7 Reasons to Invest in the EAC Now
Shikana Group
Leading legal and investment advisory firm specialized in foreign investments in Africa.
I. INTRODUCTION
This Monday's East African Community (EAC) roundup showcases a diverse range of investment opportunities and development initiatives. From infrastructure upgrades and renewable energy projects to advancements in aviation and financial inclusion, the region is taking crucial steps toward sustainable growth.
Tanzania's commitment to SME development, Rwanda's aviation ambitions, and Ethiopia's power sector revamp highlight the potential for private sector partnerships. Agritech innovation in Kenya and the deepening India-Uganda trade relationship further demonstrate the region's economic drive.
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II. TREND OF THE WEEK
Recent UK-DRC trade figures reflect major shifts in the bilateral relationship. Below is a quick breakdown.
For investors, the decline in UK imports from the DRC suggests the need for UK companies to diversify their sources of goods, potentially looking towards other African markets for similar commodities.
III. TOP HEADLINES?
TANZANIA?
The Tanzania Commercial Bank (TCB) is making notable investments to drive economic progress in the country. During a press conference on April 9, its CEO announced a TZS 300 billion initiative focused on supporting small and medium-sized enterprises (SMEs). This commitment targets the empowerment of 2,000 manufacturing SMEs in 2024 alone. It shows TCB recognizes the potential of these businesses to create jobs, expand the tax base, and stimulate growth. In fact, the bank’s substantial pledge aligns with its strong financial performance, recording a profit before tax of US$5.3 million in Q1 2024.
To support its move, TCB provides enterprise loans with competitive interest rates, flexible loan durations, and technical advisory services in various areas of business management. Other benefits include ideal repayment options based on the borrower's capacity, profitability, and cash flow. The bank also offers microloans for working capital and business expansion. These loans are accessible throughout TCB's 82 branches.
In addition to SME support, the commercial bank plans to broaden its reach by expanding its Islamic banking window in Zanzibar. This move aims to increase financial inclusion and cater to the needs of customers seeking Sharia-compliant financial services. The bank expects to launch Islamic banking services in Unguja and Pemba by the end of 2024. This has pushed TCB to enhance its digital service offerings to improve accessibility and reduce service delivery time. The bank's strategy emphasizes the importance of diversifying revenue streams beyond interest income to optimize costs and improve banking services.
TCB aspires to become the third-largest bank in Tanzania, after CRDB and NMB (with US$5.1 billion and US$4.7 billion assets under management, respectively). It is a public institution where the Government of the United Republic of Tanzania is the majority shareholder, with minority stakes held by various public bodies. The bank's dedicated investments in SMEs, expansion of Islamic finance, and focus on accessibility demonstrate a strong alignment with market needs. This positions the bank as an attractive partner for impact-focused international investors seeking opportunities in the growing Tanzanian market.
KENYA?
SunCulture, a leading provider of solar-powered irrigation and agricultural technology (agritech) solutions for smallholder farmers in Africa, has secured a substantial $27.5 million investment. This Series B funding round demonstrates strong investor confidence in the company's mission to empower farmers and address food security challenges in the face of climate change.
The startup’s IoT-enabled solar irrigation systems help farmers overcome reliance on rain-fed agriculture. Thus improving yields and ensuring food security in drought-prone regions. Compared to traditional fuel pumps, SunCulture's systems boast 40–60% lower costs and optimize water use through drip irrigation and targeted delivery. Its "Pay-As-You-Grow" model and carbon credit partnerships make their technology accessible to small-scale farmers.
Beyond irrigation, SunCulture's solutions include remote monitoring, battery storage for domestic use, and predictive maintenance, maximizing value for farmers. This new investment will enable SunCulture to expand its product line to address diverse agricultural needs and increase its impact by entering new African markets. The funding will also allow it to further develop its platform to improve farmer productivity and climate resilience. This oversubscribed investment round attracted noteworthy investors, including Netflix co-founder Reed Hastings, InfraCo Africa Limited, Acumen Fund, the Schmidt Family Foundation, and others.?
The need for climate-smart agriculture presents a vast opportunity for SunCulture and its backers. After all, it has a target of serving hundreds of thousands of smallholder farmers by 2030. The company's growth trajectory aligns with increasing international investment interest in climate-smart solutions and impact-driven businesses operating in Africa.
We encourage you to track its progress and decide whether or not to participate in its series C round.
