Breaking investment roadblocks in East Africa

In a recent interview on CNBC Africa, Christophe Charlier, Chairman of Renaissance Capital, discussed the investment landscape in East Africa and highlighted some of the challenges and opportunities in the region. According to Charlier, last year saw a decline of 3% in foreign direct investment in East Africa, dropping to $7.6 billion. This decrease was attributed to the Fed's aggressive foreshadowing of interest rate hikes, which affected emerging and frontier markets globally. However, Charlier expressed optimism that stability in the Fed's policy in the coming year could lead to increased interest in East Africa and other emerging markets. Despite the decline in foreign direct investment, East Africa remains one of the fastest-growing economies on the continent. Charlier explained that while FDI numbers reflect investments made in previous years, growth rates indicate the impact of those investments. He specifically pointed to Ethiopia and other larger economies in the region as recipients of significant investments in recent years. Charlier emphasized the importance of continuity in investment inflows to sustain economic growth in the region. Rwanda and Kenya were singled out by Charlier as countries with promising investment prospects. He praised Rwanda's efforts to improve its business environment and attract foreign investors, noting President Kagame's focus on industrialization and regional integration. Charlier highlighted the need for Rwanda to export to neighboring countries like Uganda and Kenya and stressed the importance of regional cooperation for economic development. The discussion also touched on the African Continental Free Trade Area (AfCFTA) and its potential impact on foreign direct investment. Charlier underscored the importance of infrastructure development and value addition to facilitate intra-Africa trade. He cited the example of countries like Cote d'Ivoire and Ghana, urging them to move beyond raw material production and focus on producing finished or semi-finished goods to stimulate trade within the continent. Looking ahead, Renaissance Capital is gearing up for its annual North Africa Invest conference in Cape Town. The event brings together South African institutional investors with North African companies from Egypt to Morocco to showcase investment opportunities in the region. Charlier highlighted the progress in Egypt and expressed excitement about the growth prospects in North Africa. In conclusion, while challenges such as fluctuating interest rates and regional disparities in industrialization persist, East Africa remains a dynamic investment destination with significant potential for growth. Charlier's insights shed light on the evolving investment landscape in the region and the opportunities that lie ahead.