Foreign Direct Investments (FDIs) into East Africa surged in 2019 to hit $11.5 billion, up from $5.7 billion in 2018. This was mainly due to China’s increased interest in East Africa’s construction, manufacturing, and services sector.
According to EAC’s Trade and Investment Report (2019), all East African Community countries except Tanzania posted increased inflows during the year. Inflows to Tanzania declined by 16% to $2.6 billion in 2019 from $3.1 billion.
The report shows that China was the largest investor in 2019, accounting for 59.7% of the total FDI inflows into the region, with significant realized investments in construction, manufacturing, and services.
Inflows to Uganda increased by almost 20%, mainly on account of investments in the extractives sector and major infrastructure projects like power dams and roads.
Inflows to Kenya were mainly directed into the information, communication and technology, and healthcare sectors.
According to the report, the number of jobs created due to FDI inflows into EAC increased by 134.9% to 211,084 jobs in 2019 from 89,877 in 2018.
FDI to Uganda contributed 62,876 jobs (18.2%) of total jobs created, while FDI into Tanzania created 46,765 jobs accounting for 47.9% of the total jobs created.
FDI inflows into Rwanda created 35,715 jobs accounting for 18.7% of total jobs created, while FDI inflows into Kenya created 16,573 jobs accounting for 10.4% of total jobs created.
In Burundi and South Sudan, inflows accounted for 2.2% and 2.6% of the total jobs created, respectively.
Rwanda’s total investment inflows increased 22.6%, reaching $2.46 billion compared to $2 billion in 2018, mainly due to domestic investments, which moved to $ 992.11 in 2019 from $991.1 million in 2018.
Domestic investments also accounted for 40.3%, while FDIs contributed 59.7% of total investments.
South Sudan registered total investments amounting to $3.87 billion in 2019, with foreign investments from the rest of the world amounting to $2.78 billion. The bulk of the foreign investments was geared towards the utilities and services sectors.
In Tanzania, total registered foreign investments declined by 15.9% to $2.62 billion in 2019 from $3.12 billion in 2018, with EAC investment excluding Tanzania accounting for 0.7% of the total investment flows of $18.7 million.
Investment flows from the rest of the world amounted to $2.6 billion in 2019 compared to $767 million in 2018.
In Uganda, total investment flows into the country increased by 22.2% to $1.24 billion in 2019 from $1.01 billion in 2018, of which $433 million were domestic investments.
This increase was attributed to reforms in the licensing system after introducing the e-Biz system of project licensing and increased provision of incentives and facilities for investors, including the Namanve Industrial Park.