Tanzania’s small business ban on foreigners sparks regional tensions

Tanzania’s decision to bar foreign nationals from operating small businesses has ignited sharp backlash across East Africa,particularly from neighboring Kenya,with fears that it could fracture regional economic ties.

The new directive,announced by Trade Minister Selemani Jafo,prohibits foreigners from engaging in 15 grassroots sectors such as salons,eateries,mobile money kiosks,and small-scale mining — areas typically occupied by Tanzanian citizens. Violators face fines of up to 10 million shillings (approx. US$3,900),imprisonment,and deportation. Citizens who aid non-nationals risk penalties as well. The government argues the move is designed to protect local livelihoods and curb growing foreign dominance in the informal economy,including by Chinese traders. “We’ve welcomed this decision because it protects the livelihoods of Tanzanian traders,” said Kariakoo traders’ union leader Severine Mushi.

However,the policy has drawn sharp rebuke from Kenyan officials. Trade Minister Lee Kinyanjui warned the ban violates East African Community (EAC) agreements on free movement and could prompt retaliatory measures. Warning that the move would “hurt” both Kenya’s and Tanzania’s economies,Kinyanjui has called for bilateral talks. Kenyan activists and business leaders also criticized the policy as damaging to regional integration,stressing that “protectionism will never help a country to thrive.” Tensions are rising just months before Tanzania’s October elections. With over 250,000 Kenyans estimated to live or work in Tanzania,the fallout could be widespread — both economically and diplomatically — if a resolution is not reached soon.