Multinational professional services firm Ernst & Young published their latest Africa Attractiveness report highlighting the attractiveness for foreign direct investment (FDI) of the continent.
The new report showed the East African region led in the attraction of FDI. The company came to a conclusion based on the number of projects registered in the country.
Accounting for 27 percent of the continent’s FDI, East African Community registered 197 projects, making it the single largest beneficiary of FDI. Major projects undertaken were in the field of infrastructure, manufacturing and power generation. They are among the main attractive sectors in the economies that have pushed growth and development of nations, creating employment opportunities as well.
The report ranked Kenya and Ethiopia top performers in the East African region, as they continue to gain more competitive grounds in the business sector. In 2016, Kenya ranked top investment hub in East Africa, but with Ethiopia being Africa’s fastest growing economy with forecast average growth rate of 8.5 percent in 2018, the Horn of Africa country is shifting tides.
Despite having tough times during the election period that saw many businesses close down and foreign investors withdrawing from the market, Kenya bounced back to compete in the region. The new governance has picked up well. According to the latest 2018 Mo Ibrahim governance index, Kenya scored an upward trend +7.0 in creating a conducive business environment with Rwanda emerging top with an upward trend +9.5 score.
East African governments continue to implement their business strategies to better their business environments to lure more businesses as well as support both the local and international investors. More focus on increasing ranks on ease of doing business has been emphasized to as well increase global competitive rankings.
Last year, FDI inflow to Tanzania reached $1.18 billion, which was a 13 percent decrease as compared to 2016 but continues to be an attractive investment destination with business incentives and opportunities.