FDI investment trends a mixed bag

Figures released by the United Nations Conference on Trade and Development (Unctad) show foreign direct investment (FDI) inflows to the Comesa region’s 21 countries during 2024 increased by 154%, hitting an all-time high of $65 billion. This contrasts with an 11% downturn in global FDI flows during the same period, alongside a subdued global outlook for 2025, according to the Comesa Investment Report 2025. Comesa is the Common Market for Eastern and Southern Africa. Ethiopia, Kenya, Uganda and Tanzania have led East African countries in FDI inflows over the past five years (2021-2025), based on Unctad and Comesa data. Unctad analysis found strong and underlying investment momentum across eastern and southern Africa. Excluding Egypt’s Ras El-Hekma megaproject, FDI inflows to Comesa would still have expanded by 16% – a sign of overall resilience and investor confidence across the region, according to Unctad. Egypt is included in the East African community by a number of organisations. Top performer in 2024 was Ethiopia, followed by Uganda, Kenya, Tanzania and Rwanda. Cumulative regional figures do not, however, tell the whole story. Much more needs to be done to secure sustainable investment and economic growth. While FDI inflows into Ethiopia grew by 22%, from $3.3bn in 2023 to $4bn in 2024, greenfield investment contracted by 75% in value, and there were no cross- border mergers and acquisitions. “This mixed picture suggests that, although multinational enterprises continue to maintain a strong presence in Ethiopia, new large-scale investment commitments remain subdued,” states the 2025 Comesa investment report overseen by Nan Li Collins, director, Division on Investment and Enterprise of Unctad. Uganda’s FDI inflows, mainly in the oil and gas sector, increased by 10%, reaching $3.3bn in 2024. There was a modest recovery in cross-border M&A activity, rising from zero to $130 million. However, greenfield investment declined in number and value. On the positive side, foreign exchange reserves rose significantly in 2025, reflecting a favourable external environment, including strong coffee exports and portfolio inflows, according to an International Monetary Fund (IMF) report. Kenyan FDI inflows remained virtually unchanged in 2024, at $1.5bn. However, all other investment indicators declined. Kenya is focused on being the digital economy hub of the region and an African leader. The driving force is a World Bank-sponsored Kenya Digital Economy Acceleration Project launched in March 2023, which is predicted by the latest progress report to lead “multiple investments” in 2026. Tanzaniainvest points out that growth in the country’s FDI of 28.3% to $1.72bn was the fastest in East Africa. Manufacturing accounted for over 40% of investments in 2024 and continued to lead in 2025. Key areas include textiles, pharmaceuticals, cement, steel, beverages and agro-processing. Transport and infrastructure projects include the expansion of the standard grade railway, port upgrades and airport projects. Rwanda reported a 14.4% growth, to $819m. The country’s FDI in 2024– 2025 was driven by strong growth in industry, tourism and infrastructure, boosted by the construction of the Bugesera Airport. ER