Tensions Rise as Tanzania Bans Foreigners from Small Business Operations

Tanzania's recent decision to restrict foreign nationals from owning small businesses has provoked significant backlash from Kenya, which argues that the policy undermines East African community agreements. While the Tanzanian government claims it aims to protect local livelihoods, the move could lead to strained relations with its neighbor.

Tanzania's Trade Minister Selemani Jafo recently announced a ban that prohibits foreign nationals from owning and operating businesses in 15 sectors, impacting small-scale industries such as mobile money transfers, tour guiding, beauty salons, and mining. This directive aims to protect Tanzanian livelihoods amid concerns that foreign nationals, particularly from China, are increasingly dominating local markets.

The announcement has garnered support within Tanzania, with local traders expressing relief and support for the government’s protective stance. Severine Mushi, head of the Kariakoo traders' association, welcomed the decision as a means to safeguard local business interests, particularly following previous tensions over taxation and competition with foreign traders.

However, the response from Kenya has been one of frustration and concern, particularly regarding the potential breach of East African Community (EAC) agreements that ensure free movement and trade among member states. Critics in Kenya have warned that Tanzania's decision could provoke retaliatory measures, with Kenyans feeling that the ban is an infringement on their rights to engage in business across borders.

Kenyan National Assembly Trade Committee chairman Bernard Shinali expressed his dismay, suggesting that the ban could escalate into significant diplomatic tensions, especially since many Tanzanians are employed across various sectors in Kenya. Veteran hotelier Mohammed Hersi also voiced doubts about the wisdom of Tanzania's protective measures, warning that such policies often hinder long-term growth.

As social media reactions among Kenyans intensify, many are calling this ban a significant setback for regional integration efforts. Over the years, Tanzania and Kenya have navigated complex political and economic relationships, punctuated by issues like trade restrictions and treatment of citizens across borders.

Recent tensions have additionally followed instance of deportations of Kenyan nationals and worrying reports surrounding human rights abuses. As Tanzania approaches its general elections set for October, the ruling CCM party's stance on foreign investment and local protectionism will be closely scrutinized in relation to its impact on international relationships.