UGANDA
3. Indian Investors Explore Opportunities
A 60-member Indian delegation is currently visiting Uganda to investigate potential business and investment ventures across various sectors. The group includes government officials, industry leaders, and representatives from verticals such as agriculture, healthcare, ICT, automotive, and renewables.
This visit signifies a deepening of the India-Uganda trade relationship, which saw two-way trade reach $1.06 billion in 2022. India's exports to Uganda totaled $594 million, with pharmaceuticals, motorcycles, and vaccines driving the trend. Uganda's exports to India reached US$464 million, dominated by commodities such as gold, cocoa beans, and coffee. As a result, Ugandan officials have expressed optimism that the Indian delegation will facilitate knowledge transfer, skill development, and, crucially, job creation.?
The delegation's focus on sectors like agriculture, agro-processing, agri-tech, healthcare, and solar energy aligns with Uganda's growth priorities. Foreign investors seeking opportunities in these areas would be well-advised to monitor the outcomes of this visit, as it could open doors for new collaborations and ventures.
Existing trade ties provide a solid foundation for potential new investments.
RWANDA
4. AfDB Invests in Aviation Training Hub, Economy Set for 7.2% Growth in 2024
Rwanda's commitment to developing a robust aviation sector is evident with the announcement of a new aviation skills training facility. The Center of Excellence for Aviation Skills (CEAS), funded by the African Development Bank (AfDB), is set to open in 2025, addressing the growing demand for skilled aviation professionals in Africa.
This investment in training aligns with Rwanda's goal of becoming a regional aviation hub and promoting sustainable economic growth. The World Bank (WB) projects the Rwandan economy to expand by 7.2% in 2024, driven by private sector development, domestic savings mobilization, and strong performance in tourism and services.
The CEAS will produce a skilled aviation workforce, opening opportunities for international investors in airline operations, aircraft maintenance, and related industries.
Rwanda's positive economic forecast, with declining inflation and job creation, signals a favorable investment climate. Challenges such as high unemployment and vulnerability to climate change underscore the need for investors to consider opportunities that promote resilience and diversification within the country's economy. In addition, investments aligned with Rwanda's Vision 2050, prioritizing sustainable development, are likely to receive government support. For instance, the focus on aviation infrastructure, including the Bugesera hub and training facility, opens opportunities for ancillary investments in logistics, support services, and maintenance.
The country’s focus on aviation aligns with its projected 7.2% growth in 2024 (WB), driven by private-sector development and strong tourism performance. RwandAir's expansion offers opportunities to capitalize on this growth trajectory. It is positioning itself to compete with larger regional carriers. Investors should assess the competitive landscape and potential market share gains. Its fleet modernization could reflect an interest in fuel-efficient aircraft. Investors prioritizing sustainability should consider related investment opportunities.
DRC
5. UK-listed Company Awarded Long-Term Contract?
Westminster Group Plc has secured a 10-year contract to upgrade security at five airports across the Democratic Republic of the Congo (DRC). The agreement, finalized during a recent UK-DRC Trade and Investment Mission, emphasizes Westminster's commitment to expanding its footprint within the African aviation sector.
Based on current passenger traffic, the contract is expected to generate approximately US$10 million in revenues within the first year, with potential growth from domestic and cargo operations. Westminster will invest in advanced detection technologies, training, and support, strengthening airport safety infrastructure in the DRC. This could attract new carriers and investors to the region.
The establishment of an aviation security (AVSEC) training academy will create a skilled workforce within the DRC, positioning the country as a regional leader in AVSEC. Additionally, this contract aligns with Westminster's growth strategy, leveraging its managed services model successfully deployed elsewhere in Africa.
While the DRC faces infrastructural challenges, it possesses significant potential for aviation sector development. Its size and population density necessitate investment in air transport infrastructure. Improving airport security and operations could unlock new domestic and international routes. Thus driving economic activity. On top of that, the DRC's abundant natural resources could drive demand for air cargo services, presenting further investment opportunities.
We encourage investors to explore opportunities in airport development, modernization, and services. Why? The growth of the DRC's aviation industry could create demand for hospitality, logistics, and tourism-related ventures.
领英推荐
SOUTH SUDAN
6. Forum Highlights Opportunities for Chinese Investors?
The third South Sudan-China Think Tank Forum concluded recently in Juba. It reinforced the commitment of both nations to enhancing cooperation and promoting development through research and knowledge exchange.
