The decision, announced by Tanzania’s Minister for Industry
and Trade, Selemani Saidi Jafo, could significantly affect bilateral relations
and violate the spirit of the EAC Common Market Protocol of 2010, which
guarantees the free movement of goods, services, labour, and capital across
member states.
The businesses now off-limits to foreigners span multiple
sectors, including mining, tourism, agriculture, technology, and communication.
Some of the specific activities barred include mobile money
transfers, phone and electronics repair, salon services, postal and delivery
services, tour guiding, brokerage, real estate operations, and small-scale
manufacturing.
Foreigners have also been banned from farming, crop
purchasing, and operating gambling machines, unless within licensed casinos.
According to the new directive, non-citizens currently
licensed to operate these businesses may continue only until their licenses
expire.
Any foreigner caught violating the ban faces a fine of up to
Tsh10 million (Sh502,927) or a six-month prison sentence, while Tanzanian
citizens found aiding foreigners risk a three-month jail term and fines up to
Tsh5 million (Sh251,463).
Tanzania’s official justification for the ban centers on
protecting local businesses and job opportunities for its citizens.
The government argues that these sectors are critical to
grassroots economic growth and must be reserved for nationals.
However, critics, especially from Kenya, view the move as
protectionist and discriminatory, raising questions about its compatibility
with the EAC's goals of regional integration and economic cooperation.
The ban comes on the heels of another controversial
Tanzanian policy announced earlier this month, a mandatory travel insurance fee
of Sh5,700 for foreigners visiting the country, ostensibly to relieve pressure
on public health systems.
While this directive excludes citizens of the EAC and the
Southern African Development Community (SADC), it contributes to growing
concerns about barriers to cross-border movement within the region.
The announcement has sparked sharp criticism from Kenyan MPs,
who have called on the Ministry of Foreign Affairs to urgently engage Tanzanian
authorities over what they term as "economic hostility."
Several lawmakers warned that Kenya could be forced to
retaliate with similar measures unless the issue is resolved diplomatically.
“Tanzania’s actions undermine regional integration and
target Kenyan entrepreneurs unfairly,” said a senior Kenyan MP.
“We must
protect the rights of our citizens to do business freely across the region, as
guaranteed under the EAC Common Market Protocol.”
Trade, Industry and Cooperatives Committee of the National
Assembly chair Bernard Shinali wants Kenya to impose a similar ban on Tanzanian
goods and businesses.
“Many Tanzanians are working in our mining sites too,”
he stated.
Some MPs have also questioned why the Kenyan government has
remained muted in its response, urging President William Ruto’s administration
to take a firm but diplomatic stance to defend Kenya’s economic interests in
the region.
The EAC Common Market Protocol of 2010, to which both Kenya
and Tanzania are signatories, was designed to promote free movement of people,
labour, goods, and services, and to enhance economic competitiveness in the
region.
Under the protocol, member states are expected to eliminate
non-tariff barriers (NTBs) and avoid discriminatory practices against nationals
of other member countries.
Tanzania’s blanket ban on foreigners operating in certain
sectors appears to contradict both the letter and spirit of the protocol,
sparking fears of a widening rift within the EAC.
Trade experts warn that unless the issue is addressed at the
highest levels, it could erode trust and set a dangerous precedent of economic
nationalism within the bloc.
While Kenya and Tanzania share strong historical, cultural,
and economic ties, their trade relationship has often been marred by disputes
and protectionist policies.
Over the years, the two countries have clashed over
non-tariff barriers, including restrictions on goods such as milk, eggs,
sausages, and confectionery products like biscuits, many of which have been
targeted by Tanzania for higher tariffs or import bans.
Despite these hurdles, trade between the two countries has
grown steadily.
According to the Observatory of Economic Complexity, Kenya
exported goods worth US$451 million to Tanzania in 2023, including soap,
packaged medicaments, and coated flat-rolled iron.
In contrast, Tanzania exported goods worth US$334 million to
Kenya, mainly corn, sawn wood, and coal briquettes, resulting in a trade
surplus of US$117 million in Kenya’s favour.
While the growing trade volume is a positive indicator, the
imbalance and recurring disputes have continued to fuel tensions.
Analysts warn that the latest restrictions could trigger a
trade backlash if Kenya decides to reciprocate with its own set of barriers.
Experts argue that Kenya should engage Tanzania through EAC
dispute resolution mechanisms, while simultaneously working to diversify trade
partnerships and strengthen local capacity to reduce overdependence on volatile
bilateral trade.
