The Government of Kenya has expressed serious concern over recent regulatory and fiscal measures introduced by the United Republic of Tanzania, warning that the changes could undermine the progress made in regional economic integration within the East African Community (EAC).
Speaking on behalf of the Kenyan government, Cabinet Secretary for Investments, Trade and Industry, Hon. Lee Kinyanjui, cautioned that the new policies pose a threat to the spirit and letter of the EAC Common Market Protocol, which promotes the free movement of goods, services, people, and capital across member states.
“The measures taken by Tanzania are substantive and undermine the core objective of regional economic integration under the Common Market Protocol,” said Kinyanjui.
According to the Ministry of Investments, Trade and Industry (MITI), the EAC remains Kenya’s largest export destination, accounting for 28.1% of its total global exports equivalent to sh. 297 billion in 2024.
Uganda remains Kenya’s top trading partner in the region, followed by Tanzania, with trade between Kenya and Tanzania reaching Ksh. 63 billion in the same year.
However, tensions have escalated following the enactment of Tanzania’s Finance Act, 2025 and amendments to the Excise (Management and Tariff) Act, 2019, which introduced new excise duties and an Industrial Development Levy of 10% and 15%, respectively.
Kenya argues that these measures are not only discriminatory but also contradict the commitments made under the EAC Customs Union Protocol.
Of even greater concern is Tanzania’s Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, which bans foreign nationals including citizens of EAC member states from operating in 15 specified business sectors, including micro and small industries.
The directive takes immediate effect and includes severe penalties for violators, although current license holders are temporarily exempt.
“While we respect the sovereignty of partner states, any measures that impact cross-border trade must be implemented in consultation and alignment with EAC protocols,” Kinyanjui stated.
“Criminalizing lawful EAC investments through this order risks hurting both economies.”
Citing Article 13 of the EAC Common Market Protocol, which guarantees EAC citizens the right to establish and operate businesses across member states without discrimination, Kenya has called on Tanzania to reverse the restrictive policies and return to compliance with agreed regional frameworks.
To address these concerns, Kenya has engaged in a series of consultative regional forums.
During the 1st Extraordinary Sectoral Council on Finance and Economic Affairs (SCFEA), in which Kenya actively participated, the EAC Secretariat was tasked with compiling a comprehensive list of duties and levies by partner states that contravene the Customs Union Protocol. The list is expected to be submitted by August 30, 2025.
The SCFEA also instructed member states to align national definitions of “imports” and “exports” with EAC standards by June 30, 2025, and to convene a compliance-focused second SCFEA session by September 30, 2025.
In parallel, Kenya and Tanzania have scheduled a series of bilateral engagements aimed at resolving the ongoing disputes.
These include a technical meeting on the tobacco trade in Arusha on August 4–5, and a Joint Trade Committee session on levies, fees, and charges from August 11–12.
“We are optimistic that these engagements will yield positive results, grounded on the EAC’s foundational principles of cooperation, non-discrimination, and regional prosperity,” Kinyanjui said.
Kenya reaffirmed its commitment to the vision of the EAC “One People, One Destiny” and pledged to uphold the principles of fairness, transparency, and equity in all future trade-related decisions.
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