The Tanzanian government has passed legislation restricting foreigners from operating small-scale businesses, such as hairdressers, restaurants and neighbourhood shops. The provision aims to encourage the participation of local entrepreneurs and protect the national economic fabric from foreign competition.
The measure, contained in an order published at the end of July, specifies a list of activities reserved for Tanzanians only. It ranges from retail trade and mobile phone repair to tourist guide services and beauty salons outside the hotel sector.
The authorities justify this decision as part of a strategy to combat unemployment and strengthen the role of citizens in the country's economic growth. They also hope that local control of these businesses will lead to a more equitable distribution of benefits.
Foreigners already engaged in activities covered by the ban will be able to continue operating until their existing licences expire. However, the renewal of these permits and the opening of new businesses in the affected sectors will not be allowed.
Non-compliance carries financial penalties and prison sentences, as well as the possible revocation of visas or residence permits for those who violate the restriction. Tanzanians acting as front men for foreign companies will also face penalties.
While the provision has been welcomed by local business associations, some analysts fear it will reduce the country's attractiveness for foreign investment in other areas by creating uncertainty about future regulatory constraints.
Source: thecitizen.co.tz; theeastafrican.co.ke