As many economies around the world face a slow down, or worse yet, continue to struggle, East Africa is attracting more and more international attention. For a host of reasons, East Africa is on the verge of becoming the next hotspot for investors and multinational corporations.
Africa has long been known to have tremendous resources, which extend far beyond the diamonds and gold that everyone knows about. The past years have brought about significant discoveries of oil, natural gas, graphite, coal, and a host of other extremely valuable rare earth metals and commodities. The impact these players have on the economy is tremendous; the largest mine in Tanzania employs over 4000 people, while also giving rise to a number of related services companies that are eager to support the mining and energy industries.
While a true agricultural revolution has yet to happen, East Africa is extremely fertile, and capable of producing immense quantities of agricultural goods; from staple foods like rice and corn, to upmarket and high demand items like avocados, to non-food products like timber. East Africa is ideally situated to then export commodities and food to Asian countries with a high demand for such products.
There are a tremendous number of infrastructure projects designed to move people, goods and commodities (i.e. oil pipelines and LNG terminals), modernize cities, and create large scale housing in an extremely undeveloped part of the world. These projects will only further industrialization, which brings about increased spending and a knowledge transfer from the western businesses brought in to build these projects.
All of these industries are bringing wealth and jobs, which are much needed as Africa experiences a population boom that far exceeds the rest of the world. It also creates a middle class with actual purchasing power and a desire for western goods; and this consumerism leads to opportunities in FMCG and even manufacturing.
While there is still a long way to go, East Africa has been a stable corner of the continent, with many governments focused on creating a business friendly environment, and cutting down on corruption. Tanzania's new President, John Magufuli, has received international acclaim for his sweeping reform and anticorruption efforts- the effects of which are clearly evident after less than a year into his presidency.
All of these macroeconomic factors mean that an increasing number of multinationals will eye East Africa for their expansion plans. Private Equity and other investment funds allocated to the region have been dramatically increasing, and many experts expect this trend to only continue.
East Africa Market Entry Consulting