Rwanda and Kenya are the most competitive economies in east Africa and are among the top 10 most competitive economies in Africa at position three and six respectively.

According to the newly released Global Competitiveness Report, Tanzania and Uganda follow in at positions 17 and 18 in Africa respectively while Burundi ranks last in the region and among the bottom four on the continent at position 29.

Of the 144 economies assessed, the EAC countries save for Burundi improved on their economic productivity and prosperity moving up their competitiveness rankings from last year.

Uganda emerged as the most improved economy moving up nine places from last year to position 122, followed by Kenya which moved up six places to 90th position while Rwanda and Tanzania moved up four places up to position 62 and 122 respectively.

Burundi remained among the five least competitive economies in Africa and globally at position 138.

The report says east Africa's economic improvement has been driven by overall better infrastructure, macroeconomic environment, health and primary education, goods market and labour market efficiency and innovation.

However, despite this improvement, corruption, access to finance and political instability remain the most problematic issues affecting doing business in the region.

READ: Region’s markets remain protectively closed, hamper manufacturing sector

The report defines competitiveness as the set of institutions, policies, and factors that determine the level of productivity of a country. A more competitive economy is one that is likely to sustain growth.

Increased foreign investment

The highlights come at the time when Institute of Chartered Accountants in England and Wales (ICAEW) report indicates that the East Africa’s inflows of Foreign Direct Investment (FDI) increase by 11 per cent in the third quarter of the year.

According to the (ICAEW report, drawing on estimates prepared by the World Bank, the total level of external financial inflows into Africa has increased from $40.4billion in 2000 to $192billion in 2013. This is largely attributed to the inward FDI from China with investment mainly going into primary resource sectors and infrastructure.

Kigali, for example, is helped by Rwanda’s performance in the ‘Ease of Doing Business’ metric, with the World Bank ranking it as a better place to set up a business than Italy.

“For Rwanda, the ranking is a result of extensive efforts by government to continuously improve the business environment. As we move towards becoming a middle income country, we will work even harder to develop a more sustainable and competitive economy that will benefit all Rwandans,” said Francis Gatare, Chief Executive Officer of the Rwanda Development

Kampala, meanwhile, benefits from strong demographics as it enjoys a relatively youthful population and favourable rates of demographic growth.

Nairobi tops the list as Africa’s most attractive destination for FDI. This is in big part because of a reportedly growing middle class that is setting the stage for a booming consumer market.