Introduction
Welcome to this week's edition of the East Africa Investment, where we explore the continent's most impactful economic developments. The spotlight this week falls on Japan, which is stepping up as a strategic player in Africa's future by expanding trade and investment in key sectors like green energy, infrastructure, and critical minerals. With trade between Japan and Africa reaching USD 25 billion in 2024 and support from initiatives like the LEAD Program and JBIC, Japan is positioning itself as a serious alternative to China in Africa's fast-evolving investment landscape.
Across the East African region, significant events are shaping the path toward deeper economic integration and development. In Tanzania, the government inaugurated the 3.2 km John Pombe Magufuli Bridge, East and Central Africa's longest, dramatically reducing transport time across Lake Victoria and enhancing regional trade. Kenya cemented its leadership in EAC–EU trade, accounting for 43% of total exchange, driven by the newly implemented EU–Kenya Economic Partnership Agreement that grants duty-free access to European markets. Uganda revived its Standard Gauge Railway project with a USD 2.9 billion contract awarded to Turkey's Yapı Merkezi, advancing the regional rail network and lowering future logistics costs. In Rwanda, the government launched a sustainable island tourism strategy under its Blue Economy agenda, aiming to boost eco-tourism and local livelihoods despite facing land and relocation challenges. Meanwhile, Burundi commissioned the first phase of a USD 320 million hydropower project to more than double its energy capacity and expand electricity access for millions. Lastly, Somalia took a major leap toward formalizing its economy with the launch of its first national stock exchange the NSES designed to attract diaspora investment, support local businesses, and unlock long-term capital market growth.
Together, these developments reflect a region that is rapidly reimagining its economic future through bold infrastructure, strategic partnerships, and renewed investor confidence.
Trend of the week
Japan steps up as strategic player in Africa's economic future
Japan is intensifying its efforts to compete with China in Africa by expanding trade and investment across the continent. In 2024, Japan's trade with Africa reached USD 25 billion, with a trade surplus of approximately USD 3 billion. The Japanese government is actively encouraging its companies to explore African markets, especially in key sectors such as critical minerals, green energy, and infrastructure, as part of a broader strategy to reduce reliance on China and strengthen economic partnerships. According to senior officials, Japan's emergence from decades of economic stagnation has revived interest among Japanese firms to pursue overseas opportunities, with Africa being seen as a promising frontier for growth.
To support this ambition, Japan is leveraging public–private partnerships, including initiatives like the LEAD Program and financial backing from the Japan Bank for International Cooperation (JBIC), to fund green and strategic projects across the continent. Leading Japanese companies such as Mitsui, Hitachi, Toyota Tsusho, Mitsubishi, and Komatsu are already investing in areas like sustainable mining, renewable energy, and transport. Notable ventures include Mitsui's stake in a copper mine in Zambia and Hitachi's rollout of hybrid trucks aimed at reducing carbon emissions in the mining sector.
Although Japan's current foreign direct investment in Africa accounts for just 0.5% of its global FDI portfolio, the country is determined to scale up its presence. With declining Western aid and growing competition in the region, Africa offers Japan a timely opportunity to diversify its economic footprint, strengthen global supply chains, and present a credible alternative to China's dominant influence. Japan's renewed engagement is positioning it as a strategic partner in Africa's development and a serious player in the continent's evolving investment landscape.
