Kenya receives the highest amount of foreign direct investment (FDI) from Tanzania out of all the member states within the East African Community (EAC).

Over the past six years, investors from Dodoma have invested a total of $72.45 million in Nairobi, underscoring the increasing attractiveness of Kenya’s economy for both local and international investors. This trend persists even as trade disputes between Tanzania and Kenya continue due to various non-tariff barriers (NTBs).

The latest information provided by the EAC Secretariat indicates that Dodoma was the leading investor in Kenya between 2018 and 2023, having committed a total of $72.45 million across 19 initiatives. This was followed by Uganda and Rwanda, which each contributed investments amounting to $36.91 million and $3.69 million, respectively.

Based on the information provided in the 2023 EAC Trade and Investment Report, Burundi and the Democratic Republic of Congo (DRC) invested $2.01 million and $250,000 in Kenya, respectively, over the reviewed timeframe. Additionally, South Sudan contributed an investment of $190,000 during this same period.

Modern Modifiers, Taifa Energy agreements boost Kenya’s Foreign Direct Investment. Nonetheless, the principal investments in Kenya originated globally, injecting an impressive $3.75 billion into the nation’s economy over this timeframe.

Investors primarily focus their funds on crucial areas such as manufacturing, transportation, communications, and storage, along with finance and insurance industries.

Other sectors included real estate, business services, agriculture, fisheries, forestry and logging, wholesale and retail trade, hospitality and tourism, as well as construction.

In total, projected investments within the EAC region fell by 5.6% to $567.17 million in 2023 from $600.78 million in 2022, as indicated in the report. This drop was accompanied by a decrease in the number of projects, which went down to 72 from 76 during this timeframe.

Uganda received the highest amount of intra-EAC investments at $280.74 million, although this marked a decline from $391 million in 2022; Burundi came second with $155.18 million.

Intra-East African Community investment projects in Burundi grew from two to four, with their total value rising from $1.9 million in 2022 to $155.18 million in 2023.

Rwanda’s investments within the EAC saw an increase to $55.16 million from $46.78 million, with the project count going up to 18 from 15.

The report indicates that Kenya’s intra-East African Community (EAC) investments decreased to $1.32 million in 2023 from $22.6 million in 2022, whereas those for Tanzania dropped to $74.77 million from $138.5 million during the same timeframe.

Even though Tanzanian investors are increasingly interested in Kenya’s economy, both nations continue to grapple with intermittent trade disagreements centered around non-tariff barriers (NTBs). These issues are hindering commerce between the two countries.

In 2024, both nations agreed to tackle at least 14 non-tariff barriers after a meeting between President William Ruto and Tanzania’s president, Samia Suluhu, took place in 2023.

The meeting addressed 14 topics—six originating from Tanzania and eight from Kenya—and offered guidance on resolving them. Nonetheless, out of these 14 points, only three were completely settled.

Tanzania persists in refusing Kenya permission to import poultry and related goods such as day-old chicks, hatching eggs, and meat.

A few days ago, Dodoma imposed new protective measures on eggs, dairy products, meat, and confections like biscuits in Nairobi. This move violated the regulations of the EAC customs union and reduced export revenues.

The fresh tariff war threatens to reopen another round of on-and-off frosty trade ties between the two countries.

The Kenya Association of Manufacturers (KAM) stated that Dodoma has imposed a 25 percent excise duty on exported hatching eggs heading to Kenya, which goes against the principles of the East African Community (EAC) Customs Union.

Kenya and Tanzania have frequently engaged in ongoing trade disputes due to various tariffs and non-tariff barriers, leading to interventions from their relevant government departments and occasionally from Heads of State.

Despite tiffs over trade barriers data shows Tanzanian investors still consider Nairobi a worthwhile destination.

Read: Ruto initiates construction of $130.5 million LPG facility in Mombasa. Various entrepreneurs from Dodoma have significantly invested in Kenya, with some purchases involving Kenyan businesses.

Notable Tanzanian investors in Kenya include Rostam Aziz, whose company Taifa Gas is constructing a multimillion-dollar cooking gas plant with a capacity of 30,000 tonnes along with storage facilities in Mombasa valued at Ksh16.9 billion ($131 million). Another investor, Ally Awadh, is developing a comparable yet slightly smaller facility capable of holding up to 10,000 tonnes.

Mr. Awadh founded Tanzania’s Lake Oil, which purchased the petroleum retail arm of Kenya-based Hashi Energy in 2017 for an unspecified amount.

The family of Tanzanian businessman Abdallah Nahdi via Amsons Group has similarly secured Bamburi Cement in a transaction valued at approximately $180 million.

In 2017, Tanzanian investors Aunali and Sajjad Rajabali acquired 30.2 million shares, representing a 2.06% ownership interest in Kenokobil, an oil marketing company, which elevated them to become among the key stakeholders of the firm.

In 2016, Tanzania’s Bank M became the initial financial institution from a neighboring nation to acquire control of a Kenyan entity when it obtained a 51% share in Oriental Commercial Bank. This information was provided by SyndiGate Media Inc.
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