Big moves and bold reforms as investors rush to East Africa
Shikana Group
Leading investment and advisory firm specialized in foreign investments in Africa.
INTRODUCTION
We’re thrilled to present this week’s edition of our newsletter, packed with the latest news and trends! In this edition, we focus on a range of exciting developments and investment opportunities that are shaping the future of the region. From critical diplomatic efforts like the EAC and SADC's collaborative response to the DRC conflict, to Tanzania's efforts to enhance its investment climate through the merger of key institutions, we highlight key initiatives that are transforming business environments across the continent. Additionally, we explore the growing potential of emerging markets, such as Uganda's oil sector, Rwanda's carbon credit market, Somalia's increasing economic ties with the South Caucasus, South Sudan's new electricity interconnection project, offering fresh investment opportunities, and Burundi's energy sector gaining momentum with USD 35M in funding for hydropower projects. In the headlines is DRC’s rise as a top investment hub further highlights East Africa’s growing appeal to foreign investors and Ethiopia’s bold economic reforms are also transforming its business landscape, creating lucrative opportunities across multiple sectors
At Shikana Group, we ensure that our readers remain ahead of the curve by analyzing investment shifts, policy changes, and high-potential sectors across Africa. Whether you're an investor, entrepreneur, or policymaker, this newsletter provides the insights you need to navigate and capitalize on East Africa’s evolving market dynamics.
TREND OF THE WEEK
EAC and SADC collaboration on DRC conflict and investment
The recent Summit between the East African Community (EAC) and the Southern African Development Community (SADC) focused on addressing the ongoing conflict in the Democratic Republic of Congo (DRC). Both regional blocs have long been concerned about the escalating instability in the DRC, which affects Southern and Eastern Africa. This Summit highlights a growing trend of collaboration between EAC and SADC, recognizing the need for a united response to the crisis. As the conflict continues to destabilize the Great Lakes region, the importance of collective action for peace and security is clear. The meeting emphasized diplomatic intervention, military support, and humanitarian aid. Both blocs agreed on deploying joint peacekeeping forces and enhancing coordination to put pressure on armed groups in the DRC. This collaborative approach stresses the significance of peace in one country for the security of the entire region.
From a business perspective, the Summit's outcome has vital implications. Security is a top factor influencing investor confidence. Conflict and instability deter investment, as businesses fear for their operations and assets. The insecurity in the DRC, which spills over into neighboring countries, has raised concerns for investors not just in the DRC but across the region.
The interconnectedness of the EAC and SADC means that insecurity in one member state can affect others. Political instability in the DRC impacts neighboring countries like Uganda, Rwanda, and Burundi, creating refugee flows and disruptions in trade. This regional problem makes stability across the area essential for economic growth. Thus, EAC and SADC collaboration is not only a diplomatic issue but also a business imperative. Regional peace efforts help create an environment conducive to investment, trade, and economic growth. As security improves, investors may view the region as a safer and more attractive destination for long-term investments.
While the EAC and SADC's efforts aim to restore peace in the DRC, their collaboration also supports regional economic growth. Security is crucial for investors, and a commitment to stability enhances the attractiveness of East and Southern Africa as an investment destination. As security improves, the business climate will likely improve, fostering economic collaboration and growth for all member states.
Tanzania
TIC and EPZA Merger Boosts Investment Opportunities in Tanzania
This week welcomed the merger between the Tanzania Investment Centre (TIC) and the Export Processing Zones Authority (EPZA), which marks a significant milestone in Tanzania’s efforts to streamline and enhance its investment climate. This merger is designed to create a more efficient and cohesive body to oversee and promote investment, industrial development, and export growth across the country. By combining the strengths of both institutions, the Tanzanian government aims to simplify processes, reduce bureaucracy, and provide a more seamless experience for investors, both local and foreign. This merger presents a unique opportunity to foreign investors. The new consolidated agency will offer a one-stop-shop for investment services, allowing businesses to access all the support they need i.e from investment permits and land allocation to incentives for establishing export-oriented industries. The enhanced coordination between TIC and EPZA ensures that investors can navigate Tanzania’s investment ecosystem with greater ease, leading to faster project approvals and smoother operations.
