Tanzania recently decided to reserve small businesses for its citizens, so as to safeguard them from foreign market interference. This stand has made advocates in Kenya together with business leaders in East Africa protest against this new policy. The directive was issued through government notice No.487A dated July 28 2025.
This new regulation prohibits foreigners from engaging in 15 specific business sectors that are considered grassroots economic empowerment and traditionally dominated by Tanzanians. The businesses include retail and wholesale trade with exclusion of supermarkets, mobile money transactions, tour guiding, small scale manufacturing, mobile money transactions, real estate brokerage, parcel delivery services and small industry operations.
Other businesses include providing domestic and environmental cleaning services, on farm crop purchasing, clearing and forwarding services and small scale mining operations. The government has also barred foreigners from operating gambling machines except with casino premises.
Mr. Severine Mushi the chairperson of the Kariakoo Traders Association in Dar es Salaam says the move was brave and imperative, considering that many local businesses have long been weakened by competition from foreigners operating without proper investment credentials.
Violators of the order will face stiff penalties. Non-citizens found conducting prohibited businesses may be fined no less than 10 million Tanzanian shillings, face up to 3 months imprisonment and risk deportation through visa and permit revocation. Moreover, Tanzanians citizens who aid foreigners in evading the ban may be fined 5milion Tanzanian shillings or jailed for up to 3months.
This regulation also includes a transition period for non citizens who currently hold valid business licence in the listed sectors allowing them to continue trading until their permits expire although renewals will not be permitted.
Foreign investors
The Director of Policy and Advocacy at the Confederation of Tanzania Industries, Mr.Mnyenyelwa says that there are still legitimate pathways for foreign investors to engage with Tanzanians economy particularly via the Tanzania Investment Sector, where clear capital threshold and regulatory compliance are required.
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