• Trade integration across EAC in jeopardy after Kenya accuses Tanzania of watering down the core objective of “regional economic integration”.
  • This follows Dodoma’s move to prohibit non-Tanzanians from operating businesses across 15 segments, a directive that is poised to hit Kenyans hard.
  • Nairobi says Dodoma’s Business Licensing Order will “hurt both our economies.”

The pace of trade integration between Kenya and Tanzania is hurtling to a rough patch following the latter’s latest directive prohibiting non-citizens from running certain businesses in the country, a move that the former terms counterproductive and fashioned to undermine regional integration.

According to Kenya’s Cabinet Secretary for Trade Lee Kinyanjui, Tanzania is actively watering down the core objective of “regional economic integration” as set out under the Common Market Protocol (CMP).

This reaction from Kenya comes after authorities in Tanzania gazetted a list of investment avenues which non-Tanzanians will no longer be allowed to operate. Part of the reason why Nairobi is furious is because thousands of Kenyans have invested heavily in these business segments harnessing the trade corridors between these neighbouring nations.

Under the recently gazetted Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, non-Tanzanians have been barred from a total of 15 services, including the ownership of micro and small enterprises.

Tanzania’s order, which covers a range of services such as operating tours and travel firms, salons, mobile money transfer shops, clearing and forwarding firms, small-scale mining among others, contravenes EAC protocols on trade integration that advocates for free movement of labour, goods, services and capital within the bloc.

Trade integration: Toll order to establish and operate businesses

“All partner states made binding commitments and Article 13 of the EAC CMP specifically allows EAC nationals to establish and operate businesses, and not to treat EAC nationals less favourably than own nationals,” Cabinet Secretary Kinyanjui noted.

He added: “Kenya requests that these restrictions be removed and that Tanzania reverts to measures provided for in the EAC protocol.”

According to Kenya, Tanzania’s Business Licensing Order is poised to “hurt both our economies.” At the moment, the regional bloc remains Kenya’s biggest export destination accounting for at least 28.1 percent of Nairobi’s total exports internationally estimated at KES297 Billion ($) in 2024.

Statistics show that the United Republic of Tanzania is a key market for “made-in-Kenya” goods, coming just second to neighbouring Uganda.

Genesis of Kenya-Tanzania latest diplomatic row

In a gazette notice dated July 25, 2025, Tanzania’s Minister for Industry and Trade Selemani Saidi Jafo unveiled a directive asking non-citizens who hold a valid licence in respect of the below activities to carry out their trade upto to the expiry of their permit. Subsequently, non-Tanzanians will be barred from operating such enterprises. These are:-

  • The business of sale of goods on a wholesale and retail basis, excluding supermarkets, specialised product outlets, and wholesale centres for local producers
  • Mobile money transfers
  • Repair of mobile phones and electronic devices
  • Salon business unless the business is conducted in a hotel or for tourism purposes
  • Home, office and environmental cleanliness
  • Small-Scale mining
  • Postal activities and parcel delivery within the country
  • Tour guiding within the country
  • Establishment and operation of radio and television
  • Operation of museums and curio shops
  • Brokerage or agency in businesses and real estate
  • Clearing and forwarding services
  • On-farm crop purchasing operations
  • Ownership or operation of gambling machines or devices, except within casino premises
  • Ownership and operation of micro and small industries

“In case of a Tanzanian citizen, such a person assists or aids a non-citizen to carry out any of the business activities prohibited under this Order and upon conviction shall be liable to a fine of five million shillings or imprisonment for a term not exceeding three months,” Minister Jafo warned in the special supplement.

This is not the first time that neighbours Kenya and Tanzania are embroiled in frosty trade relations. Previosuly, the two have faced recurring tensions due to economic, logistical, and policy differences.

Here is an account of notable incidents where their trade relations soured in the past two decades alone:—

Kenya Airways Flight Ban

In January 2024, Tanzania briefly banned Kenya Airways flights, citing unresolved aviation disputes. This was seen as a reaction to Kenya’s restrictions on Tanzanian aviation operations, escalating tensions over air transport access.  The short-lived ban disrupted travel and trade, reflecting ongoing competitive rivalry and challenges in harmonizing aviation policies within the EAC

Earlier in June 2022, Tanzania doubled the cost of export permits by nearly 93 per cent, impacting Kenyan trucks transiting with cargo and stranding hundreds at the border. This followed Kenya’s decision to allow genetically modified organisms (GMOs) in October 2022, which Tanzania opposed, leading to new quality verification standards for Kenyan agricultural products.