Tanzania
Tanzania unveils East Africa's longest bridge over Lake Victoria
Tanzania has inaugurated the John Pombe Magufuli Bridge, a monumental 3.2 km extradosed cable‑stayed structure spanning Lake Victoria between Kigongo and Busisi. Fully financed by the Tanzanian government at an estimated cost of USD 260–300 million, it is now the longest bridge in East and Central Africa. Constructed by Chinese firms CCECC and CR15B, the project commenced in late 2019, experienced minor delays due to COVID‑19, and was completed in October 2024. The official inauguration was held on 19 June 2025 by President Samia Suluhu Hassan. Replacing a ferry service that previously took up to three hours, the bridge has cut travel time across the Mwanza Gulf to under five minutes by road. With two vehicle lanes and pedestrian walkways, it is expected to accommodate over 1,600 vehicles daily, significantly improving freight, commuter, and cross-border movement. Strategically located along the T4 trunk road, the bridge connects Tanzania to Uganda, Rwanda, Burundi, and the Democratic Republic of Congo (DRC), forming part of a broader 90 km corridor that includes upgraded feeder roads to Sengerema and Kamanga. Economically, the bridge is projected to lower transport costs for mining operations by 10–15% and boost fisheries exports by approximately 12% over five years. It has already created more than 1,200 jobs during construction and facilitated skills transfer to local engineers. Beyond transport, the bridge strengthens logistics, trade, and regional integration. It also reflects Tanzania's emphasis on green infrastructure, with environmentally sensitive cofferdam techniques used during construction. The Magufuli Bridge is more than a physical structure it is a transformative force for the Lake Zone economy, unlocking opportunities in agriculture, mining, fishing, tourism, and trade. It positions Tanzania as a pivotal regional hub and stands as a lasting legacy of President Magufuli's vision and President Suluhu's commitment to infrastructure-led development across East Africa
Kenya
Kenya leads EAC trade with Europe, driving 43% of total exchange
Kenya plays a leading role in the East African Community's trade relationship with Europe, accounting for 43% of total trade between the EAC and the European Union and 45% of EU investment in the region. In 2024, trade between the EU and the EAC reached USD 8.85 billion, with Kenya firmly at the center. Kenyan exports to Europe are predominantly agricultural and horticultural products, including coffee, cut flowers, avocados, tobacco, cocoa beans, and fish fillets. In contrast, imports from the EU mainly consist of machinery, chemicals, foodstuffs, and wood products. A major catalyst for this growth has been the EU–Kenya Economic Partnership Agreement (EPA), signed in December 2023 and effective from 1 July 2024. The EPA grants Kenya duty-free, quota-free access to EU markets and includes landmark provisions on climate protection, labor rights, gender equality, and sustainable development making it the most ambitious trade deal the EU has signed with a developing country. As the only non-least-developed country in the EAC, Kenya pursued this agreement to safeguard its preferential access to the EU and avoid the imposition of export tariffs.
Beyond boosting exports, the agreement is expected to stimulate job creation, attract foreign direct investment, and promote industrial development in Kenya and across the EAC. Its flexible structure allows other EAC member states to join in the future, fostering regional integration and a unified market approach. While most EAC countries already benefit from duty-free access under the EU's "Everything But Arms" initiative due to their LDC status, Kenya's EPA provides enhanced legal certainty and more robust trade-related support. Kenya's leadership in shaping trade policy and its proactive implementation of the EPA position it as a strategic gateway for deepening the EAC's economic ties with Europe. This growing integration anchored in preferential market access, regulatory alignment, and sustainability commitments not only enhances Kenya's global competitiveness but also lays the groundwork for broader regional economic growth and increased investor confidence.
Uganda
Standard gauge railway back on track in Uganda amid regional push
Uganda's Standard Gauge Railway (SGR) project is finally gaining traction after years of delays, with the government securing 19 % of the required financing for the 273-kilometre line from Malaba to Kampala. The project, now under a USD 2.9 billion contract awarded to Turkey's Yapı Merkezi Group, marks a shift from the earlier stalled agreement with China Harbour Engineering. The rail line is part of the broader East African Railway Master Plan aimed at enhancing regional connectivity and trade efficiency. Uganda's progress is closely tied to Kenya's advancement on its own SGR segment, particularly the Naivasha–Kisumu–Malaba route, which remains incomplete. Kenya is currently pursuing a bond deal with China to finance this crucial stretch. Both countries are working to align their timelines and financing efforts to ensure the seamless integration of their railway systems. Uganda is also focused on acquiring funds for land compensation and is exploring syndicated loans to meet the remaining budget needs.
