The recent natural resource discoveries have led to an increase in Foreign Direct Investments (FDI) inflows to East Africa with Uganda in the lead.
New data released by the United Nations Conference on Trade and Development (UNCTAD) shows Uganda topped the region in attracting FDI last year, followed closely by Tanzania, on the back of increased investments in the oil and gas sector.
According to Tanzania Daily News, this includes investments in gas reserves in Tanzania and oil fields in Uganda.
FDI to each of the two countries was seven times larger than what Kenya received in 2012, a lag analysts blamed on heightened political tensions and delays in removing cumbersome licensing procedures.
According to UNCTAD, Uganda’s FDI jumped by 92.51 percent to $ 1.721 billion from $ 894 million in 2011, while Tanzania attracted $ 1.706 billion in 2012, a 38.81 percent increase from the previous year’s $ 1.229 billion. On the other hand, Kenya’s FDIs dropped by 27.04 percent to $ 259 million from $ 355 million.
Rwanda’s rose by 50.94 percent to $ 160 million last year from $ 106 million, while Burundi, which lagged the five East African countries, attracted $ 1 million, a 66.67 percent decrease from $ 3 million in 2011. The EAC countries received a combined $ 3.9 billion in FDIs last year, a 48.71 percent rise from the $ 2.6 billion registered in 2011.
Interest in the EAC economies among foreign investors is expected to gain fresh impetus in the remaining part of the year, helped by rising confidence in the economy, said UNCTAD in the World Investment Report 2013.