Exploring Business Opportunities in East Africa: A Growing Economic Hub
East Africa presents numerous business opportunities for entrepreneurs and investors from all over the world. The region is made up of several dynamic countries, such as Kenya, Tanzania, Uganda, Rwanda, and Burundi, which are rapidly developing economically and offering exciting prospects for businesses.
« East Africa is an opening to the rest of Africa, the Middle East and the Indian Ocean”. Confirms Mourad Chouiqa, the Regional Manager for East Africa, Southern Africa and the Indian Ocean at Bpifrance. Its rapid economic growth is also a key factor to its attractiveness.
According to the World Bank, the region is becoming one of the fastest-growing economies in the world, with a growth rate of 4.2% in 2022. The combined GDP (Gross Domestic Product) of the region is expected to surpass $300 billion by 2023.
However, the region seems quite often avoided by francophone entrepreneurs for its seemingly distant English-speaking market but, the zone is full of opportunities for those who dare to enter. « The market is very open to foreign competition, with the help of the Team France Export helping French companies to develop ». The challenges of today and tomorrow are numerous for the countries of the region: demographic growth, the need for infrastructure, optimization of agricultural production, still in search for solutions.
Demographic growth: Territories in need
East Africa’s main ambition today is to develop its infrastructure. The region, now more than ever, needs modern structures to support its economic growth. Investors can therefore consider projects such as road construction, bridges, airports, seaports, railways…
They also hope to see their private sectors emerge and turn their current manufacturers into real industrial powers. Markets such as transportation, health, and education are also among the main challenges in this region, which is expected to experience a population boom by mid-century. « Uganda’s population will triple. By 2050, it is expected to reach 120 million inhabitants, » says Mourad Chouiqa. The job market will soon be open to the younger generation who grossly inhabit those territories and can potentially become tomorrow’s entrepreneurs. This is what Bpifrance is seeking to develop partly through its Averroès fund of funds. « This investment also allows us to make the link with French companies ».
In April 2023, the European program Eureka also closed a collaboration offer between French and Kenyan companies on the flagship sector of tech.
Tech, agriculture, Energy: Few key sectors for business
Opportunities in East Africa are numerous and varied. It is known to be one of the most fertile regions in Africa, with nutrient-rich soils and a climate favorable to crop growth. Agriculturalbusinesses can find numerous opportunities in crop production and processing, as well as the supply of agricultural equipment. The region also has significant potential for renewable energy, particularly solar and wind energy. Investors can consider renewable energy projects such as solar and wind power plants to meet the region’s growing energy needs.
Information and Communication Technology (ICT) has seen rapid growth in East Africa, with an increase in internet and mobile phone users. Today, 22.6% of Kenya’s communities actively access mobile internet services while 70.7% are covered by 3G/4G, but not connected yet. This represents a significant area to increase affordability and digital literacy in East Africa’s technology hub. According to the International Finance Corporation (IFC), 230 million jobs in Africa will require digital skills by 2030. This translates to 650 million potential education and training opportunities in an estimated $130 billion market.
Businesses can find opportunities in software development, cloud computing services, cybersecurity, mobile applications, and other ICT services. Of course, tourism is high on the list of prosperous markets in East Africa. Known for its wildlife, spectacular landscapes, and white sandy beaches, offering numerous real estate development possibilities all the while making sure to protect the many conservation initiatives that have been established to help conserve and protect endangered species.