The East African countries of Kenya, Tanzania, and Uganda collectively drew over $13.3 billion in foreign direct investment (FDI) in 2022, showcasing a significant economic boost and the creation of thousands of job opportunities, according to the latest report by Ernst & Young, a prominent business advisory firm.

Uganda emerged as a standout performer in the region, recording the highest investment influx at $10.2 billion. This surge in investments led to the creation of approximately 6,300 jobs, positioning Uganda as a focal point for international capital.

Kenya observed a remarkable 117 percent increase in investment inflows, attracting $2 billion in capital investment and generating 7,819 job opportunities. The sectors benefiting most from these investments were business services, technology, transportation, and warehousing.

In Tanzania, FDI spiked by 133 percent, regaining pre-Covid-19 pandemic levels. The nation witnessed 21 projects valued at $1.3 billion, resulting in 4,566 new jobs. Key investments in Tanzania involved Burundi-based Intracom’s plans for a $250 million integrated cement plant in the Kigoma region and UAE-based Masdar’s agreement with Tanzania Electric Supply Company Ltd (Tanesco) for renewable energy projects.

France emerged as a prominent investor in Tanzania, particularly in the oil and gas sector, while Kenya also made substantial investments in the consumer sector of the country.

However, data for Rwanda, Burundi, and South Sudan was not available in the report. In Ethiopia, FDI witnessed a significant decline in recent years, falling from 34 projects in 2019 to merely six in 2022.

The report titled “A Pivot to Growth” highlighted Kenya’s dominance as the region’s top destination by the number of projects, while Uganda received substantial capital investment from France in the oil and gas sector.

Although Africa reclaimed its position as a top investment destination in 2022 after grappling with attracting investments during the pandemic, the report stressed the need for ongoing efforts to enhance the continent’s investment appeal for sustained growth.

However, challenges loom ahead with rising interest rates impacting growth and potential economic stability. The report cited high public debt levels across key African economies and inflation concerns, warning that increased interest rates could restrain investor appetite and hinder growth opportunities, potentially slowing down Africa’s recovery from the pandemic’s impact.

Central banks across Africa are navigating these challenges by increasing interest rates to manage inflation and currency values, although this policy could potentially stifle growth and investment opportunities across the continent.