East Africa FDIs inflows up by Sh690 billion

Dar es Salaam. Inflows of Foreign Direct Investments (FDIs) to East Africa increased by $301 million last year, compared with the previous year, the United Nations Conference on Trade and Development (Unctad), has reported.

Unctad’s World Investment Report for 2019 shows that the EAC regional FDI inflows went up to $8,966 million in 2018 from $8,665 million in 2017.

The increase has also pushed up the stocks of regional FDI inflows in 2018 to $91.5 billion, up from $83.1 billion in 2017.

According to the report, the ouflows of FDIs stock from the region rose to $3.5 billion in 2018, from $2.9 billion in 2017.

“The growing number of special economic zones (SEZs) could become another factor in drawing investments to the African continent in the coming years, says the report. Also, growing demand for some commodities and a corresponding rise in their prices as well as the growth in non-resource-seeking investment in a few economies underpinned the rise, says the Unctad report. The report also shows that each EAC member country - with the exception of South Sudan, which is not featured in the report - reported positive gains in FDI inflows last year, compared with 2017. FDI inflows to Tanzania rose to $1.1 billion, from $938 million - but was less than the $1.5 billion FDI recorded in 2015.

This was equivalent to 5.5 per cent of the gross capital formation in 2018, compared with the five per cent reported in 2017.

The improvement increased the country’s FDIs stock to $20.7 billion last year, from $19.6 billion in 2017.

FDI inflows to Kenya swelled by 27 per cent, to $1.6 billion from $1.2, due to investment in diverse sectors, including manufacturing, hospitality, chemicals, oil and gas. This also increased the country’s stocks to $14.92 billion in 2018, up from $12.79 billion in 2017.

Ethiopia topped the region, even as inflows to the country declined by 18 per cent, to $3.3 billion from $4 billion while inwards FDIs stocks gained to $22.2 billion, from $18.9 billion.

The report shows that Rwanda also registered an increase in FDI inflows to $398 million from $356 million while the stock gained to $2.2 billion, from $1.9 billion. Burundi, which did not record any inwards FDIs in 2017, recorded $1 million in 2018 - which pushed up the stock to $243 million from $242 million in the previous year.