Dar es Salaam. A strong call for deeper economic integration between Tanzania and Kenya dominated discussions at the Tanzania–Kenya Business Forum 2026, as leaders from government and the private sector pressed for a shift from rivalry to collaboration.
The forum, held at the Julius Nyerere International Conference Centre(JNICC), comes just ahead of the Kenyan president’s two-day state visit to Tanzania, setting the tone for renewed bilateral engagement focused on trade, investment, and regional competitiveness.
At the center of the morning session was Tanzania’s Minister of State for Planning and Investment, Prof. Kitila Mkumbo, who argued that the two neighboring economies are underperforming not due to a lack of opportunity, but because they have failed to fully exploit it.
“Intra-regional trade is still far below its potential,” Prof. Mkumbo said. “The opportunity is already here, but we are not capturing it. Our future lies not in competing against each other, but in complementing each other.”
He warned that duplication of efforts between the two countries risks fragmenting markets and weakening their global competitiveness. Instead, he proposed a model built on specialization and integration—one that leverages each country’s comparative strengths.
A case for complementarity
Prof. Mkumbo pointed to logistics as a prime example. Tanzania’s ports, including Dar es Salaam and the planned Bagamoyo facility, serve southern and central corridors, while Kenya’s Port of Mombasa anchors the northern trade route.
“There is no real competition between these ports,” he noted. “They are complementary gateways that, if aligned, can position the region as a major logistics hub.”
Similar opportunities exist in energy, agriculture, and the digital economy. Tanzania’s natural gas reserves could pair with Kenya’s advances in renewable energy to support cross-border power trade. In agriculture, Tanzania’s vast arable land could connect with Kenya’s strong agro-processing and export networks to build regional value chains.
In the digital space, Kenya’s leadership in fintech innovation combined with Tanzania’s rapidly expanding user base could help scale a unified digital market across borders.
Private sector takes the lead
The forum also highlighted the growing role of the private sector in driving integration. Tanzanian businessman Rostam Aziz called for the creation of a “single commercial system” spanning both countries.
“A system that can compete at a scale to attract capital to serve the region and global market,” he said.
“We need to harmonize our public-private partnerships (PPPs) and identify a few projects that can make a difference. Once we achieve that, we can also align our capital markets. We can issue bonds, attract individual investors, and launch IPOs—steps that could significantly transform the infrastructure of our two countries,” added Rostam.
Rostam stressed that rising global debt levels are limiting government spending capacity, making private sector participation more critical than ever. He suggested joint infrastructure financing through bonds, initial public offerings, and cross-border investments as pathways to unlocking growth.
Rethinking incentives
Adding to the debate, Eric Ruto of the Kenyan National Chamber of Commerce and Industry challenged the effectiveness of traditional tax-based incentives in attracting investors.
“Fiscal incentives alone are not enough,” he said. “What investors need are commercial incentives—access to larger markets, economies of scale, and seamless cross-border operations.”
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He argued that opening borders and integrating markets would make it more viable for businesses to establish operations that serve both countries, rather than treating them as separate, limited markets.
Untapped potential
Both Tanzania and Kenya are members of the East African Community, yet they also belong to different regional blocs—Kenya to COMESA and Tanzania to SADC—a factor that has sometimes complicated deeper integration.
Despite Kenya ranking among Tanzania’s top sources of foreign direct investment, with an estimated stock of $826.6 million by 2024, trade volumes between the two countries remain modest. Bilateral trade reached approximately TZS 2.2 trillion in 2024/25, with a near balance between imports and exports.
As discussions concluded, a clear message emerged: the path forward may lie not in competing for the same opportunities, but in combining their strengths to create a larger, more competitive economic bloc—one capable of attracting global capital and driving sustainable growth across East Africa.
