaire.
With general elections set for October, analysts believe Tanzania’s government may be using nationalist economic policies to consolidate domestic political support — a strategy not uncommon across the region.
Tanzania’s foreign business restrictions have triggered a legal, political, and economic storm that threatens to reshape the dynamics of East African cooperation. The coming months will be crucial as the EACJ considers the legality of the order, and partner states weigh their diplomatic options.
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