East Africa’s tax and forex hurdles weigh on private capital injections
East Africa’s private capital boom is being held back by fragmented tax regimes and FX restrictions, despite billions flowing into the region’s growing investment market.
East Africa’s fragmented tax regimes and foreign exchange restrictions are obstructing private capital flows, even as investors injected $4.1 billion into nearly 500 deals between 2021 and 2025, according to a new survey by the African Private Capital Association.
The report, Private Capital Activity in East Africa (May 2026), notes that capital market reforms and forex liberalisation in Kenya, Ethiopia and Tanzania are improving governance, entry visibility and exit execution, while reducing longstanding investment constraints. At the regional level, integration efforts are gradually lowering transaction costs and enhancing deal execution efficiency.
