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Trade War Brews as Tanzania Bars Foreigners

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Tanzania has introduced a sweeping ban that prevents foreign nationals from operating in 15 small-scale business sectors, igniting a wave of concern across East Africa, particularly in neighbouring Kenya.

The restriction, announced by Trade Minister Selemani Jafo, is aimed at curbing foreign dominance in trades traditionally reserved for local Tanzanians.

The affected sectors include mobile money operations, tour guiding and small-scale mining.

Others are local crop purchasing, beauty salons, curio shops, and setting up broadcast media outlets.

Jafo stated the move was necessary to protect Tanzanian interests, arguing that foreign nationals, among them Chinese traders, had been increasingly encroaching on the informal economy.

“We’ve noticed a significant shift where foreigners are engaging in micro-businesses meant for Tanzanians,” Jafo said.

He added that this shift was causing unease among local traders.

The directive, issued earlier this week, was generally well received within Tanzania.

Many locals see it as a long-overdue safeguard for small businesses.

Just last year, traders at Dar es Salaam’s Kariakoo market, one of the country’s busiest commercial hubs, went on strike to protest against what they called unfair competition and high taxation.

Much of their frustration was directed at Chinese-owned businesses.

Severine Mushi, chair of the Kariakoo traders’ association, praised the government’s move.

“This decision is a welcome one.

“It helps preserve our small traders’ livelihoods,” he told The Citizen, a Tanzanian daily.

Under the new rules, any foreigner found operating in the banned sectors faces hefty consequences.

These include a fine, up to six months’ imprisonment, and revocation of their visa and work permits.

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Jafo emphasized that the intention is not to discourage foreign investment altogether, but rather to steer it toward larger-scale industries where Tanzanians are less active.

However, the announcement has sparked outrage in Kenya.

Lawmakers and citizens alike argue that Tanzania’s new stance runs counter to the principles of the East African Community (EAC).

EAC is a regional bloc of eight countries that promotes the free movement of goods, services, and people.

Bernard Shinali, the chairman of Kenya’s National Assembly Trade Committee, warned that the directive could prompt a tit-for-tat response.

“We have many Tanzanians working in our mining sector.

This policy risks destabilizing the spirit of regional cooperation,” he told Kenya’s Daily Nation.

He also said that Kenya’s trade minister would be summoned to provide clarity on how the country intends to respond.

Veteran hotelier and prominent Kenyan voice Mohammed Hersi took to social media to express his disappointment.

“Protectionism is not the way forward,” he wrote on X (formerly Twitter).

“We need to think about the bigger picture, economic growth depends on openness and cooperation.”

Many Kenyans echoed his sentiment, with some accusing Tanzania of undermining the EAC’s integration goals.

One user posted, “Tanzanians operate small businesses freely in Kenya, but now they want to close their doors on us?

That’s not how a regional bloc works.”

This isn’t the first time Tanzania and Kenya have clashed economically.

Over the years, Tanzania has implemented various trade barriers, including import bans and protective tariffs, leading to friction with its neighbours.

Despite these tensions, economic interdependence between the two remains strong.

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In May, Kenyan Foreign Affairs Minister Musalia Mudavadi noted that approximately 250,000 Kenyans reside, work, or conduct business in Tanzania.

He highlighted this during a press briefing aimed at calming tensions after Kenyan citizens were reportedly mistreated.

This was while attending the high-profile treason trial of Tanzanian opposition leader Tundu Lissu in Dar es Salaam.

Some were deported, while others, including activists from Kenya and Uganda, reported abuse while in custody.

The current business restriction comes just months ahead of Tanzania’s general elections, scheduled for October.

The ruling Chama Cha Mapinduzi (CCM) party is expected to maintain its hold on power.

As the election approaches, the government appears to be consolidating nationalist policies that appeal to domestic voters, even at the risk of straining regional ties.


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