Why EAC attracts fewer foreign investments

Monday February 5 2018

A new index indicates that there has been no

A new index indicates that there has been no significant growth in FDI to the region. FILE PHOTO | NATION 

By NJIRAINI MUCHIRA
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East Africa’s position as a frontier for foreign direct investment (FDI) is not guaranteed after countries in the region performed poorly in a global ranking for countries with high growth prospects.

A new index shows that countries in the region rank poorly on key parameters that at the core of attracting investors.

According to the Growth Promise Indicators (GPI) index by audit firm KPMG, at $7.5 billion in FDI in 2016, the region recorded just 4.2 per cent growth from 2015. A huge chunk of the inflows came from China.

Ranking

In East Africa, only Rwanda appears in the top 100 countries. The country is ranked position 69 in the index that gauges future growth promise based on macroeconomic stability, openness, infrastructure, human capital and institutional strength.

Kenya is ranked at position 112, Uganda 134, Tanzania 135 and Burundi at 168. War-torn South Sudan is the worst performing globally, at position 181.
African nations on the top 100 list are Namibia at 76, Morocco at 79, Tunisia at 85 and South Africa at 87.