'Tanzania banning foreigners from owning small businesses illegal, threatens regional integration'

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A Ugandan lawyer has petitioned the East African Court of Justice (EACJ) over Tanzania banning foreigners from owning small businesses.

Steven Kalali, who wants EACJ to rebuke Tanzania over the move, filed the suit against the Attorney General of the United Republic of Tanzania in the EACJ on July 31, 2025.

The lawyer argues that prohibiting business activities by non-citizens in Tanzania is illegal.

A fortnight ago, Tanzania’s government enacted the Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, which prohibits non-citizens from engaging in 15 specific business activities in the country.

Some of the businesses banned are mobile money transfers, tour guiding, small-scale mining, on-farm crop buying, beauty salons, curio shops and establishing radio and TV operations.

Signed into law on July 25, 2025, the order aims to reserve certain sectors exclusively for Tanzanians and promote local economic growth.

However, Kalali contends that the legislative order contravenes various treaty provisions and the common market protocol.

The lawyer asserts that the legislation constitutes a tariff barrier to trade and contravenes articles of the protocol for the establishment of the East African Community (EAC) Common Market and the treaty for the establishment of the EAC.

“The acts of Tanzania through its respective ministry in passing the legislation, yet it is a signatory/member of the EAC, violates its obligation under the treaty for the establishment of the EAC and the protocol for the establishment of the EAC Common Market,” he contends.

Kalali swore an affidavit, stating that Tanzania, as a partner state, should ensure the rule of law and free trade without unjustified tariff barriers.

The lawyer argues that despite widespread condemnation from various organisations and civil societies, Tanzania’s actions have gone unchecked.

He has asked the court to censure Tanzania’s actions, saying allowing it to continue with its decision would undermine the regional integration block’s intent for a common market.

“This could set a precedent for other countries to enact similar laws, harming citizens who invest and trade across borders,” he said.

The lawyer also said that Tanzania’s actions compromise good neighbourliness and may prompt other states to adopt similar undesirable legislation, ultimately frustrating the common market protocol and hindering trade.

Prayers  

The lawyer seeks an order quashing Tanzania’s directive, prohibiting business activities by non-citizens made under the Business Licensing Act, arguing that it is null and void owing to violation of the EAC treaty and common market protocol.

Kalali also wants the court to issue a permanent injunction, restraining Tanzania from continuing to do acts that are detrimental or contravene the EAC treaty and common market.

He also seeks a declaration that the provisions of Section 3 (1) and (4) of the business licensing order 2025 contravenes Article 24 (b), 29 (a) (b) , 13 (5) (11) and 16 of the protocol for the establishment of the EAC Common Market and Articles 3, 5, 7, of the EAC treaty.

The provisions provide for free movement of goods and persons, between partner states.

The lawyer requests that Tanzania be compelled to pay the costs of the suit should he emerge victorious.