Kenya Voices Strong Objections to Tanzania's Trade Barriers

Kenya has formally registered its disapproval of new trade and licensing regulations enacted by Tanzania, warning that these measures jeopardise the principles of East African regional integration and threaten established trade gains. 

The Kenyan Ministry of Investments, Trade and Industry issued the objection following the implementation of Tanzania's Business Licensing (Prohibition of Business Activities for Non-Citizens) Order 2025 and recent amendments to its Finance Act. The controversial licensing order, effective since 28 July, prohibits foreign nationals from participating in 15 specific business sectors, including salon operations, mobile money services, tour guiding, and electronics repair. 

While exemptions are available for existing licence holders, the order imposes strict penalties for non-compliance. Kenyan officials argue that the directive directly contravenes the East African Community (EAC) Common Market Protocol, which guarantees equal treatment for citizens of member states in commercial activities.

Lee Kinyanjui, Cabinet Secretary for Trade and Industry, expresses serious concerns regarding the potential implications of Tanzania’s new policies, describing them as both discriminatory and economically disruptive. 

“The Government of Kenya has noted with concern the imposition of new and discriminatory tax measures by the United Republic of Tanzania, which threaten regional trade gains,” he says, highlighting the perceived imbalance created by the measures.

Kinyanjui also criticises the amendments to Tanzania’s Excise (Management and Tariff) Act 2019. These amendments introduce excise duties and an Industrial Development Levy at rates of 10 and 15 percent, respectively, which Kenya contends violate the non-discrimination principles outlined in Article 13 of the EAC Common Market Protocol. The measures also risk criminalising legitimate cross-border investments within the EAC bloc.

“The Business Licensing Order seems to criminalise lawful EAC investments and will harm both our economies,” Kinyanjui warned, as he advocated for urgent bilateral discussions to resolve the escalating trade tensions between the two countries.

This dispute emerges at a critical juncture, with intra-EAC trade constituting a vital component of Kenya's export strategy. In 2024, the EAC accounted for 28.1 per cent of Kenya’s total exports, amounting to approximately Sh297 billion. Tanzania ranks as Kenya’s second-largest trading partner within the EAC, with trade volumes estimated at Sh63 billion. The newly imposed restrictions, therefore, represent a significant threat to Kenya’s regional economic interests and the broader goal of harmonised trade across East Africa.

To address these concerns, Kenya has intensified its engagement with EAC institutions and member states. During the First Extraordinary Sectoral Council on Finance and Economic Affairs (SCFEA), Kenya and its counterparts instructed the EAC Secretariat to compile a comprehensive list of excise duties, levies, and charges that contradict the Customs Union Protocol. This list is expected to be submitted by 30 August 2025. Additionally, the Secretariat has been tasked with harmonising definitions of ‘imports’ and ‘exports’ across member states by 30 June 2025, and convening a follow-up compliance-focused SCFEA session by 30 September. 

In addition to these multilateral efforts, Kenya and Tanzania have scheduled bilateral meetings aimed at resolving specific trade disputes. These include a technical session on tobacco product trade in Arusha scheduled for 4–5 August, followed by a Joint Trade Committee meeting on levies and charges from 11–12 August. Kenyan officials remain optimistic that these dialogues will yield constructive outcomes, grounded in the EAC’s foundational principles of free movement and economic cooperation. 

The Tanzanian directive has also triggered domestic criticism within Kenya. Bernard Shinali, chair of the National Assembly Trade Committee, cautioned that the move could incite retaliatory restrictions, potentially worsening bilateral relations. Transporters and tour operators have expressed considerable alarm over the policy shift, arguing that it jeopardises livelihoods and undermines efforts to encourage intra-African travel.

“Cross-border tour services are crucial in promoting intra-African travel, and they rely on seamless cooperation between member states,” they said in a joint statement.