The East African Community (EAC) is facing renewed internal tensions following Tanzania’s decision to bar foreign nationals from participating in several business sectors, a move regional leaders warn could undermine economic integration efforts.
- •On Monday, the government of Tanzania gazetted the Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, banning non-Tanzanian citizens from operating in 15 low-capital business areas.
- •These include retail trade (excluding supermarkets), mobile money services, tour guiding, parcel delivery, salons, electronic repairs, and small-scale mining.
- •Other affected sectors include real estate agency, clearing and forwarding, local brokerage, micro and small industries, and curio shop operations.
Existing foreign license holders will be allowed to continue operations until the expiration of their permits, after which they will be required to cease business. Violators face steep penalties—up to TSh 10 million (approx. KSh 495,000), imprisonment of up to six months, and revocation of visas and residence permits. Tanzanians who facilitate any violations may also be prosecuted.
In response, the EAC Secretariat issued a strongly worded statement criticizing the move as potentially contravening the Common Market Protocol (CMP). The protocol, particularly Article 13 and Annex V, prohibits member states from enacting unilateral policies that restrict previously liberalized sectors and guarantees EAC nationals the right to establish and operate businesses across partner states without discrimination.
“Partner States are obligated to refrain from introducing unilateral measures that hinder the free movement and establishment rights of citizens and businesses across the region,” said Veronica Nduva, Secretary General of the EAC. She added that the Secretariat is currently assessing compliance across all EAC countries and intends to raise the issue at the upcoming Sectoral Council on Trade, Industry, Finance, and Investment.
The order, according to Nduva, contradicts the regional bloc’s founding ideals of shared growth and integration. It also reverses prior liberalization commitments, a matter already addressed by the EAC’s legal and judicial councils in past consultations.
Kenya has reacted with concern, noting that Tanzania’s decision could jeopardize trade and economic ties between the two nations. Tanzania is Kenya’s second-largest EAC trading partner after Uganda, accounting for KSh 63 billion in trade in 2024. The broader EAC market represents 28.1% of Kenya’s total exports—valued at KSh 297 billion last year.
In addition to the licensing order, Kenya has taken issue with Tanzania’s Finance Act 2025 and changes to the Excise (Management and Tariff) Act, which introduce new excise duties and an Industrial Development Levy of 10–15%. Kenya contends that these fiscal policies are discriminatory and contradict the EAC Customs Union Protocol.
“While we respect the sovereign rights of Partner States to regulate their economies, such measures must be taken in consultation and with respect to regional agreements,” Lee Kinyanjui Cabinet Secretary, Ministry of Investments, Trade and Industry noted. Lee Kinyanjui added that the licensing ban appears to criminalize previously lawful investments by EAC citizens.
On his part, President Yoweri Museveni of Uganda called on the East African region—and the wider African continent—to consolidate markets and enhance local production capacity as the key to achieving long-term prosperity.
Drawing on international examples, President Museveni emphasized that the United States became prosperous by creating a large domestic market, which facilitated more efficient trade and industrialization. He urged African leaders to follow a similar path by reducing internal trade barriers and expanding regional value chains.
President Museveni also took the opportunity to reaffirm Uganda’s commitment to resolving the Migingo Island fishing issue, calling for peaceful and cooperative solutions in line with the region’s integration spirit.
Despite the escalating tension, Kenya has opted for dialogue over confrontation. It is actively participating in several consultative forums under the EAC framework. In July, the 1st Extra-ordinary Sectoral Council on Finance and Economic Affairs (SCFEA) tasked the Secretariat with compiling a list of taxes, levies, and charges that violate regional trade protocols by August 30, 2025.
The Secretariat has also been directed to standardize the definitions of “imports” and “exports” across member states and to convene a compliance-focused session by September 30, 2025.
Further bilateral engagements between Kenya and Tanzania are scheduled, including a technical meeting on tobacco trade, August 4–5, 2025, in Arusha, a joint Trade Committee review on levies, fees, and charges, August 11–12, 2025.
