Tanzania Fires the First Shot in Restricting Foreign Participation in Selected Business Sectors

In a move that has stirred both nationalistic pride and regional concern, Tanzania has enacted the “Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025”, a regulation rooted in its new Finance Act of 2025. This order prohibits non-citizens from participating in a list of 12 specific business activities marking a significant pivot in its trade and investment policy at a time when the African Continental Free Trade Area (AfCFTA) is calling for more openness and integration.

The Ministry of Industry and Trade now holds the legal authority to prohibit non-citizens from entering into these strategic sectors. The Tanzanian government justifies the order as part of its industrialization strategy, employment generation agenda, and inclusive economic growth framework.

The Sector is now banned from foreign nationals’ Participation

Under the new order, the following business activities are now reserved exclusively for Tanzanian citizens:

1. Mobile phone and electronic device repair
2. Salon and beauty services
3. Postal and parcel delivery services
4. Local tour guiding
5. Establishment and operation of radio and TV stations
6. Operation of museums and curio shops
7. Real estate brokerage
8. Clearing and forwarding services
9. On-farm crop purchasing
10. Small-scale mining
11. Operation of gambling machines
12. Micro and small-scale industrial operations

These sectors are viewed by the government as low-capital, high-employment activities a vital source of income for the informal sector, which makes up over 70% of Tanzania’s workforce.

Implications for Tanzania’s Domestic Economy

From a domestic standpoint, this policy signals a strong protectionist stance aimed at building national capacity, enhancing job creation, and strengthening grassroots entrepreneurship. It reflects an attempt to ring-fence the economic value chains that most directly impact the livelihoods of ordinary Tanzanians.

For local entrepreneurs, this could mean reduced competition, more opportunities for business ownership, and a chance to gain a firmer foothold in sectors often dominated by small foreign investors, particularly from neighboring countries.

The policy also aligns with the broader goals of Tanzania’s Vision 2025, which emphasizes economic self-reliance and sustainable industrial development.

Implications for Intra-African Trade and AfCFTA Goals

However, regionally, this development poses a challenge to the ideals of the African Continental Free Trade Area (AfCFTA) and the East African Community (EAC) both of which prioritize free movement of goods, services, and people across borders.

Tanzania’s move could be interpreted as a form of non-tariff barrier (NTB), potentially disrupting cross-border trade flows, foreign direct investment (FDI), and economic integration within the EAC and beyond. Already, a Ugandan national has filed a case before the East African Court of Justice, challenging the legality of the restrictions in the context of regional treaties and protocols.

If other African countries follow suit, we could witness a domino effect of economic nationalism, thereby undermining the shared objectives of the AfCFTA, which seeks to create the largest single market in the world by number of countries.

Strategic Considerations for Foreign Investors

For foreign entrepreneurs and investors, especially those from neighboring African countries, the policy requires immediate compliance adjustments. Investors must now:

1. Reassess market entry strategies, focusing on permitted high-capital sectors (e.g., energy, infrastructure, large-scale agribusiness, and manufacturing).

2. Engage with legal advisors and regulatory consultants to ensure alignment with Tanzanian law.

3. Consider joint ventures or partnerships with Tanzanian citizens, where feasible.

4. Monitor ongoing legal and policy developments, especially any regional arbitration or EAC rulings.

The Balancing Act: National Priorities vs Regional Solidarity

This policy development underscores the tension between national sovereignty and regional cooperation. While Tanzania is within its rights to protect its domestic economic interests, it must also manage the diplomatic and economic consequences of alienating regional partners.

For AfCFTA and EAC institutions, this is a critical moment to engage member states in dialogue about harmonizing investment policies, ensuring that youth employment goals and SME development do not come at the cost of continental unity.

Conclusion: Tanzania is Still Open for Business—With Conditions

While the order marks a shift toward protectionism, it is not a blanket rejection of foreign business activity. Rather, it is a call for recalibration, an invitation for foreign investors to bring capital-intensive, technology-driven, and value-adding investments into Tanzania.

The message is clear: Tanzania remains open for business, but not all businesses are open to foreigners. For entrepreneurs and stakeholders across Africa, success in the Tanzanian market will now depend on strategic positioning, legal awareness, and respectful alignment with national priorities.