In a significant win for East African tech and trade, Kenya and Tanzania have struck a deal to exempt Kenyan-owned small businesses from a recent, restrictive ban on foreign enterprises. The agreement immediately scraps four key trade barriers and sets a timeline to clear the rest, restoring predictability for a host of tech-adjacent companies, from ICT consultants to mobile money agents.
The move walks back a controversial July order from Tanzania that threatened to lock non-citizens out of 15 business categories, creating massive uncertainty for Kenyan entrepreneurs operating across the border. For the thriving ecosystem of startups and SMEs that depend on the Tanzanian market, this is a huge sigh of relief.
Here’s what’s changing, effective immediately:
- Road Tolls Scrapped: That costly $10 per 100 kilometers road toll for cargo? It’s gone. This is a direct cost saving for anyone moving hardware, goods, or installation teams between the two countries.
- Seed Restrictions Lifted: A major win for agritech. Certified seeds can now move freely, a boon for distributors and logistics firms building the future of farming.
- Insurance Headaches Resolved: The long-standing COMESA insurance dispute is settled, meaning traders no longer need to worry about duplicative coverage costs.
- No More Stamp Duty on Exports: Locally produced goods, like beer from Tanzania, can now enter Kenya without the extra tax, setting a precedent for other manufactured products.
This isn’t just about beer and seeds. The original Tanzanian directive targeted the very heart of the modern service economy: ICT services, phone repair shops, mobile money kiosks, and even tour guides. These are the businesses that form the backbone of cross-border digital commerce. The new carve-out for legally licensed Kenyan firms restores confidence and yanks away the risk of a sudden shutdown.
“No Kenyan business has been affected and will not be in future,” assured Kenya’s EAC Affairs PS, Caroline Karugu. Her Tanzanian counterpart, PS Hashil Abdallah, confirmed the reforms would be cemented in a formal memorandum of understanding.
The Bigger Picture: Keeping Digital and Physical Borders Open
This deal is about more than just bureaucracy. It’s a recognition that commerce in East Africa is increasingly digital. Fintech platforms, mobile money networks like Airtel Money, and card payments are weaving the region’s markets together. When policy keeps up with the tech, small businesses thrive.
The move also complements Kenya’s progressive mobility policies, including its visa-free travel for all African citizens. When people can move easily for business trips and the rules for operating that business are clear and stable, everyone wins.
What Kenyan Businesses Should Do Now
While the immediate threat is gone, this is a clear signal that being prepared is non-negotiable.
- Get Your Paperwork Perfect: Make sure your business licenses, tax filings, and any sector-specific permits are up-to-date and easily accessible.
- Display Your Compliance: Keep digital and physical copies of your licenses at your business site. Train your staff on what to show officials if they ask.
- Go Digital with Payments: Ditch the cash-handling risk. Adopting digital invoicing and cross-border payment systems makes settlement faster and more secure, insulating you from policy shifts.
- Stay Plugged In: Ten other trade barriers are on the chopping block between now and March 2026. Keep in touch with your industry association to track progress and flag any new issues that pop up.
