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After Tanzania imposed a ban on foreigners from operating in 15 specific business sectors, alarm bells have begun to ring among Kenyan entrepreneurs with roots and interests across the border.
The directive, signed into law in July 2023, shuts out non-citizens from grassroots enterprises such as retail shops, tour guiding, mobile money transfers, and crop purchasing directly from farms.
Although framed as an effort to promote local empowerment, the decision has raised questions about its implications for Kenya–Tanzania relations and the East African Community (EAC) integration agenda.
With Kenya and Tanzania being close neighbours and major trading partners, this ban could deal a blow to long-standing economic ties, especially among small-scale traders residing in different parts in Tanzania who rely on the mentioned businesses.
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How the key sectors will be affected
1. Retail trade and mobile money services
One of the biggest casualties of the new directive is the retail trade sector. Many Kenyans in Tanzania run small shops and kiosks, especially in border towns and major cities like Arusha, Tanga, and Mwanza.
Tanzania's President Samia Suluhu Hassan
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These businesses, often built from the ground up, serve local Tanzanian customers with everyday goods groceries, airtime, clothes, and household items.
With the ban now in force, these Kenyans face being pushed out of the market, not because of poor service or unfair practices, but purely on the basis of nationality.
The same applies to mobile money services an area where Kenyan entrepreneurs have introduced more efficient systems, borrowing heavily from Kenya’s success with platforms like M-Pesa.
Many set up digital transaction outlets in Tanzania, helping improve financial inclusion. They will now be forced to shut down.
2. On-farm crop purchasing
This sector presents a particularly grey area, but its impact could be huge. Kenyan traders frequently cross into Tanzania to buy maize, onions, bananas, rice and other agricultural products directly from farms.
A trader selling onions
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These items are then transported back to Kenya and sold in markets.
With 'on-farm crop purchasing operations' now restricted to Tanzanians only, these Kenyan traders could be accused of violating the law even if their business involves no permanent presence in the country.
This could trigger supply disruptions, especially during harvest gaps in Kenya, potentially leading to food price hikes and strained supply chains.
3. Tourism and local tour guiding
Tanzania is home to some of Africa’s top tourist destinations Serengeti, Ngorongoro, Mount Kilimanjaro and many Kenyan tour companies have built cross-border packages that include these highlights.
Kenyan tour guides often accompany clients from Nairobi through to Arusha and beyond.
With the new law prohibiting foreigners from serving as local guides, these businesses may lose licensing rights or partnerships.
This will not only affect revenue for Kenyan firms but also inconvenience tourists, especially those who prefer continuity in service and language when moving across countries.
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Wildebeests (connochaetes taurinus) jump to cross the Mara river during their migration to the greener pastures, between the Maasai Mara game reserve and the open plains of the Serengeti, southwest of Kenya's capital Nairobi, August 15, 2016. (reutersc...
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4. Informal and micro businesses
Some of the most vulnerable traders are those in the informal economy salons, cleaning services, car hire, small-scale advertising agencies, phone repair shops, and food carts.
Many of these are run by Kenyans in Tanzania who couldn’t find formal employment and decided to venture into self-employment.
For instance, a Kenyan woman running a thriving salon in a Tanzanian town now risks being labelled illegal unless her business operates inside a hotel or serves tourists.
A young man repairing mobile phones at a roadside stall may be fined, jailed, or deported. These businesses are low-risk and low-cost, but highly dependent on community trust and now they’re being squeezed out.
An AI-generated image of a technician working at an electronics repair shop
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This ban, while meant to prioritise local Tanzanian businesses, risks isolating Tanzanians from innovations, services, and partnerships that have grown organically across the two countries.