6 January 2014

East Africa: Uganda and Tanzania Attract Highest FDI in EA

Buoyed by vast energy resources, Uganda and Tanzania attracted the most foreign direct investment in 2012 in the East African region, according to the State of East Africa 2013 report.

"East Africa attracted foreign direct investment (FDI) inflows of $3.9b in 2012, a $1.8b increase from $2.6b in 2011. With a combined total inflow of $3.4 billion, the two main energy rich countries of Uganda and Tanzania received 90% of the investment inflows into the region," the report said.

Rwanda recorded an increase of $54 million in FDI, while Kenya's shrank by $76 million during the period and Burundi continued to receive modest investment inflows.

Though the report says that the focus on the extractives sector has the possibility of overshadowing other investments into East Africa, investments in healthcare, financial services and the production of cement were recorded in 2012.

The health sector seems to be attracting Indian investment in medical facilities such as the recently announced $40 million project in Rwanda by the Madras Institute of Orthopedics and Traumatology, according to the report.

The $69 million acquisition of Cimerwa (Rwanda) by Pretoria Portland Cement (South Africa) was the second largest merger and acquisition made in a developing country in 2012.

Earlier this month, Deloitte released its African Construction Trends Report 2013 that shared similar insights. It said that the recent discoveries of oil and gas in East Africa are attracting foreign investments that are boosting infrastructural developments in the East African region.

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