Nairobi protests Tanzania's new rules on traders

EAC Principal Secretary Caroline Karugu says Tanzania's move risks "undermining regional economic integration efforts. [Wilberforce Okwiri, Standard]

Kenya has formally complained to Tanzania over orders restricting foreigners from engaging in 15 categories of small-scale business activities.

In a statement, East African Community Principal Secretary Caroline Karugu warned Tanzania's move risked "undermining regional economic integration efforts under the East African Community (EAC)."

The targeted businesses, whose licences the President Samia Suluhu's government directed licensing authorities against renewing, include mobile money transfers, tour guiding, small-scale mining, on-farm crop buying, beauty salons, curio shops and establishing radio and TV operations.

"Kenya has noted that the order is inconsistent with key provisions of the EAC Common Market Protocol, particularly Articles 13(1), 13(3)a, 13(5), 13(8) and 13(9), which guarantee the free movement of persons, services, and the right of establishment for citizens of partner states," said Karugu.

Tanzania's Trade Minister Selemani Jafo amended the Business Licensing Act, a move he said would see Kenya's neighbour reap more large-scale foreign investments and have its small and medium-scale businesspersons protected.

On Wednesday, Presidents William Ruto and Yoweri Museveni decried the various challenges to doing business in the region.

Ruto said that persistent non-tariff barriers had hindered the flow of goods and frustrated "the objectives of regional integration under the EAC framework."

Museveni, on an official visit to Kenya, said East African nations must open up their markets to EAC neighbours, even as he urged countries with coastlines to grant more access to landlocked ones.

Similarly, Lee Kinyanjui, the Cabinet Secretary for Investment, Trade and Industry, hinted at retaliation, calling out Tanzania for criminalising foreign investments.

"The Business Licensing Order, which seems to be criminalising lawful EAC investments, will hurt both our economies. It is, therefore, critical, in the spirit of EAC, that bilateral engagements be held to resolve these issues.

Prime Cabinet Secretary Musalia Mudavadi, too, opposed the move, saying Ruto would work the issue out with Suluhu "diplomatically."

Karugu also faulted the heavy penalties targeting foreigners found flouting the directive. Among the penalties are a fine of not less than Tsh10 million (about Sh500,000), a six-month jail term, the revocation of visas and residence permits.

"The Order undermines the core objectives of regional economic integration and poses a significant setback to the gains made under the East African Community Common Market Protocol... I have officially written to the EAC Secretariat to notify the United Republic of Tanzania to review the Order to ensure full compliance with the EAC Treaty and Community Laws," said Karugu.