Kenya has raised a diplomatic red flag over Tanzania’s newly introduced policy that bans foreign nationals, including East African Community (EAC) citizens, from participating in specific local trade sectors.
The directive, gazetted under the Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, prohibits non-citizens from engaging in fifteen categories of business such as retail trade (excluding supermarkets),
Futhermore other business include M-Pesa services, hair salons, electronics repair, tour guiding, and small-scale mining.
Tanzanian Government says the Violators will face fines of up to TSh10 million (approximately KSh500,000), six months in jail, and deportation, while Tanzanians who facilitate such activities risk a fine of TSh5 million.
Reacting to the move, Kenya’s Principal Secretary for East African Community Affairs, Caroline Karugu, submitted a formal protest to the EAC Secretariat, urging the regional body to intervene.
“This directive goes against the very spirit and letter of the EAC Common Market Protocol, particularly Articles 13 and 24, which guarantee the right of establishment and movement across member states,” she stated.
She further called on Tanzania to review and withdraw the order, citing its potential to disrupt regional integration and violate fundamental treaty rights.
Kenya also proposed bilateral talks in Arusha on August 4–5 and a Joint Trade Committee session on August 11–12 to resolve the standoff amicably.
Kenya’s Cabinet Secretary for Investments, Trade and Industry, Lee Kinyanjui, was equally vocal in denouncing the directive.
“The ban criminalizes the lawful operations of EAC citizens, including Kenyan investors who have complied with local laws and established businesses in Tanzania. It is not only discriminatory but undermines the integration agenda that we have worked tirelessly to build,” said Kinyanjui.
He reiterated Kenya’s preference for diplomatic engagement but warned that retaliatory measures would be considered if Tanzania failed to reverse the policy.
The backlash was echoed across Kenya’s political circles, with lawmakers condemning the directive as hostile and economically regressive. Nandi Senator Samson Cherargei urged the Kenyan government to retaliate with similar trade restrictions.
“We cannot watch as our people are chased out of Tanzania while we continue to accommodate their traders here in Nairobi and across the country. Let us respond with equal force,” said Cherargei during a Senate session.
He proposed a temporary suspension of Tanzanian business permits in Kenya if the matter remains unresolved. Murang’a Senator Joe Nyutu accused Tanzania of harboring a pattern of economic aggression toward Kenyans.
“This is not the first time. We’ve seen arbitrary confiscation of livestock and destruction of property in past years. It’s clear there is an anti-Kenyan sentiment that needs to be addressed,” he remarked.
Business stakeholders also voiced concern over the wider economic implications. Victor Shitakha, Chair of the Kenya Coast Tourism Association, said the directive could severely hamper cross-border tourism and SME operations, particularly in areas like Arusha, Mwanza, and Moshi, where Kenyan-owned tour companies and hospitality investors have deep ties.
“The EAC is meant to promote unity and growth. This ban is the opposite,” he said.
Similarly, Dr. Sam Ikwaye, CEO of the Kenya Hotelkeepers and Caterers Association, warned that the directive could deter future investment and disrupt long-standing business relationships. “Investors need certainty, not sudden exclusion from markets they helped build,” he added.
The dispute strikes at the heart of East African regional cooperation, raising questions about the future of the EAC’s common market.
While Kenya maintains its commitment to diplomatic resolution, the tone from both political and business leaders suggests a growing impatience. As Lee Kinyanjui concluded,
“If Tanzania persists in isolating its economy under the guise of protecting locals, then the EAC is at risk of becoming an empty shell. We must act together or in kind.”
