Ten Reasons to Invest in East Africa

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By Candice Ungerer and Jarmila Sarda Souckova

East Africa presents untapped opportunities for investment outside of the traditional mining and resources sectors. According to UNCTAD’s World Investment Report 2017, foreign direct investment across a diverse range of sectors is growing as foreign businesses realise the potential returns on investment in the region. Here are our top 10 reasons why investors should be considering East Africa:

  1. It the one region where first-mover advantages can still be found, and this is true across several different sectors. Businesses who seize this opportunity can reap the rewards of strong brand recognition and customer loyalty before competitors enter the market.
  2. East Africa enjoys ample arable land, which, given the right inputs, can be used to increase agricultural production on the continent.
  3. In manufacturing, many East African countries offer favourable business environments and tax incentives to foreign investors. For example, Kenya, Tanzania, Uganda and Ethiopia all have special economic zones for foreign investors and exporters. While Rwanda offers a corporate tax break for seven years for companies in certain sectors.
  4. In services, significant public investment has been made toward improving ICT infrastructure in some countries; potentially creating an attractive hub for IT enabled services.
  5. East Africa offers a young and growing workforce with competitive wage rates. Over 20% of the population is aged between 15 and 24, some skilled and with varying levels of education.
  6. Recent integration efforts through the region-wide COMESA-EAC-SADC[1] tripartite Free Trade Area Agreement opens the door to a market of over 600 million people in countries experiencing robust economic growth.
  7. Exporters based in East Africa enjoy favourable access to international markets such as the United States through AGOA, the European Union through ACP-Cotonau Agreement, and India through the utilisation of its Duty Free Tariff Preference Scheme for LDCs.
  8. Investment can be transformational in the lives of the individuals involved. The right investment can create sustainable local employment, and even better income opportunities.
  9. Investment is a proven way of enabling countries to shift to higher value added products and introduce new technologies. This is vital for countries that are still too reliant on a limited basket of commodity exports. And this shift is what is needed to enable sustainable economic development.
  10. The risks of investing in Africa are often overstated and many can be mitigated. With some of the fastest growing economies in the world, East Africa offers the potential for generous returns.

There are few places in the world left where the intrepid entrepreneur can bring value but at the same time enjoy long- term business growth if they are persistent, patient, creative and determined. Africa is still such a place. Don’t miss the boat!

SITA prioritises investments that are transformational in the lives of the individuals involved. Through investment, SITA aims to create sustainable local employment, where higher value-add links in the supply chain are maintained within target countries.

Are you interested in investing in Kenya, Ethiopia, Tanzania, Uganda or Rwanda?  Contact Jarmila at jsarda@intracen.org

[1] Common Market for Eastern and Southern Africa (COMESA), Southern African Development Community (SADC) and East African Community (EAC)

Voices of SITA
Voices of SITA

This blog provides a window into the SITA project. Through stories from India, Ethiopia, Kenya, Rwanda, Uganda and the United Republic of Tanzania, this blog showcases the project’s progress and impact.