Tanzania’s government has formally exempted Kenyan nationals from enforcement of its controversial Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025. The decision comes after intense bilateral consultations and offers relief to thousands of Kenyan traders who feared being shut out of business in their neighbouring country.
In July 2025, Tanzania introduced Government Notice No. 487A under the revised Finance Act 2025, reserving at least 15 business activities exclusively for Tanzanian citizens. These sectors include retail and wholesale trade, mobile money operations, electronics repair, salons, parcel delivery, tour guiding, real estate brokerage, and small-scale mining.
The order, gazetted by Tanzania’s Ministry of Industry and Trade under Government Notice No. 487A, was introduced after amendments to the Finance Act, 2025.
Under the law, non-citizens are barred from obtaining new business licenses in those sectors, and existing permits would not be renewed. Many in Kenya saw this as a direct affront to regional integration and a threat to livelihoods of Kenyans operating in Tanzania.
Many feared the measures would lead to closures and job losses for cross-border traders, a significant number of whom are Kenyan nationals.
Kenya’s leadership criticized the law as “criminalizing lawful investments” by East African Community (EAC) nationals, arguing it undermined the EAC Common Market Protocol guaranteeing freedom of establishment within member states.
Following diplomatic engagement, Tanzania has now assured that no Kenyan business will be adversely affected by the order; past, present, or future.
The understanding is expected to calm heightened anxieties among cross-border traders, especially in border towns such as Namanga, where trade flows are significant.
Speaking on behalf of Kenya’s government, Principal Secretary for East African Community Affairs, Caroline Karugu, confirmed that Kenyan businesses currently operating in Tanzania will retain their rights and urged any aggrieved traders to seek assistance from the Kenyan High Commission.
“The United Republic of Tanzania reported that so far, no Kenyan business has been affected by the order and further reassured no Kenyan business will be affected even in future,” she said. “We further encourage Kenyan nationals running businesses in the United Republic of Tanzania to engage the Kenyan High Commission in the event of any distress and for information.”
From Tanzania’s side, authorities affirmed that to date, no Kenyan business has been impacted, and that the exemption ensures those already operating in the restricted sectors will not face closure.
The exemption is widely viewed as a strategic retreat by Tanzania to preserve East African integration and avoid a trade standoff with Kenya.
Observers note that Kenya’s economy is heavily tied to the EAC bloc: exports to East Africa accounted for roughly 28.1 percent of total Kenyan exports in 2024.
Trade and Industry CS Lee Kinyanjui had warned earlier that the licensing order would disrupt not only bilateral trade but also the integrity of the EAC’s free establishment rules.
The resolution via diplomatic channels underscores how vital economic diplomacy is in the East African region.
Some analysts see this as a precedent for handling intra-bloc disputes without resorting to retaliatory trade measures.
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