Favourable business environment draws foreign investors to region
Posted Saturday, January 23 2016 at 16:11
- World Bank report says the region received more than half of new investments in sub-Saharan Africa last year.
- Kenya and Uganda remained the highest FDI recipients in the region, and among the top 10 in Africa in 2015.
Foreign direct investments in East Africa increased last year, buoyed by the reduced cost of doing business and natural resource discoveries.
The region received more than half of new investments in sub-Saharan Africa in 2015, according to the World Bank’s Migration and Remittances Factbook 2016.
Last year, remittances to the EAC hit $3.054 billion, up from $2.9 billion in 2014. This was about 0.5 per cent of the global inflows of $601 billion, up from 0.4 per cent of $593.9 billion in 2014.
The region received 8.7 per cent of $34.8 billion invested in sub-Saharan Africa in 2015, up from 8.4 per cent of $34.5 billion the previous year.
According to Scholastica Odhiambo a lecturer at the School of Business and Economics at Maseno University, the EAC has improved in the ease of doing business rankings, making it easier for investors to set up businesses in its member countries.
“The number of procedures and processes of setting up a company has come down, and this is encouraging investors to set up businesses in the region,” said Ms Odhiambo.
“The skilled human resource base in Kenya and Uganda is a contributing factor to the increased FDI, because they adapt easily to new innovations,” she added.
Kenya and Uganda remained the highest FDI recipients in the region, and among the top 10 in Africa in 2015.
Kenya came in at position four in remittance recipients in Africa in 2015, behind Nigeria, Ghana and Senegal, and Uganda was at position six after South Africa, and ahead of Mali, Ethiopia, Liberia and Sudan.
Kenya received $1.6 billion in remittances in 2015, while Uganda’s remittance for 2015 were $900 million. Tanzania, Rwanda and Burundi received $400 million, $130 million, and $50 million respectively.
The World Bank’s Ease of Doing Business 2015 report showed that the EAC has improved its business regulatory reforms, the ease of credit access, administration procedures for starting business, and infrastructure reforms for investors.