Kenya has issued a formal protest demanding Tanzania immediately abolish newly imposed excise duties, a hefty industrial development levy, and business restrictions targeting foreigners, including Kenyans. Trade Cabinet Secretary Lee Kinyanjui condemned the measures as “discriminatory” and warned they undermine the core principles of the East African Community (EAC).
Tanzania’s Controversial Moves:
- New Taxes: Enactment of the Tanzania Finance Act 2025 and amendments to the Tanzania Excise (Management and Tariff) Act 2019 introduced a 10% excise duty and a 15% Industrial Development Levy.
- Business Bans: A notice from Tanzanian Industry and Trade Minister Selemani Saidi Jafo barred foreigners, including Kenyans, from operating in 15 specific small and medium-sized sectors. These include:
- Postal and parcel delivery services
- Tour guiding
- Establishing/operating radio and TV stations
- Operating museums and curio shops
- Business and real estate brokering
- Clearing and forwarding services
- Licensing Order: Kenya also raised concerns over Tanzania’s Business Licensing Order, which it believes unlawfully restricts legitimate EAC investments.
Kenya’s Strong Objections:
In a strongly worded statement, CS Kinyanjui asserted that Tanzania’s actions violate the spirit and protocols of the EAC Customs Union and Common Market Protocol (CMP), whose objective is regional economic integration. He warned that the measures would damage both the Kenyan and Tanzanian economies.
“Kenya requests that these restrictions be removed and that Tanzania reverts to measures provided for in the EAC protocol,” Kinyanjui stated. He emphasized that Kenya, through the Ministry of Investment, Trade and Industry (MITI), has been actively participating in consultative forums to align trade measures with EAC principles.
Retaliation on the Table:
While Kenya’s immediate response focuses on diplomacy, Kinyanjui made it clear that retaliation remains a possibility if Tanzania fails to reverse course during upcoming talks. “While retaliation will not be the immediate move taken by Kenya, it won’t be ruled out if Tanzania does not reciprocate,” he revealed.
Political Pressure in Kenya:
The Tanzanian measures have sparked anger in Kenya, with politicians urging a tough stance. Nandi Senator Samson Cherargei called on President William Ruto’s government to impose mirror bans. “The Kenyan government must retaliate by also banning Tanzanian businesses in Kenya, including street beggars from Tanzania in our cities and towns,” Cherargei stated.
Diplomatic Engagements Scheduled:
To resolve the escalating trade dispute, key meetings have been scheduled:
- A technical meeting focusing on tobacco product trade in Arusha, Tanzania, on August 4-5, 2025.
- A Joint Trade Committee meeting to review levies, fees, and charges, scheduled for August 11-12, 2025.
The outcome of these talks will be crucial in determining whether the two EAC neighbours can resolve their differences amicably or if a damaging tit-for-tat trade war will erupt, threatening regional integration efforts.
