In Burundi, recent seismic and magnetic surveys have indicated that there may be oil under Lake Tanganyika and the Rusizi river plam.
Kenya’s petroleum potential lies in four largish sedimentary basins: Anza, Mandera, Tertiary Rift and Lamu.
In Rwanda, there is hydrocarbon potential existing in North Western Rwanda and deep under Lake Kivu.
In Tanzania, significant gas discoveries have been made on the coastal shores of Songo Songo Island and Mnazi Bay, and commercial exploitation for power generation began in July 2004. Petroleum seismic coverage in the public domain is approximately 52,000 kms, 52% offshore and 48% onshore, including the interior rift basins.
In Uganda, a number of mining companies have taken up licenses in the mining sector. Oil was finally discovered in Western Uganda in 2006 after 17 years of exploration. This discovery is set to boost the country’s economy significantly.
The EAC organises the East African Petroleum Conference after every two years. The last one was held in February 2015. Among resolutions made include the need to develop the Partner States’ petroleum potential by harmonising policies and legal and fiscal regimes pertaining to petroleum exploration.
The EAC countries are richly endowed with a variety of mineral resources.
Burundi is well endowed with deposits of nickel, vanadium, cassiterite, colombo-tantalite, gold, uranium, rare earth oxides, peat, cobalt, copper, platinum, hydropower, niobium, tantalum, gold, tin, tungsten, kaolin and limestone.
Kenya has four belts of minerals - the gold green stone belt in western Kenya, which extends to Tanzania; the Mozambique belt passing through central Kenya, the source of Kenya’s unique gemstones; the Rift belt, which has a variety of resources including soda ash, fluorspar and diatomite; and, the coastal belt, which has titanium.
Rwanda has deposits of cassiterite, a tin ore, which is a very important ingredient of electronics components. The mineral is also found in Walikale, in DRC’s Northern Kivu Province, a part that borders Rwanda in the east. Other potentially profitable minerals include wolframite, columbite-tentalite, amblygonite and tantalite (colttan). Gold has also been explored in some parts of the country. Some semi-precious stones including tourmaline, topaz, corundum, chiastolite, amethyst, opal and agate have been discovered.
Tanzania has a wide variety of minerals including diamonds, gold, base metals, gemstones (including the unique Tanzanite) and a variety of industrial minerals (such as phosphates, mica, gypsum, limestone, graphite, quartz and vermiculite) that have a wide range of applications in ceramics, pottery, brick and tile-making, and glass manufacture as well as nickel, cobalt, copper, apatite, niobium, iron ore and coal.
Uganda also has a variety of mineral resources including copper, cobalt, tin, iron ore, tungsten, beryllium, limestone, phosphates, salt, clays, feldspar, diatomite, silica sand, glass, sand gravel, and construction materials such as granites and gneisses.
Investment opportunities exist in mining stone for the construction and building industry, phosphates for agriculture, salt for domestic and chemical uses, iron ore for the iron and steel industry, kaolin for leather tanning and pharmaceuticals, and silica sand and trona for glass manufacture; exploration and development of mineral deposits including oil, gold, copper, cobalt sulphide and hematite iron.
Manufacturing offers a wide range of opportunities in the EAC Partner States. The region is currently a net importer of manufactured products such as machinery and transport equipment. By offering incentives such as zero rating of various raw materials, and through various manufacturing incentive schemes, the EAC Partner States have been trying to promote manufacturing as a way of diversifying their economies.
Textiles and Apparel
The EAC Partner States have a history of textile manufacture and are known for the production and export of handpicked cotton. The manufacture of garments has been revitalised since the signing of the African Growth and Opportunity Act in the United States, which allows EAC Partner States except Burundi (since 1 January 2016), along with other sub Saharan African countries, market access to the United States.
Investment opportunities thus exist in cotton ginning, production of yarn and finished textiles, marketing and trading in cotton and textiles as well as in cut, make and trim units. Rwanda offers opportunities in development of sericulture and the silk textile industry.
Iron, Steel and other Metals
Opportunities exist in the development of nucleus foundry making precision castings that can then be processed into precision components, aluminium cans, high-strength reinforcement bars, ductile iron rolls, casting sand and moulding. Opportunities also exist for investment in the mining of iron ore to supply the existing steel mills, the production of sponge iron for steel mills and the production of steel products.
Vehicle Parts and Assembly
The number of new motor vehicles registrations in the region has been increasing rapidly over time.
Although some car parts are produced locally, accessories of some of vehicles, especially of European origin, are often lacking in the market. Opportunities exist in the manufacture of components for use by local assemblers and for export to regional markets. Use of bicycles as a mode of transport is widespread in the region, providing opportunities for bicycle assembly.
