Kenya topples India, China as major investor in East Africa
| May 6th 2013 | 2 min read
|Retail chain Uchumi is among the major Kenyan investors in the East African region. [PHOTO: FILE]|
By James Anyanzwa
kenya: Even as the influence of China and India continues to reverberate across the East African region, it has emerged that Kenya has toppled the Asian powerhouses in terms of investment in the region.
According to TradeMark East Africa, the publishers — in collaboration with the World Bank — of the Doing Business Report, Kenya is a major a force to reckon with in the region, with investments in the financial, retail and agro-processing sectors.
“Investments from China and India are picking up quite significantly, but the bulk of the investment in East Africa is still from the United States and Europe,” TradeMark Chief Executive Frank Matsaert told The Standard last week. “However, aside from them, Kenya is the biggest investor ... it is a real force in terms of investment and development.”
The integration of East African countries saw the launch of a common market in July 2010, opening up trade between the five member states.
Several Kenyan banks — such as Kenya Commercial Bank (KCB), Equity Bank and Cooperative Bank — have expanded operations across the region, while retail chains Nakumatt and Uchumi are scouting for more opportunities.
Uchumi has a presence in Uganda and Tanzania, while Nakumatt has stores in Uganda, Tanzania and Rwanda.
Matsaert also underscored the huge investment potential in the innovation and services industry within the East African Community.
The region is a top destination for dealmakers who are being drawn in by the improved business environment and discovery of commercially viable oil and gas deposits in Uganda, Kenya and Tanzania.
Further, business confidence and consumer demand saw inflows from private equity (PE) funds into the region double from 2011 to hit US$475 million (Sh39.76 billion) last year.
A sharp rise is projected in 2013 as perceptions of politic al risk soften, according to consultancy firm Deloitte & Touche East Africa.
Kenya secured the largest number of PE deals in East Africa last year, particularly in the small and medium enterprises sector, with fund executives citing Tanzania and Ethiopia as the other countries in the region they are most confident about.
China’s success in Africa and its recent expansion of operations into the Middle East and Latin America, has led some US lawmakers and business leaders to warn that this is undermining America’s objectives and influence in a region riding high on an oil and gas bonanza.
Reported figures show that oil and coal accounted for 50 per cent of China’s imports from Africa in 2012.
The natural gas boom in the East African region could transform it into an energy powerhouse well placed to reach energy-hungry China, Japan and India.
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