Tanzania’s recent decision to ban foreigners from operating in 15 key business sectors has sparked concern among Kenyan traders and small business owners, many of whom have built livelihoods across the border.
The ban, signed into law in July 2023, is part of Tanzania’s move to protect its citizens and promote local economic empowerment.
However, this has placed thousands of Kenyan cross-border traders at risk of losing their businesses, despite years of contribution to Tanzania’s informal and small business economy.
Foreigners including Kenyans are now restricted from operating in sectors such as, Retail shops and kiosks, Mobile money transfer businesses, Direct purchase of crops from farms, Local tour guiding and informal and micro-enterprises (like salons, repair shops, cleaning services).
These sectors have long been entry points for low- to middle-income Kenyans trying to make a living in Tanzania, especially in towns like Arusha, Mwanza, Tanga, and border posts like Isebania.
According to the source these are the four Areas Where Kenyans Will Feel the Pinch, including Retail Trade & Mobile Money Services.
Many Kenyans run small shops, kiosks, and digital money outlets in Tanzania, inspired by Kenya’s success with M-Pesa and other fintech platforms. These businesses serve Tanzanian customers with everyday items and cash transfers.
Now, under the new rules, they must shut down, not due to wrongdoing but simply because they’re foreign-owned.
Secondly is the on-Farm Crop Buying, where Kenyan traders often cross into Tanzania to buy agricultural produce like maize, rice, onions, and bananas directly from farmers.
With the ban in place, such activities are now illegal for non-citizens, even if the trade is temporary. This may disrupt food supply chains in Kenya, especially during harvest shortages, and may increase food prices.
Another one is the Tourism & Guiding Services, Kenya and Tanzania have long collaborated in cross-border tourism, especially along wildlife migration routes in the Serengeti and Maasai Mara.
Kenyan tour guides often lead visitors from Nairobi into Tanzania.
Under the new law, only Tanzanian citizens can act as guides, threatening joint-tour packages and potentially hurting both tourism industries.
Lastly is the informal Micro-Enterprises, where some of the hardest-hit will be self-employed Kenyans running salons, food stalls, phone repair shops, car rentals, and cleaning services.
Without formal jobs, many turned to small business to survive.
But unless they serve tourists or work in hotels, they now risk fines, jail time, or deportation.
This policy could weaken trade ties between Kenya and Tanzania, two of the biggest economies in East Africa, and may strain regional cooperation under the East African Community (EAC).
While Tanzania says the move supports local citizens, critics argue it ignores the real value of cross-border entrepreneurship, especially among youth and women.
Analysts warn that Kenyan investors may start pulling out of Tanzania and instead focus on countries with more open markets like Rwanda or Uganda.
And what will come next is the result of the following, including, Diplomatic pressure may rise, with Kenya expected to seek clarification through the EAC framework.
Small businesses may face closure, leading to job losses on both sides of the border.
And citizens of both nations may face rising food costs and reduced service access, especially in rural towns.
As the situation develops, both governments will need to balance national interests with regional cooperation, and protect the livelihoods of small-scale traders who form the backbone of East Africa’s informal economy.
