Kenya is set to initiate high-level bilateral talks with Tanzania in early August following the introduction of new trade restrictions and fiscal measures by the Tanzanian government that Nairobi claims undermine the principles of regional integration under the East African Community (EAC) framework.
The announcement was made by Lee Kinyanjui, Kenya’s Cabinet Secretary in the Ministry of Investments, Trade and Industry, during a press briefing on Wednesday. He expressed deep concern over several measures contained in Tanzania’s recently enacted Finance Act 2025, alongside amendments to the Excise (Management and Tariff) Act 2019. Among the changes are the introduction of an industrial development levy of 15 percent and excise duties of 10 percent on selected goods and services.
Kenya is also objecting to Tanzania’s Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, which restricts foreign nationals from operating in 15 economic sectors, including various micro and small-scale enterprises. This directive, which includes strict penalties for non-compliance, came into immediate effect upon enactment, although current licence holders have been temporarily exempted.
Kinyanjui argued that these new regulations are incompatible with the EAC’s Common Market Protocol, which aims to ensure the free movement of goods, services, capital, labour, and the rights of residence and establishment among member states. “These measures are substantive and undermine the core objectives of regional economic integration,” Kinyanjui stated.
He further warned that criminalising business operations that are otherwise lawful under the EAC framework risks disrupting bilateral economic relations and could hinder the region’s broader development goals. “Kenya requests that these restrictions be removed and that Tanzania reverts to measures provided for in the EAC protocol,” he added.
In pursuit of diplomatic resolution, both nations have scheduled bilateral meetings for early August to engage in constructive dialogue concerning the recent policy changes and other trade-related grievances. The Kenyan government is advocating for a return to regulatory coherence in line with the commitments made under the EAC’s foundational agreements.
According to the Ministry of Investments, Trade and Industry, the EAC remains Kenya’s largest export destination, absorbing approximately 28.1 percent of its total exports, which were valued at US$2.3 billion in 2024. Tanzania is Kenya’s second-largest trading partner within the EAC, with bilateral trade reaching US$487 million in the same year, trailing only Uganda.
The EAC, comprising seven partner states, has long pursued a policy of economic harmonisation and market liberalisation. Kenya’s response to Tanzania’s new measures highlights the ongoing tensions between national sovereignty and regional integration—a dynamic that has periodically tested the cohesion of the regional bloc.
Kenyan officials have reiterated their preference for diplomatic engagement and expressed confidence that ongoing consultations will yield a mutually agreeable path forward. Observers note that how this issue is resolved may set a precedent for addressing future conflicts within the EAC framework.
