Foreign Investors in East Africa Avoid Agriculture like Plague

Foreign Direct Investment into East African countries increased marginally between 2015 and 2021, primarily driven by investments from China and India.

However, according to the East African Business Council, the majority of the Foreign Direct Investments have been directed towards the manufacturing, construction, and services sectors.

This means the bedrock agricultural sector, despite employing over 80 percent of East African Residents, is being snubbed by foreign investors.

The East African Business Council (EABC) in partnership with Sequa GmbH under the Business Scouts Fund and GIZ Business Scouts for Development has thus launched a study profiling investment opportunities in selected agricultural value chains in the EAC.

The study aims to address the region’s low foreign direct investment in agriculture, its reliance on food imports, and its vulnerability to global shocks.

These findings of the study and investment opportunities were revealed during the webinar on profiling investment opportunities in selected value chains in the EAC, which was aired from the Northern Tanzanian City of Arusha.

The GIZ Business Scout Fund – EABC project seeks to enhance the competitiveness of the agri-food industry and mitigate the impact of global crises to improve food security in the EAC region.

The webinar brought together high-level policy decision-makers and over 60 agricultural value chain actors to validate the study.

The Executive Officer of the EABC John Bosco Kalisa, expressed gratitude to the GIZ Business Scouts for Development and Sequa GmbH for their partnership in conducting and validating the study.

Kalisa emphasized the importance of scaling up the agricultural sector’s performance to boost intra-regional trade and investment.

He highlighted the need for deliberate action to build agricultural resilience in the region, particularly in response to global crises. He also recommended the use of a policy mix to provide agricultural insurance, develop storage facilities, and address labor migration to urban areas.

On his part, representing the GIZ Business Scouts for Development Michael Kleinbub, commended the efforts of the business community in addressing food security issues.

He pledged the support of the Business Scouts for Development in facilitating engagements through programs and public-private partnerships as well as providing financial and technical support to companies investing sustainably in developing or emerging markets.

The study reveals significant potential for developing value chains in Wheat Grains, Edible oil, Fertilizers, Tubers, and Leguminous plants within the EAC.

However, the sector’s performance is hindered by challenges such as low production and productivity, technology development and transfer, post-harvest management and storage, trade and marketing, and policy-related issues.

The webinar emphasized the need for collaborative efforts among EAC Partner States, Development Partners, and the Private Sector to address the aforementioned challenges.

It was noted that increased investment in the value chains would create employment and increase resilience against agri-food disruptions amid global shocks.

The Acting Investment Promotion Manager at the Tanzania Investment Centre Innocent Kahwa, presented an overview of selected agribusiness investment opportunities in Tanzania.

The Business Council plans to showcase the study’s results on investment profiles on digital platforms to ease access to information on investment opportunities in the EAC bloc.

EABC will also engage value chain actors in joint ventures and capacity-building initiatives under the project.