Africa

27 September 2019

Reasons Why East Africa is The Most Preferred Investment Destination in The Continent

As much as Africa, in general, is a gold mine for investors because of its rich resources, some regions and industries are more favorable than others. East Africa, for instance, is one of the most favorable investment destinations in the continent. This explains why many multinational companies are rushing there. East Africa, which consists mainly of five countries, is rich in natural resources and has the right population size to create a ripe market. Some of the reasons why you should consider East Africa as an investor include:

Technology adoption

In the whole of sub-Saharan Africa, East Africa is one of the most tech-savvy areas. In comparison to West Africa, for example, the eastern region has made big strides in this regard. The young generation is at the forefront of using technology to solve the problems they are facing. East Africa is particularly known for MPESA, which is a mobile financial service allowing for banking and transferring money. 

Adaptacja technologii

There are also many technology and innovation hubs in the region that boost its overall growth. The latest technology trends such as blockchain are also embraced in the region. Technology has created many investment opportunities across different industries.  

Rich resources

The region boasts of rich, diverse resources some which are unexplored. Uganda and Kenya have made discoveries of oil which have got large corporations like Total interested. In addition to that, there are large deposits of natural gas in Tanzania. 

Surowce w Afryce

There are also diamonds in Tanzania, as well as gold and limestone in Kenya. Other riches of the region include coal and gemstones. This makes it an exciting frontier for mining, which is a great investment opportunity.

Quality human resources

East Africa is one of the regions that has a big pool of well-educated individuals. They are not only qualified and skilled but they’re also aggressive, determined and go-getters. There is a large number of graduates and a growing number of higher learning institutions. 

Kapitał ludzki

There is also a big chunk of people who go to study in the diaspora and come back home to give back to the society, contributing to an even larger pool of educated folks. 

Developed infrastructure

Granted the infrastructure is not there yet according to top standards, there’s a lot of development going on in this area still. The roads, rail, and ports have seen a lot of growth. For example, there is the standard gauge railway project in Kenya which will connect different towns and go all the way to Uganda. 

Infrastruktura w Afryce

Then, there’s the mega infrastructure project dubbed LAPSSET (Lamu Port, South Sudan, Ethiopia Transport Corridor). It’s a project that brings together Kenya, Ethiopia, and South Sudan through seven infrastructure projects revolving around roads, port, and oil. 

When it comes to energy and telecommunication, there are a lot of developments too. The region is seeing an increased spread of access to electricity in remote villages, and an increase in solar energy adoption. When it comes to telecommunication, up to 90% of the entire population have mobile phones and up to 70% of the population have Internet access. 

Political stability and friendly policies

As much as many political issues in the region have hindered its development, the circumstances have finally changed for the better. Previously, there were cases of violence, tribal clashes, and terrorism but the situation has improved a lot. Democracy has been on the rise, which has upgraded the political climate.

Sytuacja polityczna

Many policies are being implemented in the very investor-friendly region. Many barriers to entry have been broken, making it easy to penetrate the market. This is mainly in a bid to attract foreign investors and that is why the Chinese are taking advantage of the trend. Most of the big projects, especially those related to the infrastructure, are being carried out by foreign companies.

Rise of the middle class

In East Africa, there is a rise of the middle class which means there is a market for consumers. This explains why there are many multinationals and big retailers such as Carrefour making it into the market. There are also many Chinese who are taking advantage of the rise of the middle class.

Klasa średnia w Afryce

Conclusion

East Africa is a region definitely worth considering if you are looking to expand your business. As mentioned earlier, there is diversity of investment opportunities, as there are different industries you can explore. Please see here to learn more about the startup ecosystem in the region. Just be sure to do your research first so that you have all the facts straight before moving forward. Feel free to contact us if you require any assistance or consultancy in all-things East Africa.



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