Kenya

Kenya is Africa’s 7th most populous country. It has a liberalised economy characterised by a well-educated and entrepreneurial human resource, with Nairobi being regional headquarters for a number of multinational businesses and organisations with an interest in the region.

With limited natural resources and arable land for agriculture (despite its top export being tea), Kenya has a reasonably well developed manufacturing sector, but is transforming in to a service based economy becoming a global pioneer in many areas of IT and fintech on top of its already existing status as a leading tourist destination on the continent.

In a nod to Silicon Valley, Kenya is regarded as “Silicon Savannah” and its capital, Nairobi is developing in to a megalopolis with ambitions of competing on a global level. It was recently named as the best city to live in Africa and 12th best city globally by InterNations Expat City Ranking 2021 with some of its bars and restaurants occasionally creeping on to World’s Best lists.

Nairobi has already attracted a multitude of Tier 1 multinational companies to support this growth with a shift in culture towards a western style convenience and speed-focused service economy and the different type of investment opportunities this brings in different areas of the economy and supply chain compared to other locations in the region.

Despite these developments, there are challenges in the country around corruption and occasional security concerns which have reduced over the last few years as well as other risks that businesses and organisations need to be able to navigate.

Stakeholders may wish to understand more about the implications of any changes happening in the country since the change of government in August 2022.

Malawi

Malawi (classified by the UN as East Africa), known as “The Warm Heart of Africa”, was named The Economist’s Country of the Year in 2020 after its judiciary overturned the results of a rigged election proving it was an oasis of laws, sensibility, justice and democracy on a continent and a world where many of these tenets are backsliding.

All eyes are on Malawi to see what progress can be made after moving out of the best part of the last two decades under the rule of the Mutharika family.

Malawi is by far the most underdeveloped country among our focus countries. It is characterised by high population density and a scarcity of natural resources.

The country’s main export is tobacco, with demand on the decline globally.

Despite a high population density and limited available arable land, Malawi is among the world’s lowest cost producers for a number of agricultural crops.

Malawi was named as one of Lonely Planet’s Top 10 Countries to Visit in 2022.

Malawi is crying out for new foreign direct investment to help the country’s development and as democracies are more likely to trade with and attract investment from other democracies, Malawi is open for business.

Particular challenges that present both obstacles and opportunities are Malawi’s forex challenges, climate vulnerability, food security and importation of vital commdoties such as fertiliser, fuel and maize.

Rwanda

Rwanda is a remarkable economic success story. It has bounced back considerably since its genocide 30 years ago and is now renowned as among the cleanest and safest countries on the continent.

Rwanda, known as “The Land of a Thousand Hills” is modelling its success on Singapore and trying to become a hub for trade and services in Africa, leveraging its strategic central position on the continent and using its airline Rwandair to connect different regions of Africa with each other to turn capital Kigali in to a business, finance, trade and conferencing centre for the whole continent and combine this with its position in second place in the World Bank’s Ease of Doing Business rankings for Africa.

Rwanda has just launched the Kigali International Finance Centre (KIFC), an inland financial centre aimed at promoting and developing Rwanda as a leading financial destination for international investment and cross-border transactions in Africa. There are a variety of tax incentives on offer for businesses that qualify.

Rwanda’s main export is gold and its manufacturing sector is growing rapidly. Due to Rwanda’s move to position Kigali as to place for companies to locate their African headquarters, combined with the city’s cleanliness, security and liveability, we anticipate a boom in real estate in the short-to-medium term.

Despite all these positives, there has been international concern over the lack of civic space in the country, potential succession planning issues post-Kagame and the risk factors that these may pose as well as security concerns on Rwanda’s border with the Democratic Republic of Congo (DRC) and diplomatic relations between the two countries. 

Tanzania

Tanzania is Africa’s 5th most populous country with a wealth of opportunities in numerous sectors. It looks set to capitalise on instability in neighbouring Mozambique to grow its already sizeable LNG sector. On top of this, there are a number of mega-infrastructure projects already underway or due to commence.

Tanzania has one of the continent’s fastest growing construction sectors. The government has just shifted its administrative functions from Dar es Salaam to Dodoma with Dar es Salaam itself is one of the fastest growing cities in Africa and on course to become a mega-city.

The country has a diverse agriculture sector and is a leading tourist destination on the continent.

Whilst the country’s main export is gold and is Africa’s third largest gold producer, a number of opportunities exist in mining nickel and graphite in order to fuel the global ‘green economy’ but challenges do exist in the policy framework in the extractives sector.

Recent times have been turbulent for Tanzania with the passing of former President John Pombe Magufuli. Whilst he was praised for his crackdown on corruption and successful implementation of infrastructure projects, there was criticism over the authoritarian nature of his Presidency and relaxed response to the COVID-19 pandemic. Successor, Samia Suluhu Hassan has the opportunity to continue Magufuli’s good works whilst improving on areas of criticism such as improving the ease of doing business in the country.

Uganda

Uganda is Africa’s 8th most populous country. Like neighbouring Kenya, it is also known for its well-educated and entrepreneurial human resource.

Whilst Uganda’s main export is gold, it has a growing oil sector and regional trade will be boosted by a new, albeit controversial oil pipeline to Tanzania following the development of a new oil refinery.

Uganda, regarded as “The Pearl of Africa”, is Africa’s 2nd largest coffee exporter and has a well-developed and fairly diverse agricultural sector with potential to grow further to support a number of nearby countries within exportable reach suffering from food security issues.

Uganda also has a relatively well-developed manufacturing sector and growing healthcare and pharma sectors.

Despite these many positive signs, there were concerns over the extent of the COVID-19 related restrictions, which have now been relaxed. There have also been concerns over an ebola outbreak, terrorist threats in the country and on the handling of the country’s 2021 elections in which incumbent Yoweri Kaguta Museveni, then 76, was elected for his 6th term as President.

Stakeholders may wish to understand more about political and economic risk factors moving forward, particularly around succession planning issues in the country’s governance..

Zambia

Zambia (classified by the UN as East Africa), in 2021, democratically removed a government that had overseen a turnaround in its fortunes for the worse. It is heavily indebted, in sovereign default and was rapidly dropping down most of the continent’s economic and governance metrics. It does however, have many natural resources critical to the new ‘green economy’. It will be difficult however for investors to regain confidence in the country unless Zambia can reintroduce the rule of law, so investors can have confidence that contracts can be effectively enforced and corruption can be prosecuted against and tackled.

The 2021 elections saw Zambia become one of the only countries on the continent to experience three peaceful, democratic transitions of power in it’s history.

Despite some improvements since these elections, Zambia has maintained its position by the New York University Stern School of Business as the second riskiest jurisdiction to do business in Africa based on their Country Equity Risk Premium Index.

Now that Zambia has finally renogotiated its external debt and has proven that it is once again a responsible investment destination, the country’s main export of copper (one of only four countries in the world with this commodity as its main export) is tipped to become ‘the new oil’ and critical to fueling the booming ‘green economy’.

There are billions of dollars currently waiting to be invested in Zambia’s mining sector alone, notwithstanding the vast swathes of available agricultural land that the country has and landlinked status that can feed many neighbouring countries with food security issues.