The merger also signals Tanzania’s commitment to fostering a favorable business environment that attracts foreign capital and expertise. As the country seeks to position itself as a regional investment hub, this consolidation is seen as a step toward improving Tanzania’s competitiveness. By reducing the administrative burden and offering more tailored services, Tanzania is making strides in enhancing its appeal to global investors looking for new markets with strong growth potential. Furthermore, with the creation of a unified platform, investors will have access to a wider range of incentives, including tax exemptions, duty-free imports, and other preferential treatments that were previously managed by separate entities. The new structure ensures that all investment sectors, including manufacturing, agriculture, and services, receive the attention they need to thrive, especially in export-led growth areas.
For potential investors, this merger offers a clearer, more transparent route to tapping into the vast opportunities Tanzania has to offer. Whether you are looking to establish new operations, expand existing businesses, or explore export markets, this new development promises a more streamlined and supportive environment to help you succeed. For more information on the proposed amendments, please refer to this link: https://shikanagroup.com/tanzania-investment-center-2/
Kenya
Investors flock to Money Market Funds for high 16 % returns
Kenya’s Money Market Funds (MMFs) are witnessing significant growth, offering investors high-yield, low-risk opportunities with returns reaching up to 16.6% annually. This surge in popularity is driven by favorable interest rates, increased investor awareness, and regulatory support. Key players in the market include Cytonn (16.6%), Lofty Corban (16.3%), and Gulfcap (16.3%), making MMFs an attractive alternative to traditional savings accounts.
For foreign investors, MMFs in Kenya offer a low-risk, high-return alternative, outperforming fixed deposits and traditional savings while benefiting from robust regulatory oversight. These funds primarily invest in short-term government securities, high-quality corporate bonds, and fixed deposits, ensuring capital preservation while delivering steady returns. The Capital Markets Authority (CMA) oversees MMFs, enhancing transparency, regulatory compliance, and investor protection, making Kenya a safer investment destination compared to other emerging markets. MMFs offer higher liquidity and flexible withdrawals, unlike Treasury Bills (T-Bills), which require longer holding periods. Compared to stocks or real estate, which can be volatile and require significant capital, MMFs offer a secure and predictable investment. While MMFs are subject to withholding tax, they remain a tax-efficient investment choice for both retail and institutional investors. The sector is also experiencing a digital transformation, with fintech integration and mobile money platforms like M-Pesa enabling seamless investments and withdrawals, making MMFs more accessible than ever.
Kenya’s MMF sector is well-regulated, high-yielding, and offers strong capital preservation, making it a strategic investment option for portfolio diversification. With favorable economic conditions, regulatory oversight, and increasing financial literacy, MMFs are expected to continue growing, reinforcing Kenya’s position as a regional investment hub. For investors seeking passive income, financial stability, and liquidity, MMFs present a low-risk, high-reward opportunity in one of East Africa’s fastest-growing financial markets.
Uganda
Oil’s potential to transform Uganda’s path toward a USD 500 Billion economy
Uganda is aiming for tenfold economic growth by 2040, with the oil and gas sector playing a pivotal role in this transformation. With an estimated 6.5 billion barrels in reserves, Uganda’s oil sector offers substantial investment opportunities, particularly following the 2022 Final Investment Decision by CNOOC Uganda, Total Energies E&P, and UNOC. Major developments such as the East African Crude Oil Pipeline (EACOP), the Tilenga and Kingfisher oil blocks, and the Uganda refinery could inject over USD 20 billion into the economy, driving investor confidence, as evidenced by the record USD 3.034 billion in foreign direct investment (FDI) in 2023. The oil sector is also fostering local job creation, with over 15,000 workers employed, 90% of whom are Ugandan. This, along with the government’s focus on local skills development, is ensuring that the benefits from the oil boom stay within the country. Additionally, the oil sector is poised to stimulate industrialization, with downstream industries like fertilizer production, plastics, and pharmaceuticals expected to boost manufacturing and make Uganda’s industries more competitive regionally and globally. While Uganda’s oil boom is promising, investors should consider strategies to mitigate risks, including shifting global energy policies and infrastructure delays. Uganda must strategically reinvest oil proceeds into sectors like agriculture, tourism, and manufacturing to ensure long-term sustainability. Furthermore, managing public debt tied to oil expectations will be crucial, and the country must avoid the "resource curse" by ensuring equitable use of oil revenues.