Electronics
The electronics industry is growing rapidly with a number of firms engaged in assembly, testing, repair and maintenance of electronic goods. Investment potential exists particularly through Manufacturing Under Bond and Export Processing Zones programmes in the production of consumer electronics such as TVs, VCRs, disk drives, etc. as well as telecommunications equipment and support industry items such as cables, cords, die casting, metal plating, etc.
Electrical Equipment
Investment potential can be found in the production of motors, circuit breakers, transformers, switch gears, irrigation pumps, capacitors, resistors, insulation tapes, electrical fittings and integrated circuit boards for both regional and international markets.
Plastics
Opportunities exist in all five Partner States in the production of plastic articles to meet the domestic demand as well as demand in the broader region.
Chemicals
Investment opportunities can be found in the production of Polyvinyl Chloride resin from ethyl alcohol, formaldehyde from methanol, melanine and urea, mixing and granulating of fertilisers, cuprous ox chloride for coffee bean disease, caustic soda and chlorine based products, carbon black, activated carbon, precipitated calcium carbonate, textile dyestuff, ink for ball points and gelatin capsules, among other things.
Pharmaceuticals
Investment opportunities exist in the manufacture of drugs for the treatment of various tropical diseases, the provision of modern family-planning services, and the manufacture of medical equipment and sundries (surgical cotton/gauze, sanitary pads, syringes, bandages, infusion syrups, oxygen). The rich biodiversity of the region also provides an opportunity in the processing of herbal medicines. The processing of pyrethrum extracts and the production of vaccines, antibiotics and vitamins also offer investment opportunities.
Beverages
The main beverage production activities in the region include coffee roasting, tea processing, and the production of soft drinks and alcoholic beverages. The region has a competitive advantage in processing these products because it produces most of the raw material used in this industry including fruits, barley, coffee and tea. Investment in this sector has been increasing, especially in producing soft drinks. The demand for beverages in the region is on the increase. Investment opportunities exist in production, targeting both local and export markets.
Packaging
The packing industry includes all forms of printed paper and plastic packaging, woods, foil and glass packaging. It is a strategic sub-sector as it supports other industries (especially pharmaceuticals, horticultural products, beverages, edible oil, fish, and dairy products) in marketing and distribution generally, as well as in international trade. The developments in the manufacturing sector, especially the production of consumer goods, explain the increased demand for plastic packaging items.
Investment opportunities exist in the production of glass containers (raw material available), tin cans /boxes, corrugated cases (shuffle), cartons and labels, flexible packages, rigid plastics, and thin-walled plastics.
From building roads, railways and port facilities, to installation of air navigation infrastructure, there are opportunities aplenty for investment in infrastructure in the EAC region.
The EAC Partner States have agreed to develop common policies with respect to infrastructure. The region will also benefit from the NEPAD infrastructure development programme covering transport, energy, ICT, and water and sanitation.
At the national level, each Partner State is implementing restructuring programmes, which aim at reducing government involvement in commercial activities and encouraging Public-Private Partnerships.
The EAC Partner States opened the telecommunications sector to investors after adoption of liberalisation measures in the 1990s. This has improved communication infrastructure, particularly mobile telephony.
Opportunities abound in the following areas:
Processing accounting data;
Incipient e-business services;
Printing and publishing media and television;
Logistics management;
ICT infrastructure and training, including extension to rural areas;
Provision of Internet-related hardware and software;
Provision of value-added services in voice and imaging products;
Quality engineering, building and architectural design services are readily available in the region. With an increase in population, investment opportunities exist in the provision of:
Low-cost housing to cater to the needs of growing populations in urban and peripheral areas;
Manufactured prefabricated concrete systems and other fittings for the building industry and the processing of non-metallic minerals to make sanitary fittings, tableware, floor and wall tiles, glass, lime, cement, glazes, etc.; and
Mortgage services, although land legislation can make it difficult to engage in mortgage lending.
The climate, the soil and the existing water supplies in the EAC region provide a base for production of high quality horticultural produce in a natural environment.
The main export product is cut flowers, whose biggest market is the EU. Major horticultural produce in the region includes pineapple, passion fruit, papaya, avocado, mango, orange, passion fruit, apples, bananas, raspberries, beans, asparagus, snow peas and chillies.
Opportunities abound in the following areas:
Production and export of horticultural produce (fruits, flowers and vegetables);
Production of propagation materials;
Establishment of soil-analysis services;
Manufacture of greenhouse plastics;
Production of inputs such as fertilisers, herbicides and pesticides;
Production of packaging materials;
Provision of cold-storage facilities as well as air-cargo transport to foreign markets; and
Provision of accreditation services to meet market and regulatory requirements.
