Investment Opportunity in East Africa
The East African Region is one blessed with abundant resources and potentials ranging from agriculture, mining, energy and tourism with each providing investment opportunities. With a population of more than 130 million people, the region boasts of one of the largest single-bloc regional markets in Africa. In a bid to harness these potentials, the five partner states of the East Africa Community came together and agreed to co-operate in the areas of industrial development and investment.
This co-operation tends to rationalize investments and use of industries to promote efficiency in production thereby promoting the community as a single investment area. Also, there is an incentive for businesses and investors in the region as the East Africa Community have duty-free access to the US market under the African Growth and Opportunity Act (AGOA) and EU’s Everything but Arms (EBA) initiative where all products from Less Developed Countries have preferential access to the EU market except for products like arms and ammunition. All these makes the region an investment hub for investors and to further address this issue, we will look at the investment opportunities in two East Africa state namely Kenya and Uganda.
Investment opportunity in Kenya
Kenya in East Africa is the largest economy in the region and has a stable political system in Africa. Having many steps geared towards the increase in the ease of doing business, the country; when it comes to investment has always being open to both local and foreign investment. Kenya’s Mission 2030 which promises to make the country an industrialized nation and quality of life to its citizens by 2030 was as a result of the government partnership with the private sector, development partners, stakeholders and civil societies. This has seen many investors venturing into the country’s economy thus making her the hub of east Africa. The country has steady economic growth in recent times which can be attributed to massive investments in infrastructure and jobs.
Also, the economy is being driven by agriculture to equally include tourism, mining and trade and this have lead to the discovering of natural resources like gold, oil, rare minerals in the state. Certain sectors in the country pose investment opportunities that can help transform the state into an industrialized state. They include:
The country’s economy is highly depended on the agriculture sector making up 26% of the GDP of the country. It equally account for 65% of the country’s total export and accounts for 70% of informal employment among rural dealers. Available opportunities in the sector include food processing, irrigation, technological infrastructure and transport.
Information Communication Technology (ICT)
The ICT sector is growing every day in Kenya. Investors can tap on the growing population to provide communication outlets and modern technology such as mobile phone services. Provision of Internet connectivity will enhance economic growth in Kenya. Kenya is also host to regional offices for the world’s biggest technology companies including Microsoft, Google, Cisco, Oracle, IBM and SAP.The size of the local ICT market is estimated at US$ 500 million.
This is one of the country’s leading foreign exchange earners being the third highest contributor to GDP in the country. Due to liberalization, diversification of the tourist market together with government contribution, the sector has been growing on a fast pace. Investors and businesses can take advantage of the unique attractions in the country like the coastal beaches, coral reefs, caves etc. The y can equally take advantage of various programmes by the government aimed at attracting investing into the industry.
This sector mainly agro-based play a critical role in value addition to agric products by turning raw material into finished goods. There is a diversion to manufacturing for export as the country’s main objective of industry policy since it aims to raise the share of products in the local market and develop goods for new or old markets.
The country value special economic zones and are member to two regional economic blocs namely: East Africa Community and Common Market for East and Southern Africa in a bid to creating investment opportunities, economic growth and development in the country. Opportunities for investment in this sector is evident in the iron and steel industries, fertilizer production, machinery, automobile assembly, garment manufacturing etc either as a direct or joint venture investment.
Investment Opportunity in Uganda
Investment stories in East Africa are not something new as there is an increase in the number of investors and foreign businesses entering the region. East Africa country like Uganda is not left out as it is now becoming a major destination for both local and international investment. This is evidently shown in the report by the United Nations Conference on trade and Development where the country had the highest inflow of foreign direct investment in the past three years.
The country is home to 45.71 million people making it the 6th largest in terms of population in sub-Saharan Africa. The country have energy potentials with the recent being the discovery of 3.5 billion barrels of oil off Lake Albert. It is due to this that the country’s FDI is increasing implying investment opportunities for both local and most especially foreign investors.
With the oil boom in the country, the construction sector is sure to benefit a lot with the building of accommodation like hotels and guest house which investors can really tap into since it is very limited in the country. The real estate sector also has the upper hand due to the housing deficit in the country and will remain as the population increases. Therefore, investors can gain from real estate as well as provision of hotel accommodation.
The demand for agricultural product like fisheries is on the increase and this requires great investment if such demand will be met both in quality and quantity. Increase in urban area and growth in the country’s population means the increase in the demand for foodstuffs, can foods and beverages etc.