Tanzania restricts foreign ownership in key small business sectors to prioritize local entrepreneurs and tackle unemployment.
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| President Samia Suluhu Hassan of Tanzania, , oversees the implementation of new regulations banning foreigners from operating certain small businesses to empower local entrepreneurs. |
In a major policy shift aimed at promoting local entrepreneurship and addressing unemployment, Tanzania has announced a ban on foreigners operating certain small and medium-sized businesses across the country. The new regulations, outlined in a government Gazette on July 28, 2025, prohibit non-citizens from engaging in specific sectors such as salons, retail outlets, eateries, tour guiding services, and direct crop purchases from farms.
Scope of the Ban
The Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, signed by Trade Minister Selemani Jafo, restricts foreign nationals from obtaining or renewing licenses in at least 15 small and medium business categories. These include:
- Retail and wholesale trade (excluding supermarkets and specialty outlets)
- Mobile money transfer services
- Electronic and mobile phone repairs
- Tour guiding services
- Small-scale mining
- Postal and parcel delivery services
- Real estate brokering
- Cleaning services for homes, offices, and the environment
- Salon businesses (unless tied to hotels or tourism)
- On-farm crop purchasing
- Ownership and operation of radio and television stations
- Gambling machine operations outside casinos
- Museum shops
This comprehensive list reflects Tanzania’s commitment to empowering its citizens economically by reserving these business opportunities exclusively for Tanzanian nationals.
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| A local Tanzanian shop owner manages their retail outlet, benefiting from new government policies that restrict foreign ownership in small businesses. |
Legal and Economic Context
The new restrictions align with the Tanzania Investment Act and represent a strategic move to encourage citizen-led economic growth. Trade Minister Jafo emphasized that the policy is designed to open up vital sectors for local entrepreneurs, ensuring that Tanzanians can benefit more directly from their country’s economic activities.
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| Women vendors at a bustling Tanzanian market, representing the local entrepreneurs the government aims to empower through its new business restrictions. |
Regional and International Implications
While the policy has been welcomed by some local stakeholders, it has sparked concerns among neighboring East African Community (EAC) countries. Critics argue that the ban could introduce non-tariff barriers that undermine the EAC’s goals of free movement of people, goods, and services within the region. Foreign investors and regional businesses may face new challenges navigating Tanzania’s stricter business environment.
Implementation and Compliance
The ban took effect immediately upon publication, and foreign nationals currently operating in the affected sectors have been urged to consult the Ministry of Trade and Industry for guidance on compliance and possible transition arrangements.
Tanzania’s decision marks a significant shift in its approach to foreign investment, balancing the need to attract external capital with the desire to safeguard local economic interests. The coming months will reveal how this policy impacts both domestic economic growth and regional trade dynamics.
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