Environmental concerns related to the East African Crude Oil Pipeline (EACOP) must be addressed through robust safeguards and community engagement. For foreign investors, Uganda offers numerous opportunities in the oil and gas sector, but navigating the challenges of energy transition, fiscal risks, and environmental impacts will be key to achieving long-term success. Uganda’s focus on industrialization, local content, and environmental sustainability makes it an attractive investment destination.
Rwanda
Unlocking opportunities in Rwanda’s carbon market
Rwanda has positioned itself as a leader in Africa’s carbon market, unveiling a "Practical Guide" to help investors understand and engage in carbon credit trading. This was developed by the Global Green Growth Institute (GGGI) in collaboration with the Rwanda Environment Management Authority (REMA) with the aim of simplifying access to carbon finance opportunities. Rwanda’s carbon credit market enables investors to fund climate projects while earning revenue from global carbon trading schemes. Each credit represents one ton of carbon dioxide reduced or removed from the atmosphere. Rwanda's participation in this global initiative aligns with the Paris Agreement’s Article 6, which facilitates emissions reduction financing. Investors can participate in various projects, including forestry, renewable energy, methane capture, and sustainable agriculture, all of which generate tradable carbon credits.
With an ambitious goal of selling 7.5 million carbon credits, Rwanda estimates potential revenue of USD 337 million. Given that carbon credit prices range from USD 30 to USD 45 per ton, this presents a lucrative opportunity for both private and institutional investors looking to engage in sustainability-focused ventures. Additionally, the government plans to use these funds to support its 10-year climate action plan, which requires USD 11 billion- USD 5.7 billion for mitigation and USD 5.3 billion for adaptation projects.
The country’s carbon credit framework includes three key pricing mechanisms: Carbon Tax, which charges polluters per ton of emissions; Carbon Crediting Mechanisms, which reward emission reductions; and the Emissions Trading System (ETS), where companies trade carbon allowances. Investors can engage in direct trading or work with intermediaries such as brokers or exchanges. Rwanda’s commitment to the carbon market is reinforced by its growing investment in green initiatives, including improved cook stoves, afforestation, and renewable energy expansion. The country is leveraging international carbon finance mechanisms, such as the UN’s Clean Development Mechanism (CDM) and independent platforms like the Gold Standard, to attract foreign capital.
For investors seeking impactful opportunities in Africa, Rwanda’s carbon market presents a dynamic and financially promising space. With strong government support, a clear regulatory framework, and a pipeline of green projects, Rwanda is an emerging destination for businesses committed to sustainable investments and global carbon trading.
Democratic Republic of Congo
DRC emerges as Africa’s top investment destination amid rapid economic growth
Despite its ongoing conflict in Eastern Congo and the insecurity, the Democratic Republic of Congo (DRC) is rapidly becoming one of Africa’s top investment destinations, fueled by robust economic growth, extensive natural resources, and a wave of policy reforms aimed at enhancing the business environment. A standout example of the country's emerging opportunities is the establishment of a 16-gigawatt battery manufacturing plant by Kenyan tycoon Julius Mwale in partnership with U.S.-based KE International. Located near cobalt and nickel mines, this facility is set to play a crucial role in the electric vehicle (EV) and renewable energy sectors, which are projected to be worth USD 45 trillion by 2050. By reducing global supply chain disruptions, this plant positions the DRC as a critical player in the future of clean energy storage, a sector attracting global attention.
