Investing in East Africa 101: Eight things investors should know

  

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5. Policies

The region has adopted a pro-foreign investment policy. The economic blueprints of the individual countries support public-private partnerships (PPPs). Most of the capital intensive projects, especially in infrastructure and telecommunications are to be financed and implemented by foreign firms. This is one of the reasons why China’s investment in the region has grown rapidly. Each of the countries has been active in fostering relations with other governments in a bid to encourage foreign direct investments.

6. Human resources

The East African region has a relatively large pool of qualified, skilled professionals. In recent years there has been a proliferation of higher learning institutions – widening access and increasing the number of graduates. The Diaspora community, which has been relocating back home, has also enriched the mix with more skills and experience.

7. Bureaucracy

Although the World Bank’s Doing Business reports have shown impressive implementation of reforms in Rwanda, other countries have been slower.

“Licensing is very straightforward. There is no issue getting a licence. The only problem is when you have expatriates; work permits and customs clearance can be cumbersome. Importing human resources can be problematic,” says Tim Smyth, chief executive officer of TBWA East Africa, an international advertising group.

The most recent Doing Business in the East African Community report shows that over the past seven years, the five EAC states implemented a total of 62 regulatory reforms, improving the business environment for local entrepreneurs. More reforms are needed though.

8. Consumerism

The rapid growth of the middle class in East Africa has propelled retailers like Nakumatt and producers of fast-moving consumer goods such as Unilever and Haco Tiger Brands to regional success.

Successful brands such as coffee shop chains Nairobi Java House and Dormans in Kenya, and Dutch bakery Bbrood in Uganda, as well as the recent entry of fast food chain KFC, attest to the many opportunities in the region. Chinese phone manufacturers and players in the pay television market are also hoping to cash in on the middle class boom.

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