Tanzania Reverses Business Prohibition for Kenyans

Tanzania has officially exempted Kenyan business owners from a July 2025 order that restricted foreign participation in 15 specific business activities. This decision, announced on Friday, October 3, 2025, follows constructive bilateral consultations between Nairobi and Dar es Salaam, aimed at resolving emerging trade disputes and strengthening economic ties within the East African Community (EAC).

The 'Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025,' had initially sparked concern among Kenyan traders operating in Tanzania. The directive had targeted sectors such as mobile money services, mobile phone and electronics repair, wholesale and retail trade (excluding supermarkets), salon services, and real estate brokerage, among others. Violators faced potential fines of up to Tsh10 million (approximately KSh 502,927) or a six-month jail term.

Context of Kenya-Tanzania Trade Relations

Kenya and Tanzania are significant trading partners within the EAC, with historical ties in trade, security, education, and agriculture. Despite their close relationship, economic and logistical disagreements have occasionally led to trade barriers and border conflicts. In October 2022, Presidents Samia Suluhu Hassan and William Ruto directed their respective investment ministers to address 14 identified trade barriers. This recent exemption for Kenyan businesses is a direct outcome of ongoing efforts to resolve such non-tariff barriers (NTBs).

Policy and Stakeholder Engagement

Principal Secretary for East African Community Affairs, Dr. Caroline Karugu, confirmed that the Tanzanian government reassured Kenya that no Kenyan business has been affected by the order and none will be in the future. She urged Kenyans in Tanzania to continue their operations without fear of interference and to seek assistance from the Kenyan High Commission if needed. The agreement was reached during the Ninth Meeting of the Joint Trade Committee (JTC) in Dar es Salaam, where officials reviewed 14 outstanding barriers and committed to resolving the remaining 10 by March 31, 2026.

The Permanent Secretary in Tanzania's Ministry of Industry and Trade, Dr. Hashil Abdallah, emphasized the goal of eliminating unnecessary obstacles for businesspeople and positioning the EAC as a reliable trade hub. This commitment reflects a strong political will from both governments to enhance regional economic integration.

Evidence and Data

• Four out of 14 outstanding non-tariff barriers between Kenya and Tanzania were resolved during the 9th Joint Trade Committee meeting.
• This brings the total number of resolved barriers to 58 out of 68 identified previously.
• The remaining 10 barriers are expected to be cleared by March 31, 2026.
• The initial Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, was introduced in July 2025.
• The order had prohibited non-citizens from engaging in 15 specific business activities.

Risks and Implications

The resolution of this business prohibition is crucial for maintaining investor confidence and fostering a predictable trade environment within the EAC. Continued dialogue and adherence to regional protocols are essential to prevent future trade disputes that could undermine economic integration efforts. The initial ban had the potential to significantly impact Kenyan traders, particularly those in small and medium enterprises along the shared border.

What to Watch

Stakeholders will be closely monitoring the progress in resolving the remaining 10 non-tariff barriers by the March 31, 2026 deadline. The effectiveness of the Joint Technical Committee, established to oversee implementation and prevent bureaucratic hurdles, will be key to ensuring sustained improvement in bilateral trade.