By Business Insider Reporter
The East African Community (EAC) Secretariat has raised concern over Tanzania’s recent move to restrict foreign nationals – including East Africans – from engaging in certain small-scale business activities, warning that such actions may violate the principles of the EAC Common Market Protocol.
The warning comes days after the Tanzanian government gazetted the Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, which bars non-citizens from operating in 15 micro and small-scale business sectors.
The new directive is part of the country’s revised Finance Act 2025, which also introduced new industrial levies and excise duties aimed at protecting domestic industries and encouraging local ownership.
While the government argues that the move is aimed at reserving economic space for Tanzanian citizens and youth-led businesses, the EAC Secretariat cautions that such unilateral restrictions risk undermining regional integration efforts.
“Unilateral backtracking on previously liberalised sectors is inconsistent with obligations under the Common Market Protocol,” the EAC said in a statement issued from its headquarters in Arusha on Wednesday signed by EAC SEcretary General, Ms. Veronica Nduva (pictured below).
EAC-CM under pressure
The EAC Common Market Protocol, which came into force in 2010, allows citizens of Partner States to move freely, work, invest and establish businesses across the region.
The protocol is built on the premise of non-discrimination among citizens of EAC member states – a principle now being tested by Tanzania’s latest policy shift.
Legal experts point to Annex V of the protocol – the Schedule of Commitment on the progressive liberalisation of services – which prohibits the reintroduction of restrictions in sectors previously opened under regional agreements.
The EAC Secretariat has confirmed it is analysing compliance across all Partner States and will present any inconsistencies at the next Sectoral Council on Trade, Industry, Finance and Investment.
Business and diplomatic fallout
Tanzania’s directive has drawn diplomatic attention, especially from Kenya and Uganda, whose citizens form a significant portion of cross-border traders, particularly in sectors such as retail, mobile money agency, textiles, beauty services, and food processing – many of which now fall under the restricted category.
Kenya’s Cabinet Secretary for Trade and Industry, Lee Kinyanjui, earlier warned that the move effectively “criminalises lawful East African investments” and risks retaliatory measures from affected countries.
“These measures are substantive and undermine the core objective of regional economic integration,” Kinyanjui said during a press briefing in Nairobi.
Tanzania, however, maintains that the measures are temporary and strategic – aimed at empowering local SMEs and curbing informal sector dominance by non-citizens.
“We are not targeting any country; we are protecting Tanzanian entrepreneurs from unfair competition and market distortion,” said a senior official from the Ministry of Industries and Trade.
Implications for investors
With intra-EAC trade valued at over US$10 billion annually, disruptions in the movement of goods, capital, and services could dampen regional economic growth.
For Tanzania, which is positioning itself as a manufacturing and logistics hub – with projects like the Kwala Industrial Park, Standard Gauge Railway (SGR) and port modernisation in full swing – a perception of inward-looking policies could undermine its competitiveness in attracting foreign direct investment (FDI) from within the bloc.
“Tanzania’s industrialisation push depends heavily on regional supply chains and cross-border investment,” said a trade policy analyst based in Dar es Salaam. “These restrictions, if not well-communicated and coordinated, could backfire economically and diplomatically.”
Way forward
The EAC Secretariat has urged dialogue and adherence to the spirit of regional cooperation.
It reaffirmed its commitment to “maintaining the integrity of the regional single market” and called on Partner States to avoid actions that could fragment or politicise trade.
With the Africa Continental Free Trade Area (AfCFTA) also gathering momentum, regional cohesion has never been more critical.
Analysts argue that the EAC must balance national interests with regional ambitions to remain a credible economic bloc. As East Africa’s economic integration deepens, Tanzania’s business restrictions pose a crucial test of the region’s political will to uphold shared principles – and whether economic nationalism can co-exist with cross-border opportunity.
