Tanzania bans foreigners from key businesses, risks regional fallout

Tanzania bans foreigners from small businesses to boost local jobs, sparking regional concerns.

Tanzania is intensifying its efforts to limit foreign involvement in crucial segments of its economy. A newly issued directive bars foreigners from participating in 15 specific business areas identified as vital for grassroots economic empowerment. These areas include operating salons, managing small retail shops, running eateries, and establishing mobile money kiosks — enterprises that have long been predominantly owned and managed by Tanzanians.

The penalties for violating this directive are severe. Offenders may face fines reaching up to 10 million Tanzanian shillings, approximately 3,900 US dollars, or imprisonment for up to six months. In addition, foreign nationals found in breach of the law risk having their residence permits and visas revoked. Tanzanian citizens who facilitate or collaborate with non-citizens to engage in these restricted business activities could be subjected to fines of up to 5 million shillings or face a jail term of up to three months.

According to the government, the initiative is intended to stimulate local employment and enhance income opportunities for Tanzanian nationals. However, the move has stirred apprehension across the East African Community (EAC), with critics arguing that it may act as a non-tariff barrier, hindering regional trade and integration.

The implications are especially concerning for the estimated 40,000 Kenyans currently residing and working in Tanzania, many of whom are engaged in informal economic activities. Other EAC member states — including Rwanda, Burundi, South Sudan, Somalia, and the Democratic Republic of Congo — are also expected to feel the ripple effects of the policy.

Fears are mounting that this could provoke reciprocal actions from neighboring nations and jeopardize efforts toward regional unity and cooperation.

This directive comes on the heels of another bold economic policy enacted in May, when Tanzania prohibited the use of foreign currencies for domestic transactions, mandating that all payments be conducted exclusively in Tanzanian shillings.