Kenya argued these measures were retaliatory, linked to Tanzania’s 2005 restrictions on Kenyan tour operators accessing the Serengeti. The permit cost increase disrupted cross-border logistics, while the GMO dispute risked further trade conflicts, threatening agricultural trade and EAC integration.

Read also: Kenya-Tanzania trade relations: What next under new leadership 

Maize Import Ban and Trade Barriers

In March 2021, Kenya banned maize imports from Tanzania and Uganda, citing high levels of mycotoxins exceeding safety limits. Tanzania’s Agriculture Minister argued the move did not affect them, but it strained trade relations. Additionally, Kenyan traders faced requirements to register firms in Dar es Salaam to import maize, seen as a protective measure by Tanzania to safeguard local jobs and commodities.

The ban disrupted maize trade, a staple food, and led to higher retail prices in Kenya, exacerbating food insecurity amid a drought. It added to the list of NTBs hindering bilateral trade.

COVID-19 Border Restrictions

As Covid-19 pandemic ravaged the two East African neighbours, Kenya restricted cross-border movement of Tanzanians, citing COVID-19 concerns, requiring truck drivers to be tested before entry, identifying the Kenya-Tanzania border as a virus hotspot.

In this May 2020 incidence, Tanzania retaliated by banning all Kenyan cargo trucks, causing a spike in prices, for instance, onions rose from KES108 to KES150 per kilo. The disagreement stemmed from differing COVID-19 strategies, with Tanzania’s then President John Pombe Magufuli downplaying the virus, while Kenya enforced stricter protocols.

The border closures disrupted trade flows, particularly for agricultural goods, and highlighted a lack of harmonized regional health protocols, threatening EAC integration and the African Continental Free Trade Area (AfCFTA) goals.

2017–2018: Milk and Dairy Products Trade Dispute

Between 2014 and 2016, Kenyan milk exports to Tanzania dropped by 79 per cent due to restrictive trade measures. In 2017, Tanzania blocked duty-free entry of Kenyan milk products, citing quality concerns, while Kenya banned Tanzanian tour vans from accessing the Maasai Mara National Reserve in retaliation for Tanzania’s restrictions on Kenyan operators in the Serengeti.

To counter the sting, Tanzania imposed stringent quality verification standards on Kenyan products in 2018, further limiting market access. The dispute significantly reduced bilateral trade in dairy products and tourism services, straining relations and highlighting competitive rivalry within the EAC members.

Burning of Kenyan Chicks and Cattle Seizures

On or around November 2017, Tanzania burned 6,400 live day-old chicks from Kenya, claiming they were smuggled, and seized and auctioned approximately 1,300 heads of cattle that had crossed the border in October 2017.

Kenya protested, arguing that these actions were retaliatory, following its ban on Tanzanian liquefied petroleum gas (LPG) exports in April 2017, citing consumer safety concerns. Tanzania also imposed a 25 per cent import duty on Kenyan confectionery such as juice, ice cream, sweets, and chewing gum, alleging Kenya used zero-rated industrial sugar to gain a competitive edge.

These tit-for-tat measures escalated trade tensions, disrupted agricultural and livestock trade, and sparked protests at the Namanga border, paralyzing transport and business. The incidents underscored persistent non-tariff barriers (NTBs) and mistrust.

Restrictions on Kenyan Tour Operators

Tanzania imposed restrictions on Kenyan tour operators in 2005, limiting their access to key tourist destinations such as the iconic Serengeti National Park. This led to retaliatory measures by Kenya, such as blocking Tanzanian-registered commercial vehicles, including safari cars and transit buses, from entering Jomo Kenyatta International Airport (JKIA) to drop off or pick up clients.

The restrictions caused inconvenience for tourists and strained cross-border tourism, a vital economic sector for both nations. The dispute highlighted logistical barriers and lack of adherence to EAC protocols for free movement, affecting tourism and regional cooperation.

Read also: Tanzania’s Precision Air loses altitude as financial turbulence hits hard