Beyond Aid Africa shifts to investment trade and economic partnership
Shikana Group
Leading investment and advisory firm specialized in foreign investments in Africa.
Introduction
Welcome to this week’s edition of our newsletter, your source for the latest investment trends, trade developments, and economic shifts shaping East Africa’s business landscape. This week, we explore the growing Egypt-Tanzania trade partnership, focusing on how investments in agriculture, manufacturing, and fertilizers are driving economic expansion. With Egypt’s advanced agricultural technology and Tanzania’s vast potential in agribusiness, this collaboration presents lucrative opportunities for investors.
Beyond Tanzania, we also cover key investment highlights across East Africa such as Kenya’s expanding trade ties with Switzerland, Uganda’s injection of capital into its Development Bank, Burundi and Tanzania’s major railway deal with China, Ethiopia’s strategic stock market reforms, and Rwanda’s latest budget adjustments to foster economic resilience. Join us as we analyze these developments and explore how businesses can capitalize on emerging opportunities in East Africa’s dynamic investment landscape.
Trend of the week
Decline in western Aid pushes Africa toward investment and intra-continental trade
Recent developments in global aid policies signal a fundamental shift in Africa’s economic landscape. The U.S. government has ordered the shutdown of USAID’s overseas missions, recalling staff and halting billions of dollars in development assistance. This shutdown comes on the heels of a broader freeze in U.S. foreign aid, as President Trump's administration seeks to align aid distribution with an "America First" policy. At the same time, Switzerland and the Netherlands are reducing their aid contributions to Africa, reflecting a broader trend of Western nations pulling back from traditional development aid. Switzerland has announced significant reductions in its international cooperation budget, cutting USD 121 million from its 2025 budget and USD 362.73 million from its financial plan for 2026–2028. As part of these cuts, Switzerland will terminate development programs in Zambia, Eritrea, and other nations, affecting bilateral and thematic initiatives, as well as partnerships with organizations working in Africa. Similarly, the Netherlands has been gradually shifting its aid policy away from traditional financial assistance, focusing instead on trade and private sector development. Dutch aid reforms emphasize sustainable investment and economic cooperation, aligning with a broader trend of Western nations prioritizing economic partnerships over direct aid. This shift marks beginning of the end of the aid era, as Africa can no longer depend on foreign assistance to fund key sectors like healthcare, education, and infrastructure. Instead, African governments must prioritize investment and private sector growth by fostering business-friendly environments, strengthening financial markets, and improving ease of doing business.
The African Continental Free Trade Area (AfCFTA) emerges as a game-changer, offering a path toward economic self-sufficiency through enhanced intra-African trade, reduced trade barriers, and local industrialization. For investors and policymakers, this transition means shifting focus from donor-funded projects to African startups, manufacturing, and infrastructure. Governments must implement reforms that attract domestic and foreign investment by ensuring regulatory stability and reducing bureaucracy. Businesses should seize opportunities within (AfCFTA) to expand market reach and strengthen supply chains. While the decline in aid may seem like a crisis, it is also an opportunity for Africa to redefine its economic trajectory.
Tanzania
Egypt and Tanzania boost economic and trade collaboration
The Egypt-Tanzania business conference marked a significant step in strengthening trade and investment between the two nations. With Egypt’s multinational company El-Sewedy already making significant investment in Tanzania and with plans to build an industrial city, it is natural that other private sector players from Egypt are also now eying the Tanzanian market. Therefore, 23 Egyptian companies across 10 key sectors, including chemicals, fertilizers, agriculture, and manufacturing, have been to Tanzania this last week to explore business opportunities. Egyptian firms also conducted market visits to assess potential collaborations.
A key outcome of the forum was the recognition of agriculture as a major investment area, with Egypt’s advanced agricultural technologies complementing Tanzania’s favorable investment environment. Efforts are underway to address trade barriers, particularly the lack of a free trade agreement, by leveraging the African Continental Free Trade Agreement (AfCFTA) to facilitate smoother trade. The discussions also underscored the need to establish local manufacturing plants for fertilizers, seeds, and chemicals to reduce dependency on imports and enhance value addition.
The conference also served as a networking platform, allowing Tanzanian businesses to explore export opportunities in Egypt and expand their presence in the North African market.
Kenya
Kenya and Switzerland strengthen trade and investment ties
Principal Secretary for Trade, Alfred K’Ombudo, hosted a delegation of Swiss Parliamentarians at Teleposta Towers, Nairobi, to discuss strengthening Kenya-Switzerland trade ties and exploring new investment opportunities. The delegation included members from the Swiss National Council and the Council of States, representing the European Free Trade Association (EFTA). Discussions focused on diversifying Kenya’s export market beyond traditional commodities like tea, coffee, and flowers by promoting value addition and expanding the services sector, which generates USD 6 billion in exports. Kenya aims to attract investment in key industries where Switzerland has expertise, including pharmaceuticals, machinery, and renewable energy. With nearly USD 1 billion worth of pharmaceuticals imported annually, Kenya sees potential in diversifying supply sources and enhancing local production.
