The entry of Somalia into the East African Community (EAC) and the re-election of President Felix Tshisekedi in the Democratic Republic of Congo (DRC) are the main factors which, according to the East African Business Council (EABC), will fuel commercial opportunities, in particular in the sectors of tourism, investments in renewable energy, oil, transport and logistics, in Somalia and DRC.
In the tourism sector, John Kalisa, CEO of the EABC, says that the impact of the removal of visas by some EAC countries – now made up of eight members, with an estimated population of 301.8 million citizens – of of which 30% live in urban areas – will likely be felt in the tourism and transport sectors, with expected strong demand for services such as accommodation, food and entertainment.
Kalisa also stated that the development of the oil sector in Uganda – with projects such as the 10 billion dollar Lake Albert Oil Project and the 5 billion dollar East Africa Crude Oil Pipeline (Eacop) – but also investments in renewable energy in Tanzania and Rwanda, as well as transport and logistics in the region will drive intra-EAC trade “and open up new opportunities”.
Specifically, Uganda, rich in agricultural products, is likely to benefit from the expansion of its market in the Democratic Republic of Congo and, beyond Kenya, in Somalia. According to the United Nations Comtrade database on international trade, Uganda exported $67.6 million worth of goods to Somalia in 2020.
Instead, data from the Central Bank of Kenya (CBK) shows that Kenya exported goods worth around $71.7 million to Somalia in the first six months of 2023, a growth of 76% compared to 40.9 million dollars recorded in the same period in 2022. This increase saw Somalia become Kenya’s fifth largest export destination on the African continent, behind Uganda, Tanzania, Rwanda and Egypt, and ahead of DRC and Ethiopia, which previously ranked first.
Kenya’s major banks, Equity and KCB, have also opened offices in the DRC, expanding the services sector in the region since Tshisekedi’s first election in 2019.
Kenya’s exports to the DRC were $135.93 million in 2022, with iron and steel as the main exports, also followed by tobacco, sugars and sweets, soaps, lubricants, waxes, candles, modeling clays and plastics .
Tanzania’s agriculture, renewable energy and gas sectors are also preparing for investment in 2024.
The country has also seen an increase in the use of productivity-enhancing technologies, including mechanization, irrigation, the use of fertilizers and improved seeds. According to Hussein Omar, deputy permanent secretary of the Ministry of Agriculture, in the 2023/24 financial year, Tanzania produced 1.1 million tonnes of raw sunflower, which produced 377,432.79 liters of edible oils. Tanzania is expected to see 6% GDP growth by 2025 and has seen billions of dollars in investment in infrastructure, hydropower, gas and solar projects in recent years. Arusha will also host the Tanzania Energy Cooperation Summit 2024 (Tecs24) from January 31 to February 1 to examine future commercial and generation projects ready to transform the country’s energy sector in the region.
The KPMG company, in an October 2023 survey, ranked Tanzania as the third favorite investment destination in sub-Saharan Africa, after South Africa and Nigeria. Indeed, a first 50 MW on-grid solar plant, a $300 million investment in hydropower, a $42 billion LNG project made up of Shell, Equinor and Exxon Mobil and nearly $7 billion invested in infrastructure, confirm its attractiveness both in Africa and globally. [Da Redazione InfoAfrica]
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