EAC warns member states as Tanzania bans small foreign traders

Tanzania President Samia Suluhu Hassan during her address to a joint parliamentary session in Nairobi on Wednesday, May 5 2021. [David Njaaga, Standard]

The East African Community (EAC) has cautioned member states against taking unilateral actions that violate the bloc's Common Market Protocol, which guarantees the free movement of people, goods, services, and capital across the region.

The warning follows Tanzania's decision to ban small businesses and services operated by foreign nationals, a move intended to protect local service providers.

However, the EAC said such restrictions undermine efforts to liberalise the regional single market and deter cross-border investments.

"Since the adoption of the EAC Common Market Protocol, Partner States have committed to fostering regional integration by removing barriers to trade, services and investment and to refrain from introducing unilateral measures that hinder the free movement and establishment rights of citizens and businesses across the region," EAC Secretariat said in a statement.

The Secretariat further accused some member states of reneging on commitments made during the Sectoral Council on Legal and Judicial Affairs, which brought together Attorneys General from across the bloc in November last year.

The regional trading block is expected to convene a Sectoral Council on Trade, Industry, Finance, and Investment, where non-compliant states will be held accountable.

"The Secretariat is currently undertaking an analysis of the extent of compliance with obligations and will present any identified inconsistent measures by Partner States at the upcoming meeting," the Secretariat said.

According to EAC Secretary-General Veronica Nduva, it was unfair for countries that are signatories to the Common Market Protocol to fortify their markets despite the agreement explicitly obligating them not to "reverse or restrict sectors and trades they have previously liberalized".

On Friday, Kenya confirmed it had formally protested Tanzania's directive, citing its impact on Kenyan traders operating across the border.

"The order undermines the objectives of regional economic integration and reverses gains made under the EAC Common Market Protocol," said EAC Affairs Principal Secretary Caroline Karugu.

Earlier this week, Tanzania barred foreigners from engaging in 15 selected small businesses, including wholesale and retail, mobile money services, electronics repair, salon operations, and cleaning services.