East Africa continues to be a sought after investment destination, with each country offering different opportunities. While Kenya has been described as one of the fastest growing economies in Africa, Tanzania and Rwanda are growing at an equally high pace, says Mr Jonathan Yach, CEO and Head of East Africa Operations at Broll Kenya, a property services company.
Mr Yach says the company anticipates that these three countries will remain stable due to ongoing government interventions. Furthermore, while Nigeria, followed by South Africa are the largest economies in Africa, Kenya was recently rebased and is now classified as the ninth largest African economy (previously ranked 12th) mainly due to agriculture, Information and Communication Technology (ICT) and the burgeoning real estate sector.
However, the region still has a number of challenges affecting its member countries’ economic growth. These include high unemployment rate (around 40%), sluggish demand for exports as well as declining manufacturing and production resulting in the widening of current account deficits.
Investments in the region
Mr Yach points out that Kenya remains the economic powerhouse in East Africa when compared to Uganda, Rwanda and Tanzania. A report by the World Bank earlier this year ranked Kenya as one of the fastest growing economies in Africa with GDP growth expected to rise from 5.4% in 2014 to 6% to 7% over the next three years due to increased public investment in infrastructure and energy.
Although Uganda’s GDP is stable, its real estate sector lacks stability due to the current oversupply of office space. Mr Yach says in Tanzania, land ownership remains restrictive with ownership vested in the government which impacts on investments as foreign investors do not have full reign to grow their businesses.
The upgrading of the rail infrastructure will increase Kenya’s importance as the regional leader. The construction of the standard gauge railway will service landlocked countries such as South Sudan, Congo, Uganda and Rwanda, linking them with the Port of Mombasa. “We anticipate improved and faster delivery of goods as the current road networks remain a great challenge to transporters in the country and cross border,” says Mr Yatch.
With the discovery of oil and gas in Kenya, Tanzania and Uganda, we foresee more international investors in these oil, which bodes well for the economy and for the real estate sector.
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