The building collapse that sparked Tanzania's jobs ban

The collapse of a four-storey building in Kariokor Market, Dar es Salaam, Tanzania, in November 2024 triggered events that led to a ban on foreigners from engaging in some businesses in the country.

The incident, which left at least 13 dead, culminated in a gazette notice by the Tanzanian Minister for Industry and Trade Selemani Saidi Jafo, on July 25 this year, announcing the ban.

Earlier this year, President Samia Suluhu attended a luncheon to celebrate the heroes and heroines who participated in rescue operations following the incident.

It was at this event that President Suluhu spoke extensively about the challenges that affect small business owners, such as street vendors known as mmachinga in the local dialect.

One of the issues she referenced was the infiltration of foreigners in the sector. She said the matter had earlier been brought to her attention through a video of two traders, one a foreigner and the other a Tanzanian, exchanging blows at a market.

“Haiwezekani mgeni akawa mmachinga. Vijana wetu watafanya kazi gani? (foreigners cannot be street vendors. What will our youth do?” she posed as she directed the Minister for Industry and Trade to take the appropriate action.

It is this roadside directive that set the ball rolling for the gazetting of the outlawing of foreigners engaging in some businesses, an action that has strained the fragile trade ties between the two neighbouring countries, which are members of the East African Community (EAC).

This directive led to a proposal presented by Tanzanian Minister for Finance Dr Mwigulu Lameck Nchemba Madelu on June 12, 2025, presented to Parliament, where he proposed to amend the Business Licensing Act, CAP 101.

“In order to enable the country to adopt enhanced trade policies and create a more conducive environment for business between citizens and non-citizens, I propose to amend the Business Licensing Act, CAP 101,” he said in his speech.

The minister proposed to repeal Section 3(4) of the Act, which obliges business licensing authorities to order closure of a business upon breach of law by the owner and introduced a new section, 8(7), empowering the trade minister to designate a list of business activities that shall be prohibited for conduct by non-citizens.

“The order issued pursuant to this provision shall set out the list of business activities that non-citizens are not permitted to undertake in order to enable the country to adopt enhanced trade policies and create a more conducive environment for business between citizens and non-citizens,” he said.

These proposals were fed into the Finance Bill, 2025, which later became law.

“A licensing authority shall not issue a business license to a non-citizen unless such business is allowed for non-citizens,” reads Part VI Section 14A of the Act.

It adds: “The Minister may, by order published in the Gazette, specify business activities which shall not be carried out by non-citizens.”

In a gazette notice dated July 28, 2025, the Trade Minister Jafo came up with the said list, which details the business activities prohibited for non-citizens.

They include the sale of goods on a wholesale and retail basis (excluding supermarkets, specialised product outlets and wholesale centres for local producers), mobile money transfers, mobile phone and electronic repair, small scale farming, home office or environmental cleanliness, salon business unless is conducted in a hotel or for tourism purposes, postal activities, tour guiding, establishing a radio or television station, and operation of museums or curio shops.

Others are brokerage or agency in business or real estate, clearing and forwarding, on-farm crop purchasing, ownership or operation of gambling machines, except within a casino and ownership and operation of micro and small industries.

Foreigners flouting the law shall be liable to a fine of not less than Sh500,000 (Tsh10 million) or imprisonment for a term not exceeding six months and revocation of visa and resident permit.

“In case of a Tanzanian citizen, such person assists or aids a non-citizen to carry out any of the business activities prohibited under this order, and upon conviction shall be liable to a fine of Tsh5 million (Ksh250,000) or imprisonment for a term not exceeding three months,” the gazette notice by the minister says.

When asked about the rationale of the new law, Minister Jafo cited the high number of foreigners engaging in these businesses at the expense of locals.

He said the decision was informed by research and analysis of the affected sectors.

“We formed a team of experts who did research. The findings indicated that there has to be a restriction on the kind of business [foreigners can engage in],” he said in an interview with a Tanzanian online outlet.

He said the listed businesses are supposed to be done by Tanzanians to protect jobs.

“It cannot be that you find a foreigner brokering a house,” he said. “But this also gives an opportunity to investors from outside to inject their money in creating larger industries that can create more jobs.”

Kenya's Cabinet Secretary for Investments, Trade and Industry Lee Kinyajui reacted to the new law, detailing how Tanzania is Kenya’s second-largest EAC trading partner after Uganda, with intra-community revenues of Sh63 billion recorded in 2024.

He said the government has noted with concern the imposition of the restriction on business engagement by foreigners, which he said threatens regional trade.

The CS said while Kenya respects the sovereignty of EAC partners, it also believes in consultation.

Apart from the new law, he noted that the Tanzanian Finance Act, 2025, also introduced excise duties and the industrial development levy, at 10 per cent and 15 per cent respectively, through the amended Excise (Management and Tariff) Act 2019.

“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,” said the CS.

When compared to Tanzania, which has about three million small and medium enterprises (SMEs) recorded in several official data sites such as the World Bank, Kenya boasts 7.5 million entities, according to a 2016 report by the Kenya National Bureau of Statistics (KNBS).

These sectors contribute 40 per cent and 27 per cent to Kenya's and Tanzania's gross domestic product, respectively.

Unlike Uganda, which seems to share a more cordial relationship with Kenya, the business rivalry with Tanzania never seems to end.

During the reign of the late President John Pombe Magufuli, Tanzania auctioned more than 1,300 heads of cattle belonging to Kenyan herders, who had crossed over into the country in search of pasture in 2017.

The auction conducted in Mwanga District was overseen by the Ministry of Livestock and Fisheries, with the Tanzanian government raising Tsh200 million (Sh10.2 million) from the exercise.

In the same year, the Tanzanian government set on fire 6,400 chicks imported from Kenya worth Sh12.5 million. The destruction was in line with the country’s Animal Disease Act, 2003, over fears of Avian Flu.

The move was in retaliation for Kenya's ban on the importation of cooking gas from Tanzania in May that year. The move was arguably to address the illegal gas filling business in the country, something the East African neighbour did not take lightly.

Last year, Kenya and Tanzania had a spat when President Suluhu withdrew Kenya Airways' rights to fly into Dar es Salaam after Kenya blocked Air Tanzania's cargo operations on the Nairobi route.

The matter was later settled, with both countries reversing the bans.