The DRC's banking sector is also expanding rapidly. Equity Group, one of Africa’s largest financial institutions, has seen its Congolese operations outpace those in Kenya, growing nearly 60% annually. This success underscores the DRC’s emerging role as a regional financial hub, with its dollar-based economy, trade links, and business-friendly reforms attracting investors in banking, fintech, and trade finance. In addition, the DRC's recent accession to the East African Community (EAC) and participation in the African Continental Free Trade Area (AfCFTA) open doors to expanded regional trade. These moves offer investors access to a larger consumer market across Africa, while ongoing government-backed initiatives are streamlining business processes in mining, agriculture, ICT, and infrastructure. With its strategic location, vast mineral wealth, and continuous economic reforms, the DRC is on the cusp of explosive growth. Investors in sectors like energy, manufacturing, and banking should consider the DRC as a key market for long-term investment. The nation’s expanding infrastructure, coupled with favorable policy incentives, make it one of Africa’s most promising investment frontiers. However, it’s important to consider potential challenges, including political stability and regulatory issues, which investors should closely monitor as they evaluate entry strategies.
Burundi
Investment opportunities in Burundi energy sector with USD 35M hydropower projects funding
Anzana Electric Group has raised USD 35 million in debt financing from the Trade and Development Bank Group (TDB) for two significant hydropower projects. This deal represents Burundi’s largest long-term project financing to date and will play a vital role in a country where only 12% of the population currently has access to electricity. The financing will support the development of the 1.65MW Upper Ruvyironza project and the 9MW Upper Mulembwe project. These projects will boost the country's energy generation capacity by approximately 10% and are expected to begin supplying the national grid in 2025 and 2027, respectively. Both projects are being developed by Songa Energy, a subsidiary of Anzana Electric Group. To mitigate risks and ensure a stable investment environment, the projects will also benefit from political risk insurance and payment guarantees from the African Trade & Investment Development Insurance (ATIDI) through the Regional Liquidity Support Facility (RLSF). The projects, developed under Burundi’s public-private partnership framework, will provide over 62 GWh of clean, base load electricity annually to the national grid. This will have a significant impact on Burundi’s economic growth, particularly by supporting industrial and community development in the southern and eastern regions of Africa. In addition to these projects, Songa Energy is part of Anzana Electric Group’s broader strategy in Burundi, which includes the Weza Power electricity distribution utility. This initiative aims to connect over two-thirds of the population (around 9 million people) to electricity over the next 7 years.
Foreign investors will find significant opportunities in Burundi’s evolving energy sector, with projects backed by strong governmental support and designed to foster long-term economic development. The involvement of Gridworks, which made a USD 50 million equity investment in Anzana Electric Group in 2023, further, solidifies the potential for growth in the region. Investors looking to enter the African energy market can leverage these developments as a gateway to expanding access to electricity and driving sustainable economic growth in Burundi and surrounding regions
South Sudan
Investment opportunity in South Sudan with new electricity interconnection project
The Board of Directors of the African Development Fund has approved significant loans and grants to Uganda and South Sudan to implement an electricity interconnection project between the two neighboring East African countries. This project was approved on December 13, 2024, in Abidjan and will cost a total of USD 260 million, with USD 153.66 million provided by the African Development Fund (ADF). Under this financing, Uganda will receive a loan of USD 119.21 million, while South Sudan will benefit from a grant of USD 32.50 million. Additionally, the Nile Basin Initiative, of which both countries are members, will receive a USD 1.95 million grant from the ADF. The project aims to integrate South Sudan into the East African Power Pool network, addressing electricity shortages and improving reliability and affordability in South Sudan. It will also help Uganda utilize its surplus electricity generation capacity while expanding electricity trade between the two nations.