Sustainability remains a priority, with Kenya committed to ethical and verifiable supply chains. Currently, 93% of the manufacturing sector operates on green energy, with plans to achieve full sustainability. Switzerland, with over 40 free trade agreements worldwide, is looking to expand its presence in Africa, recognizing Kenya’s strategic role in the East African Community. There is potential for a new trade agreement that could facilitate easier market access, investment flows, and long-term economic growth for both countries.
Uganda
USD 275M sought to capitalize Uganda Development Bank
The Uganda Development Bank (UDB) is set to receive a capital injection of USD 275 million to enhance its capacity to support socio-economic development through long-term financing. This funding aims to strengthen UDB’s role in financing key sectors such as agriculture, manufacturing, infrastructure, tourism, and human capital development. The financing will be sourced from the Arab Bank for Economic Development in Africa (USD 150 million), OPEC Fund for International Development (USD 25 million), International Islamic Trade Finance Corporation (USD 30 million), Islamic Development Bank Ltd (USD 40 million), and the Islamic Corporation for the Development of the Private Sector (USD 30 million).
This capital boost offers foreign investors strategic opportunities in infrastructure, agribusiness, and manufacturing. With increased funding, Uganda Development Bank will be better positioned to finance large-scale infrastructure and industrial projects, creating a more stable investment climate. Investors in Uganda’s priority sectors such as agribusiness, renewable energy, and manufacturing could benefit from improved access to local financing, reducing dependency on expensive short-term loans. Additionally, UDB’s focus on trade facilitation and SME development aligns with efforts to strengthen supply chains, making Uganda a more attractive destination for investment.
This move also signals the government’s commitment to economic expansion and private sector growth. By increasing UDB’s lending capacity, Uganda is addressing its liquidity challenges and improving access to affordable capital, fostering long-term economic stability. For investors looking at Uganda, this funding enhances the potential for strategic partnerships, co-financing opportunities, and sector-driven growth, positioning the country as a hub for investment in East Africa
Burundi
Burundi and Tanzania sign deal with China to build nickel-carrying Standard Gauge Railway
The Burundi- Tanzania Standard Gauge Railway (SGR) project is a significant infrastructure investment aimed at boosting trade, logistics, and economic integration in the region. The USD 2.15 billion contract, awarded to China Railway Engineering Group Ltd and China Railway Engineering Design and Consulting Group, will establish a 282-kilometer railway linking Tanzania’s Uvinza region to Burundi’s Musongati. This railway is designed to facilitate the transportation of minerals, particularly nickel, from Burundi to Tanzania’s Dar es Salaam port, supporting export growth.
The African Development Bank (AfDB) is financing the project through a concessional loan, marking its largest investment in Tanzania’s railway sector. In December 2023, AfDB approved a USD 696.41 million financing package, with USD 597.79 million allocated to Tanzania in loans and guarantees and USD 98.62 million given to Burundi as grants. Additional financing of up to USD 3.2 billion is being mobilized from commercial banks, development finance institutions, and export credit agencies.This railway is expected to transport at least three million tonnes of minerals annually from Burundi, which has the world’s 10th largest nickel reserves, along with other minerals such as cobalt and copper. It will also enhance transit trade between the two countries and stimulate agricultural exchange via the central corridor.
Beyond Tanzania and Burundi, the SGR is expected to expand and link the Democratic Republic of Congo (DRC), Rwanda, and Uganda, further improving regional connectivity. This aligns with Tanzania’s broader USD 7.6 billion SGR project, which aims to create a modern railway network spanning over 1,600 km across East Africa.
Rwanda
Rwanda Adjusts 2024/25 Budget to Strengthen Economic Growth and Public Services
The Government of Rwanda has revised its 2024/25 fiscal year budget, increasing revenue and spending by USD 90 million, raising the total budget from USD 4.08 billion to USD 4.18 billion. This adjustment, announced by the Minister of Finance and Economic Planning, Yusuf Murangwa, reflects changes in the resource envelope and aims to enhance resource allocation, support emerging national priorities, and improve public service delivery. The revision includes key adjustments in both revenue and expenditure. Despite a USD 14.36 million decline in projected tax revenue, increased privatization proceeds and concessional loans will offset the shortfall. On the expenditure side, the development budget increases by USD 57.58 million, bringing it to USD 1.5 billion, with funds allocated to priority sectors such as infrastructure, agriculture, climate change, education, and healthcare. Rwanda is positioning itself as a high-growth, investor-friendly economy with opportunities in infrastructure, agriculture, green energy, healthcare, and education. Investors should explore public-private partnerships, equity stakes in privatized sectors, and projects aligned with Rwanda’s sustainability goals Rwanda remains economically resilient despite global challenges like inflation, climate change, and geopolitical uncertainties and the government is committed to maintaining macroeconomic stability and promoting inclusive growth. These budget adjustments reflect Rwanda’s long-term vision of strengthening its economic resilience while ensuring sustainable development.