Health care in the Partner States comprises hospitals at district, provincial and national levels and healthcare centres / dispensaries at lower levels. Similar services are also provided by non-governmental organisations and the private sector.
Investment opportunities include the following: the establishment of hospitals and other health units, and modern testing facilities; training of medical personnel in specialised medical care; the manufacture of drugs, hospital equipment and furniture; and, the provision of family planning facilities and services.
The East African region is endowed with some of the largest freshwater lakes in the world, which harbour substantial resources for fishery. Lake Victoria, shared by three EAC Partner States: Kenya (6%), Tanzania (49%) and Uganda (45%), covers a surface area of 68,000 km2 and the shoreline length is 3,400 km.
The lake is home to about 350 species of fish. The commercially important fish species of Lake Victoria are Lates niloticus (Nile perch), Oreochromis (Tilapia) and Rastrineobola argentea (Dagaa). The other species include Alestes, Barbus, Clarius, Haplochromis, Labeo, Mormyrus, Protopterus, Schilbe and Synodontis.
Lake Victoria and other lakes such as Lake Turkana (in Kenya), Tanganyika (in Tanzania) and Kyoga (in Uganda) provide ample opportunity in fishing, fish processing and fish by-product processing, as well as in the supply of fishery-related equipment and storage infrastructure such as fishing nets, cooler transporters, processing equipment, packaging materials, and freighters and cargo planes.
Other investment opportunities include fish farming (aquaculture) and establishment of accredited testing laboratories.
The EAC coastline extends for 2,104 km, including some 680 km in Kenya and some 1,424 km in Tanzania.
The marine resources that can be exploited include crustaceans, molluscs, Dermasal fish species, Pelagic fish species, and tuna and tuna-like species.
Other investment opportunities include deep-sea fishing, the provision of deep-sea fishing vessels, storage infrastructure, and the processing of marine fish and related by-products.
The Partner States are harmonising their banking acts so as to harmonise and eventually integrate their financial systems.
Investment potential exists in establishing commercial banks as well as other services like brokerage, investment consultations, asset valuation & sales and bank assurance, asset management, real-estate financing, lease finance, agricultural finance and advisory services. The rapid growth of the informal sector offers opportunities in the provision of credit and related service. Demand for insurance services has also risen.
The opportunities in Partner States include the following:
Burundi
Financial sector is insufficient for the economy. Investors are welcomed in all areas.
Kenya
Investment in the SME loan market; and
Building capacity in commercial banks to serve smaller enterprises.
Rwanda
Establishment of more commercial & agricultural banks in rural areas;
Competitive loan facilities to agricultural sector and investors in the industrial sector;
Investment banking for advisory services and wholesale banking, including Trust funds and Pension funds;
Promoting or arranging underwriting of issuance of securities;
Housing bank sub-sector in mortgage financing to encourage collateralisation of loans and mobilisation of savings;
Prospects for development of insurance given their complementary role in improving the population’s income levels, and the promotion of trade and industry; and
Direct services like stock-broking, public offering of securities, etc.
United Republic of Tanzania
The capital markets and securities; and
Banking and the secondary market sector, which is still at an early stage of development with little activity.
Uganda
Establishing commercial banks in upcountry urban and rural centres;
Development banks required to provide term loans;
Merchant banking for advisory services and wholesale banking as well as underwriting of securities;
Mortgage financing to encourage collateralisation of loans and mobilisation of savings;
Brokerage, sales and tracking services firms with international experience and network;
Establishing of investment banks & fund management;
Discount houses for making a market for securities, thereby developing a secondary market for those securities;
Provision of re-insurance services to encourage retention of premiums as well as building of capacity in the industry;
Risk management, claims settling agents and provision of private pension funds;
Reinsurers and reinsurance brokers; and
Provision of life policies and other innovative assurances like agriculture and medical schemes
Capital Markets
In Article 85 of the EAC treaty, the Partner States agreed to implement a capital development programme and create an environment conducive to the easy movement of capital within the Community.
Capital Markets are regulated and supervised by state agencies. In Kenya, it is the Capital Markets Authority, in Tanzania the Capital Markets and Securities Authority and in Uganda the Capital Markets Authority. In addition to performing regulatory and supervisory functions, the authorities license brokers and investment advisers.
East African Securities Regulatory Authority helps member states develop capital markets institutions, facilitates exchange of information to help enforce laws and regulations in the different countries, besides conducting cross-border surveillance and public education awareness in addition to co-coordinating technical assistance and promoting consultancy within the region.