The interconnection project has five key components. It includes the construction of a 299-km electricity transmission line between Gumbo village near Juba (South Sudan) and Olwiyo in Uganda, with 149 km in South Sudan and 150 km in Uganda. Additionally, two new substations will be built, one at Gumbo and another at Biba, near the Uganda-South Sudan border. Other aspects of the project include installing distribution networks with 1,000 last-mile connections, project administration and management, capacity building, and a study on the cost of electricity services in South Sudan. Once completed, the interconnection will facilitate the exchange of 624 GWh of electricity between Uganda and South Sudan annually. This will lower greenhouse gas emissions and improve electricity access for about 286,710 people in South Sudan. Additionally, the project is expected to reduce electricity tariffs for South Sudanese consumers and create both permanent and temporary jobs, with at least 15 out of 50 permanent jobs and 300 out of 1,000 temporary jobs reserved for women..
Somalia
Exploring New Horizons for Economic Cooperation Between Somalia and the South Caucasus
Somalia is an emerging market with vast untapped potential. As the country develops its infrastructure and economic landscape, there are significant opportunities for foreign investment, particularly in expanding its trade and economic relations with the South Caucasus region. The South Caucasus, including Georgia, Armenia, and Azerbaijan, serves as a critical crossroads between Europe, Asia, and the Middle East, making it an ideal partner for Somalia's growing economy. One of the key areas for collaboration lies in trade. Somalia’s port cities like Mogadishu and Berbera are vital gateways to the Indian Ocean, facilitating the export of agricultural products, livestock, fish, and other natural resources. For South Caucasus countries, which have established trade networks, the region presents an opportunity to diversify exports and increase access to African markets. In return, Somalia can tap into the Caucasus region’s infrastructure and resources, particularly in sectors like energy, manufacturing, and high-tech industries. Infrastructure development is another critical area for cooperation. Somalia's ongoing investments in improving its port and logistics infrastructure can benefit from the expertise of countries like Georgia, which has made significant strides in enhancing its port facilities in Batumi and Poti. Joint ventures in infrastructure, such as expanding trade routes, road networks, and railways, would boost regional connectivity and trade efficiency, benefiting both Somalia and the South Caucasus. Energy collaboration also holds great potential. Azerbaijan, known for its vast oil and natural gas reserves, offers technological expertise in energy exploration and development. Somalia, which possesses untapped energy resources, could benefit from Azerbaijan’s experience in the energy sector. A few weeks ago, Azerbaijan signed a series of agreements with Somalia, marking a significant step in the country’s efforts to expand its influence in the East African region. The deals cover key areas such as trade, energy, and infrastructure development, highlighting Azerbaijan’s growing interest in strengthening ties with African nations. By leveraging its expertise in the energy sector and offering support for infrastructure projects, Azerbaijan aims to play a more active role in East Africa’s economic development. This move reflects Azerbaijan’s broader strategy to diversify its international partnerships and increase its presence in emerging markets across Africa. This collaboration could extend to energy exports, with Somalia serving as a gateway for energy trade to global markets via its maritime routes.
Beyond trade and energy, the South Caucasus is an ideal partner for promoting cultural exchange and foreign direct investment (FDI). Educational collaborations, tourism ventures, and business partnerships could further strengthen diplomatic ties and open new avenues for economic growth. The growing technology sectors in the South Caucasus, particularly in Georgia and Azerbaijan, could benefit from investing in Somalia’s emerging digital economy, supporting sectors like fintech, telecommunications, and e-commerce. Finally, cooperation in security and stability is essential for fostering a conducive environment for investment. Somalia and the South Caucasus share common challenges in maintaining security, especially in maritime regions. By partnering in security initiatives, both regions can ensure safer trade routes and enhance their strategic positions in the global economy.
