The recent oil discovery in Uganda has led to an increase in Foreign Direct Investment (FDI) inflows to the country. According to the data that the United Nations Conference on Trade and Development released recently, Uganda FDI increased by 92.51% to $ 1.721 billion in 2012 down from $ 894 Million in 2011.
The data indicates that Uganda topped the region in attracting FDI last year closely followed by Tanzania which was all a result of increased investments in the Uganda’s Oil fields and Tanzania’s Gas reserves.
The data shows that FDI to each of the two countries was seven times more than what Kenya received in 2012, a lag analyst blamed on unnecessary political tensions and delays in removing cumbersome licensing procedures.
For instance while Tanzania attracted $ 1.706 billion in 2012, a 38.81% increase from previous year’s $ 1.229 billion, on the other hand, Kenya’s FDIs dropped by 27.04% to 529 million from $ 355 million.
Elsewhere Rwanda rose by 50.94% to $ 160 million last year from $ 106 million, while Burundi which trailed the five East African countries, attracted $ 1 million a 66.67% decrease from $ 3 million in 2011. The EAC countries received a combined $ 3.9 billion in FDIs last year, a 48.71% rise from the $2.6 billion registered in 2011.
Interest in the EAC economies among foreign investors is expected to increase in the remaining part of the year, given the rising confidence in the economy, said UNCTAD in its World Investment Report 2013.