Tanzania’s recent move to bar foreign nationals from owning or operating a wide range of small-scale businesses is creating friction with Kenya and raising concerns over a potential trade conflict between the two East African neighbours.

Under the new rules, foreigners are prohibited from participating in at least 15 business sectors, including mobile money transfers, small-scale mining, on-farm crop buying, tour guiding, beauty salons, curio shops, and running radio and TV stations.

Anyone found violating the new regulations faces stiff penalties, including heavy fines, up to six months in jail, and cancellation of visas and work permits.

Tanzanian authorities say the decision is intended to protect local business owners and reduce competition for informal jobs.

However, Kenya has strongly criticised the policy, arguing that it could be in breach of protocols set by the East African Community (EAC), which guarantees the free movement of goods, services, and people among its eight member states.

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Kenya’s concerns centre around the potential impact on trade relations between the two countries.

The new restrictions could limit the involvement of Kenyan traders in Tanzanian markets and prompt Kenya to impose retaliatory measures.

Kenya exports manufactured goods, processed foods, and machinery to Tanzania, while Tanzania sends agricultural products, minerals, and livestock to Kenya.

Thousands of small-scale traders also depend on smooth cross-border trade between towns along the shared border.

With economic ties and regional agreements closely linking the two countries, such unilateral decisions risk weakening business confidence, deterring investment, and interrupting the flow of goods and services vital to both economies.

“This could trigger retaliatory measures,” said Bernard Shinali, chairman of Kenya’s National Assembly Trade Committee.

“It is clear that Tanzanians have gone too far, and we should cut links with them,” he added, signalling growing frustration in Nairobi.

Shinali also said that Kenya’s parliament would summon the trade minister to explain the government’s response to the issue.

Tanzania’s new directive also appears to contradict the key principles of the East African Community.

The EAC, which includes Kenya and Tanzania among its eight member countries, was formed to promote regional integration and allow the free movement of people, goods, services, and capital.

These goals are formally laid out in the EAC Common Market Protocol, which came into effect in 2010.

It grants citizens of member states the right to move across borders, start businesses, and offer services without discrimination based on nationality.

The backlash in Kenya has extended beyond officials.

Many citizens have taken to social media to question how Tanzania’s new policy fits with the EAC’s vision of a borderless regional economy.

As the situation unfolds, Tanzania’s decision is quickly becoming a major test of how committed East African countries are to the economic integration they’ve long promised.

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