Ethiopia
Investment ecosystem thrives and attracts nearly USD 1.2 Billion in FDI
Ethiopia’s investment landscape is rapidly transforming, attracting nearly USD 1.2 billion in Foreign Direct Investment (FDI) within the first four months of the fiscal year. This growth is driven by over 80 pro-business reforms in the past six years, aimed at reducing bureaucratic hurdles and opening up key sectors to foreign investors. The Ethiopian Investment Commission (EIC) now offers comprehensive investor support, streamlining processes such as visa applications, residence permits, banking assistance, and market linkage facilitation.
The legislative advancements including amendments to the Commercial Code, the introduction of the Capital Markets Act, and the E-Transaction Act have boosted investor confidence by ensuring legal predictability. A major milestone is the liberalization of business sectors previously closed for over 50 years, allowing foreign investors to participate in wholesale, retail, import, and export trade. Ethiopia’s strategic advantages, including a population exceeding 120 million, access to low-cost renewable energy, and well-developed industrial parks, make it an attractive investment destination. The government is focusing on five key economic pillars which include manufacturing, agriculture, ICT, mining, and tourism offering diverse investment opportunities. For instance, agriculture presents lucrative prospects in coffee processing, fertilizer production, and improved seed and animal feed production, while the energy sector is booming with investments in hydropower, geothermal, solar, and wind power. Furthermore, Ethiopia’s membership in the African Continental Free Trade Area (AfCFTA) and COMESA provides investors with seamless access to a broader regional market. Recent macroeconomic reforms, such as the liberalization of the foreign exchange system, have improved capital repatriation and enhanced ease of doing business. Investors in special economic zones now benefit from policies that support growth and foreign exchange retention. With Ethiopia emerging as a prime investment hub in Africa, foreign investors are encouraged to engage with the EIC for tailored support in navigating the market. As global players continue to expand into Ethiopia, sectors like renewable energy, agriculture, and manufacturing present some of the most promising opportunities for long-term success.
Upcoming events
1. 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.
2. Africa Investment Exchange (AIX) – Nairobi 2025
Date: 19-20 March, 2025
Location: Nairobi, Kenya
Agenda: This event will bring together energy professionals, investors, and project developers to explore innovative financial models and investment opportunities in Africa's energy and infrastructure sectors. Topics will include climate finance, energy access, and power sector investments.
Registration here: https://africa-investment-exchange.com/events/africa-investment-exchange-aix-nairobi-2025/
Who should attend:
? Energy investors
? Financial institutions
? Project developers
? Government officials from Africa and beyond.
Key Features:
? Roundtable discussions
? In-depth analysis of market trends
? Insights into the impact of investment on socio-economic development.
Opinion of the week
“Africa has a significant role to play in driving inclusive growth and sustainable development globally. The continent remains a treasure trove for smart investors globally”
Kevin Urama, the African Development Bank Acting Chief Economist
CONCLUSION
As we wrap up this week’s edition of our newsletter, we hope you have gained valuable insights into the latest trends shaping the investment landscape. Whether you are an investor, entrepreneur, or business leader, staying ahead requires continuous learning, adaptability, and strategic decision-making. We are committed to equipping you with timely, well-researched, and practical information to help you make informed investment choices.
East Africa continues to offer exciting opportunities across various sectors, from infrastructure and energy to technology and finance. As the business environment evolves, understanding the regulatory landscape, emerging markets and economic shifts is crucial for long-term success. We aim to bridge the gap between investors and opportunities, keeping you informed and empowered. We’d love to hear from you! If you have any questions, insights, or topics you’d like us to explore in future editions, feel free to reach out. Your feedback helps us refine our content and provide even more relevant updates tailored to your interests. Stay connected with us as we track Africa’s investment transformation because in today’s fast-moving markets, information is the most powerful asset. S
RESOURCES
1. AP News (2025) conflict regional summit
2. The Chanzo initiative (2025)
3. The star (2025) business markets
4. Observer (2025)
5. Azer news (2025)Capital Ethiopia (2025)
6. The exchange Africa (2025)
7. New times Rwanda (2025)
8. African Development Bank Group (2025)
9. Gridworks (2025)