Tanzanian traders, manufacturers back ban on foreigners in small businesses

 Dar es Salaam,

Tanzania’s business community has backed a newly gazetted government directive barring non-citizens from running small businesses, describing it as a timely move to protect the economic interests of locals.

The new regulation, Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, was published on July 28, 2025 under Government Notice No. 487A and signed by the Minister for Industry and Trade, Dr Selemani Jafo.

It prohibits foreigners from engaging in 15 specific business sectors considered vital to grassroots economic empowerment and traditionally dominated by Tanzanians.

Chairperson of the Kariakoo Traders’ Association in Dar es Salaam, Mr Severine Mushi, described the move as bold and necessary, noting that many local businesses have long been undercut by competition from foreigners operating without proper investment credentials.

“We’ve welcomed this decision because it protects the livelihoods of Tanzanian traders. For years, we’ve seen an influx of foreigners taking over low-margin businesses in Kariakoo, sometimes even operating informally or under Tanzanian names,” he told The Citizen, a publication of the Nation Media Group.

The businesses include retail and wholesale trade (excluding supermarkets), mobile money transactions, small-scale manufacturing, tour guiding, real estate brokerage, parcel delivery services and micro and small industry operations. Other businesses include those providing domestic and environmental cleaning services, on-farm crop purchasing, clearing and forwarding services, and small-scale mining operations.

Gambling machines

Also restricted are the operation of gambling machines outside casino premises, the establishment and running of radio or television stations, and the operation of museums or curio shops.

According to the Order, any non-citizen found conducting the listed businesses is subject to legal penalties, including fines of up to TSh10 million or imprisonment for up to six months. Additionally, their visas and residence permits will be cancelled. Tanzanians who front or assist non-citizens in contravening the law may face fines of TSh5 million or a three-month jail term.

Kariakoo, regarded as Dar es Salaam’s commercial heartbeat, has seen an influx of foreign traders in electronics, mobile accessories, textile sales, and small appliance repairs.

According to Mr Mushi, this has created an uneven playing field, with Tanzanians being edged out by unregulated or unfair competition.

“Now that the government has closed the door to new licences and renewals for foreigners in these sectors, we expect fairer competition and a return of economic control to Tanzanians,” he said. “It’s a sign that the economy is returning to its rightful owners—the citizens of this country.”

The regulation includes a transition period for non-citizens who currently hold valid business licences in the listed sectors, allowing them to continue operating until their permits expire. However, renewals will not be permitted.

In the manufacturing and policy space, the Order has also been praised for promoting inclusive industrial growth.

The Director of Policy and Advocacy at the Confederation of Tanzania Industries (CTI), Mr Akida Mnyenyelwa, said the measure aligns with efforts to empower local innovators and industrialists.

“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 said.

Mr Mnyenyelwa noted that the Order does not shut the door on foreign investment altogether, but draws a clear line between large-scale and informal participation.

Foreign investors

“There are still legitimate pathways for foreign investors to engage with Tanzania’s economy, especially through the Tanzania Investment Centre, where clear capital thresholds and regulatory compliance are required. What the law discourages is the informal, low-capital penetration of sectors that should be preserved for Tanzanians,” he said.

TIC has since been merged with what used to be known as the Export Processing Zones Authority to form the Tanzania Investment and Special Economic Zones Authority.

He added that the long-term benefit lies in domestic reinvestment and employment.

“When small businesses are foreign-owned, profits often leave the country. But when a Tanzanian owns the business, they are more likely to re-invest in the local economy, employ fellow Tanzanians, and contribute to national development. That’s the multiplier effect we’re looking for,” he said.

The Order is also expected to reshape operations in the tourism, logistics, and media sectors. For instance, tour guiding within Tanzania is now exclusively reserved for citizens. Non-citizens are also barred from operating radio and television stations, owning or running museums, or engaging in intermediary roles such as real estate or business brokerage.

Stakeholders say the move reflects a broader national strategy to ensure Tanzanians are at the centre of economic transformation.

“The spirit of the directive is empowerment,” Mr Mnyenyelwa noted. “It’s about protecting spaces where Tanzanians can thrive, while also maintaining room for structured and mutually beneficial foreign investment.”

Observers believe the directive could compel foreign operators to reconsider their strategies in Tanzania, shifting focus towards formalised and capital-intensive investments that bring long-term value to the economy.

The Ministry of Industry and Trade has indicated that enforcement of the Order will be closely monitored through collaboration with local government authorities, immigration services, and regulatory bodies.

As the implementation phase begins, Tanzanians are watching closely to see whether the spirit of the directive will translate into more business opportunities, fairer competition, and a stronger local economy.

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