Ethiopia
Ethiopia Opens Stock Market to Foreign Investors with 30% Ownership Cap
Ethiopia’s central bank and its newly established capital market authority are developing mechanisms to facilitate foreign investment in the country’s stock exchange. Foreign investors can acquire up to 30% ownership in Ethiopia’s stock exchange. The main aim is to mitigate investment risks for foreign investors by streamlining key regulatory processes, particularly land-related matters, allowing them to focus on business operations. These initiatives align with Ethiopia’s broader economic reforms, spearheaded by Ethiopian Investment Holdings (EIH), which manages 40 state-owned enterprises. These include Ethiopian Airlines, the largest national carrier in Africa, and Ethio Telecom, one of the continent’s biggest telecommunications companies. In the first half of Ethiopia’s fiscal year, these enterprises generated approximately USD 7.12 billion in revenue.
As part of its privatization efforts, Ethiopia plans to fully divest from its sugar industry while considering listing insurance, shipping, and printing firms on the upcoming Ethiopian Securities Exchange (ESX). However, the country’s first IPO - a 10% stake in Ethio Telecom has been delayed, raising concerns about the pace and execution of Ethiopia’s market liberalization efforts. Ethiopia is advancing State- Owned Enterprises (SOE) reforms under the Homegrown Economic Reform Agenda 2.0, supported by the IMF and the World Bank. In December, the World Bank approved a USD 700 million credit line to strengthen Ethiopia’s financial sector, with 90% allocated to the Commercial Bank of Ethiopia (CBE). To address the mounting debt burden of SOE, the government issued USD 6.68 billion in sovereign bonds in November 2024, primarily to repay debts owed to the Commercial Bank of Ethiopia (CBE).
The launch of the Ethiopian Securities Exchange is expected to transform the country’s capital markets and attract new investments.
Upcoming events
Africa Business Forum 2025
Date: February 17, 2025
Location: United Nations Conference Center, Addis Ababa, Ethiopia
Register here: https://indico.un.org/event/1015354/registrations/18660/#:~:text=Africa%20Business%20Forum%202025%20(17,UN
Agenda:
? Developing regional value chains (RVCs) in livestock, agribusiness, and pharmaceuticals
? Enhancing special economic zones (SEZs)
? Promoting sustainable industrialization and job creation
? Investment opportunities in Africa
? Focus on sustainable development and Agenda 2063
Who Should Attend:
? Government officials
? Investors
领英推荐
? Financial institutions
? Industry experts
? Business leaders
Key Features:
? Panel discussions
? Networking sessions
Investor Roadshow: Invest in African Energy
Date: February 21, 2025
Location: The Ritz-Carlton Hotel de la Paix, Geneva, Switzerland
Agenda:
? Investment Opportunities in Africa’s Energy Sector
? Investment Case Studies
? Exploring Renewable Energy Potential
? Networking and B2B Meetings
Who should attend:
? Energy Companies
? Investors
? Government Representatives
? Consultants
? Financial Institutions
Key features:
? Investment Framework
? Expert Panels
? Exclusive Gatherings
? De-risking Mechanisms
In attendance: Amne Suedi, CEO of Shikana Investment and Advisory, will be attending this event. This exclusive gathering presents a unique opportunity to engage with her on legal and investment advisory services in Africa’s energy sector. Attendees can explore potential synergies, gain insights into investment frameworks, and discuss strategic opportunities in the evolving energy landscape.
Opinion of the week
“Africa needs significantly higher rates of growth to successfully navigate today’s development challenges and capture tomorrow’s opportunities. It’s time to stop talking about Africa’s potential and start realizing it.”
Ex-World Bank senior official Samuel Maimbo of Zambia
Conclusion
East Africa’s investment landscape is transforming rapidly, with new trade partnerships, financial reforms, and infrastructure projects driving economic growth. This week’s developments from Egypt-Tanzania’s growing trade in agriculture and manufacturing to Uganda’s capital injection into its Development Bank underscores the region’s increasing appeal to investors. Ethiopia’s stock market reforms and Kenya’s expanding trade ties with Switzerland further highlight East Africa’s positioning as a key investment destination.
As investors navigate opportunities in agri-tech, manufacturing, financial services, and infrastructure, strategic partnerships and an understanding of regional trade agreements will be critical for success.
What sectors do you see as having the most potential for growth? Engage with us and share your insights as we continue to track the latest investment trends shaping East Africa’s future. Stay tuned for next week’s edition, and thank you for being part of the Shikana Group Investment Newsletter community.
RESOURCES
1. Daily News (2025) bilateral trade ties
2. Kenya News (2025)
3. Parliament of republic of Uganda (2025)
4. Shega (2025)
5. Energy Capital Power (2025)
6. Mine Coffin (2025) news details
Top 50 Women In Management Africa, seasoned professional in finance and taxation. Member of CEORT, BBG, EUBG board member, Kijani Pamoja Board member, team member Leadership Development and Training- EO Global
2 周Thanks for sharing