On July 28, 2025, a bold move to prioritize local economic empowerment, the Tanzanian government has issued a sweeping directive prohibiting non-citizens from engaging in 15 key small- and medium-scale business sectors. The Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, signed by Minister of Industry and Trade Selemani Saidi Jafo on July 25 and effective from July 28, 2025. Tanzania bans non-citizens from certain business sectors in a move aimed at reserving them exclusively for Tanzanian nationals — a decision that has sparked both support and controversy across the region.
Tanzania’s New Business Licensing Order: Who Is Affected and What’s Banned
Published under Government Notice No. 487A, the new regulation explicitly bars non-citizens from obtaining or renewing business licenses in sectors traditionally dominated by Tanzanian entrepreneurs. The prohibited activities include:
- Wholesale and retail trade (excluding supermarkets and specialized product outlets)
- Mobile money transfers
- Repair of mobile phones and electronic devices
- Salon businesses (unless conducted in hotels or for tourism purposes)
- Home, office, and environmental cleaning services
- Small-scale mining
- Postal and parcel delivery services within the country
- Tour guiding
- Establishment and operation of radio and television stations
- Operation of museums or curio shops
- Brokerage or agency services in business and real estate
- Clearing and forwarding services
- On-farm crop purchasing
- Operation of gambling machines outside licensed casino premises
- Ownership and operation of micro and small industries
As Tanzania bans non-citizens from dealing in small scale businesses, those currently holding valid licenses in these sectors may continue operations until their permits expire; however, renewals will not be granted. Violators face steep penalties, including fines of up to TZS 10 million ( Approximately USD 3,870), imprisonment for up to six months, and revocation of visas and residence permits. Tanzanian citizens who aid non-citizens in circumventing the rules risk fines of up to TZS 5 million (Approximately USD 1,935) or a three-month jail term.
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Why Tanzania Is Prioritizing Local Entrepreneurs Over Foreign Small Businesses
The directive is a response to mounting complaints from local traders, especially in commercial hubs like Dar es Salaam’s Kariakoo market, where foreign nationals—particularly from China and neighboring East African countries—have been accused of dominating small-scale business sectors. Local entrepreneurs, supported by organizations such as the Kariakoo Traders’ Association and the Confederation of Tanzania Industries (CTI), argue that foreign competition has created an uneven playing field, sidelining Tanzanian businesses in low-margin sectors crucial to grassroots economic development.
“This decision protects the livelihoods of Tanzanian traders,” said Severine Mushi, Chairperson of the Kariakoo Traders’ Association. “For years, we’ve seen foreigners take over businesses like electronics, textiles, and mobile accessories, often operating informally or under Tanzanian names. This move ensures fairer competition and returns economic control to citizens.”
Akida Mnyenyelwa, CTI’s Director of Policy and Advocacy, echoed similar sentiments, commending the order for promoting inclusive industrial growth.
“We want small industries to be in Tanzanian hands. This gives local entrepreneurs a chance to start small, build capacity, and grow into medium- and large-scale enterprises,” he stated, emphasizing that the policy does not completely shut out foreign investment but instead draws a clear distinction between large-scale and informal participation.
The government views the policy as part of its broader Agenda 10/30 strategy, which seeks to increase agriculture’s GDP contribution to 10% by 2030 while reducing unemployment and enhancing citizen-led growth. It also aligns with a continental trend, with countries like Ghana, Nigeria, South Africa, Zimbabwe, Zambia, and Botswana adopting similar protectionist measures to reserve informal and small-scale economies for their citizens.
What the Ban Means for Regional Trade and Economic Integration
While the directive has received overwhelming support from local traders and manufacturers, it has raised significant concerns about its potential impact on regional integration, especially within the East African Community (EAC). The EAC Common Market Protocol, which guarantees the free movement of goods, persons, labor, services, and capital, may be undermined by these new restrictions.
John Lual Akol, Chairperson of the East African Business Council (EABC), criticized the move, calling it a violation of the EAC Treaty:
“This move undermines the EAC’s six freedoms and takes us back 15 years,” he warned, suggesting that affected countries might retaliate with similar restrictions on Tanzanian citizens.
Kenya, which exported goods worth TZS 67.2 billion to Tanzania in the past year, has seen leaders—such as Jas Bedi of the Kenya Private Sector Alliance—urge President William Ruto’s administration to consider reciprocal action.
The directive also calls into question Tanzania’s commitment to broader pan-African initiatives such as the African Continental Free Trade Area (AfCFTA), which aims to establish a single African market for goods and services. For sectors like fintech, mobile money, and digital platforms, the restrictions could curtail cross-border innovation and hamper Tanzania’s ambitions to become a regional tech hub.
The Policy’s Impact on Investment, Diplomacy, and Economic Stability
Analysts predict mixed economic outcomes. While the policy may encourage local entrepreneurship and self-reliance, critics argue that it could discourage small-scale foreign investors already integrated into the Tanzanian economy—particularly in urban areas. The absence of clear transitional guidelines for existing foreign-owned businesses only adds to the growing uncertainty.
This measure follows other recent economic reforms, including a March 2025 directive from the Bank of Tanzania requiring all domestic transactions to be conducted in Tanzanian shillings—part of a larger effort to stabilize the currency, which depreciated to TZS 2,692 per USD in May 2024. Additionally, a new rule mandates that non-EAC/SADC tourists purchase travel insurance, aimed at reducing the burden on public healthcare.
These developments reflect Tanzania’s push for greater economic independence but may strain diplomatic ties with key partners as Tanzania bans non-citizens from small busineses.
Tanzania’s Push for Economic Empowerment Amid Regional Pressures
Tanzania bans non-citizens from 15 small-scale business sectors marks a significant shift toward economic indigenization. While the policy is designed to promote local participation and reduce unemployment, it raises important questions about the country’s commitment to regional integration and international cooperation.
As the October 2025 general election approaches, President Samia Suluhu Hassan’s administration faces the challenge of balancing national economic interests with its obligations to the EAC, AfCFTA, and the wider global economy.
For foreign nationals operating in Tanzania, navigating this new regulatory landscape will require careful compliance. As the government strengthens efforts to empower its citizens, the long-term effects of this policy—on both the economy and Tanzania’s regional relationships—will be closely monitored.
