Uganda’s EABC Director-Kamukama Warns Of ‘Fragmented Bloc’ As Tanzania Bars Non-Citizens From Key Businesses

By Frank Kamuntu

A sweeping business restriction order by the Tanzanian government is stirring unease across the East African business landscape, with private sector leaders warning of a chilling effect on investor confidence and regional economic integration.

The new directive, issued on July 28, 2025, bars non-Tanzanian citizens—including nationals of fellow East African Community (EAC) partner states—from operating in 15 key sectors, including mobile money services, tour guiding, parcel delivery, retail trade, and small-scale manufacturing. Licensing authorities have been instructed not to issue or renew business licences for non-citizens engaged in these areas, marking one of the region’s most restrictive moves in recent years.

The order has sent tremors across boardrooms and marketplaces from Kampala to Kigali, as entrepreneurs, investors, and trade associations assess the potential fallout on cross-border business operations.

Ugandan economist and Director at the East African Business Council (EABC), Oscar Kamukama, reacting to the directive from Kampala, described the move as a “blow to regional predictability,” and said it may significantly erode the goodwill and certainty businesses rely on when making cross-border investments.

“We must be careful not to signal to our own citizens and investors that the rules of regional cooperation can be suspended at will,” Kamukama said. “This order introduces regulatory ambiguity, and that’s a threat to business.”

While Kamukama acknowledged Tanzania’s sovereign right to govern its domestic markets, he stressed that such unilateral policy shifts contradict key tenets of the EAC Common Market Protocol, which guarantees the free movement of goods, services, capital, and people across the region’s borders.

“A fragmented bloc, where member states pick and choose which regional commitments to follow, creates a dangerous precedent for economic disintegration,” he added.

Private Sector Anxiety Grows

Business operators across Uganda and Kenya have expressed worry over what they view as creeping protectionism within the region, at a time when African economies are seeking to strengthen cooperation under both the EAC and the African Continental Free Trade Area (AfCFTA).

According to the EABC, which serves as the regional voice of the private sector, multiple cross-border investors have reached out seeking legal clarity on the implications of the Tanzanian directive for existing operations.

“The private sector needs consistency,” said Kamukama. “We invest for the long term, and long-term investment requires long-term policy stability.”

The directive, published under Tanzania’s Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, comes with stiff penalties. Non-citizens found operating in the restricted sectors face fines of no less than 10 million Tanzanian shillings (approximately UGX 14 million), imprisonment of up to six months, and revocation of residence permits. Tanzanian citizens who facilitate violations will also be penalized.

A transitional clause allows non-citizens with valid business licenses to continue operations only until those licenses expire—no renewals will be issued thereafter.

Call For Constructive Dialogue

The EABC has indicated it will seek high-level dialogue with Tanzanian authorities in the coming weeks, while urging other EAC member states to collectively reaffirm their commitment to inclusive integration and business-friendly policy harmonization.

“Now is not the time for insular policies,” Kamukama cautioned. “We need to protect the integrity of the EAC project by ensuring all sides feel protected, welcomed, and respected.”

Analysts warn that if the directive is not reversed or reinterpreted in a manner consistent with EAC obligations, it could embolden other partner states to adopt similar restrictions—further complicating the region’s already fragile integration progress.

For now, the private sector remains on edge, watching to see whether the EAC’s commitment to a common market will stand up to national protectionist pressures.