Key areas of focus include deepening collaboration in the education sector to build skills and capabilities for sustainable growth. For instance, The University of Juba and Zhejiang Normal University have a strong partnership focused on scholar exchange and research partnerships.
After all, China's exports to the country have grown notably over the last decade (annualized rate of 16.4%), indicating a strengthening trade relationship. The Asian nation’s potential role in promoting peace and stability within South Sudan could create a more favorable investment climate.
In 2022, the total value of China’s imports from SSD was U$237 million, primarily in crude petroleum, integrated Circuits, and office machine parts. During the same year, South Sudan imported US$156 million worth of Chinese goods, primarily delivery trucks, liquid pumps, and broadcasting equipment.
On top of that, China has a history of supporting infrastructure development in South Sudan, such as the renovation and expansion of Juba International Airport. South Sudan's vast oil reserves also present potential for investment in the energy sector.
SOMALIA
7. GCF Invests in Climate Resilience
The Green Climate Fund (GCF) is accelerating its support for Somalia with a commitment of over US$100 million in climate action investments by mid-2025. This announcement follows an inaugural visit to Somalia by GCF’s Executive Director.
Somalia ranks as the second-most vulnerable country to climate change globally, despite its minimal contribution to global emissions. That position, combined with security issues, has led to severe drought, displacement, and food insecurity across the country. However, Somalia’s government has made significant efforts to establish institutions and improve public financial management. Hence, this indicates a readiness for climate finance collaboration.
GCF's investment strategy for Somalia includes the "Hardest-to-Reach" project with Acumen. This move aims to bring reliable, affordable energy to unelectrified (off-grid) areas, with USD 3+ million allocated for Somalia in 2024-2025.
Further, GCF has allowed accelerated funding disbursement for certain projects (worth US$110 million, subject to Board approval) focusing on climate-smart agriculture (CSA), resilience building, and food security. The Fund is also providing readiness resources to improve Somali institutions' ability to develop climate finance proposals and potentially access GCF capital directly in the future. Up to US$7 million in direct readiness support is needed to sustain the Ministry of Environment and Climate Change's coordination capabilities.
This GCF commitment highlights investment opportunities in sectors crucial to Somalia's climate adaptation, including:
In fact, the Global Climate Fund aims to build a US$50 billion portfolio by 2030 for impactful, high-efficiency projects.
IV. UPCOMING EVENTS?
Date: April 22-24
Location: Nelson Mandela Hall, African Union
headquarters in Addis Ababa.?
Theme: "Making Third-Generation NDCs (NDCs 3.0) Deliver for Africa"
Organizers: African Climate Policy Centre (ACPC) of the Economic Commission for Africa (ECA), with partners.
Purpose: To discuss Africa-focused climate change solutions and priorities leading up to COP29, with a focus on the next generation of nationally determined contributions (NDCs).
Format: In-person
Date: April 23-25
Location: African Union Commission (AUC) Headquarters, Addis Ababa, Ethiopia
Theme: "Reinforcing Agendas 2030 and 2063 to Eradicate Poverty in Times of Multiple Crises"
Organizers: Economic Commission for Africa (ECA), with partners.
Purpose: To assess progress, share best practices, and develop solutions for accelerated implementation of the Sustainable Development Goals (SDGs) and Agenda 2063 in Africa.
Format: Hybrid (in-person and online)
Registration: https://indico.un.org/event/1009805/registrations/
V. EXPERT OPINION?
"Post-pandemic, new solutions are being implemented to address Africa's power challenges.?
Such solutions have had to consider the energy transition and the utilization of renewable energy, the focus on smart power technologies, the role of green hydrogen and ammonia, and the global drive towards a decentralized, decarbonized, affordable and secure energy supply that addresses climate change and stimulates economic growth."
?- Kieran Whyte, Head of the Energy, Mining, and Infrastructure (EMI) Industry Group at Baker McKenzie
VI. CONCLUSION?
The EAC is addressing key challenges, such as climate vulnerability in Somalia and infrastructure needs across the region. This can create potential long-term prospects for impact-driven investing.
Additionally, initiatives like the South Sudan-China Think Tank Forum highlight the importance of knowledge sharing and collaboration for long-term development.
As East Africa continues to attract investment and promote trade, we'll keep you updated on the most promising opportunities and emerging trends.
VII. SOURCES