The revived SGR initiative presents a promising opportunity. Improved infrastructure will lower transport and logistics costs, making East Africa a more attractive and predictable environment for investment. The completion of the Uganda-Kenya SGR corridor will enhance trade flows, support industrial development along the railway route, and open up landlocked markets such as Uganda, Rwanda, and South Sudan. Additionally, the involvement of international contractors and financiers' signals growing confidence in the region's large-scale infrastructure projects, offering potential entry points for investment in sectors such as construction, logistics, manufacturing, and real estate. As integration deepens and transport bottlenecks are resolved, the SGR is expected to significantly boost investor confidence in East Africa's long-term growth trajectory.
Rwanda
Rwanda targets tourism growth through sustainable island development
Rwanda is charting a bold path toward a tourism transformation by turning its lake islands into eco-friendly parks, a move aligned with its broader Blue Economy strategy. Led by the Rwanda Development Board (RDB), the initiative aims to harness the untapped potential of the country's 24 lakes and surrounding wetlands by establishing island parks by 2028, positioning Rwanda as a leading destination for sustainable lake tourism in East Africa. This plan forms part of a wider effort to diversify tourism revenues and stimulate economic growth through sectors such as fisheries, hydropower, and water transport. Senators have called for an economic assessment of the islands to guide investment and ensure that development is inclusive and environmentally responsible. By leveraging its natural aquatic resources, Rwanda hopes to attract more tourists, create jobs, and boost local economies.
However, the initiative faces significant hurdles. Land disputes have emerged in areas such as Gihaya in Rusizi and islands in Burera, where residents have accused some investors of failing to adequately compensate them, leading to prolonged grievances. Additionally, the government has been criticized for the slow relocation of families living on disaster-prone islands vulnerable to earthquakes and floods. Senators have urged for a clear relocation plan with specific timelines to maintain public trust in the project. Minister of Disaster Preparedness Albert Murasira acknowledged these challenges, citing limited budgets for prevention and the need for coordinated planning across institutions.
Despite the obstacles, the government remains optimistic. The island parks are intended to complement Rwanda's existing tourism gems such as Volcanoes National Park, Akagera, and Nyungwe Forest, which together attracted over 135,000 visitors in 2023, up from just 24,000 in 2005. The project also supports Rwanda's commitment to environmental conservation by promoting eco-tourism through the development of eco-lodges, nature trails, and cultural heritage sites. Local communities are expected to be at the heart of the project's success, with the RDB pledging to involve residents in the planning and provide training and job opportunities in hospitality, conservation, and tour guiding. If successful, Rwanda's lake tourism model could inspire other landlocked nations to harness their inland water resources for sustainable development, provided the current land, funding, and infrastructure challenges are effectively addressed.
Burundi
Burundi commissions USD 320 million hydropower project to boost energy access
Burundi has commissioned the first phase of a USD 320 million hydropower project funded by lenders including the European Investment Bank, the African Development Bank, the World Bank, and the European Union. The project features two plants, Jiji and Mulembwe developed on small rivers in southern Burundi, with a combined generation capacity of 49.5 megawatts. Jiji was officially commissioned on Wednesday, while Mulembwe is expected to begin operations in the coming months. Currently, only 6% of Burundi's 13 million people have access to electricity, and the country's total generation capacity stands at about 40 megawatts. The new hydropower project aims to significantly improve access to electricity and support growth in key sectors such as health, education, agribusiness, and ICT. Edward Claessen of the European Investment Bank noted that the initiative aligns with the EU's broader goal of expanding clean and sustainable energy infrastructure across Africa to support decarbonisation. The increased energy capacity and improved infrastructure will enhance the overall investment climate in Burundi by reducing operational costs and improving reliability for businesses. This creates a more attractive environment for foreign investors looking to tap into the country's untapped markets and contribute to long-term economic development.
Somalia
Somalia launches first-ever stock exchange to attract investors and boost growth
Somalia has officially launched its first national stock exchange, the National Securities Exchange of Somalia (NSES), marking a historic shift toward formal capital markets after years of economic informality. Unveiled in Mogadishu on June 19, the exchange aims to begin live trading by 2026, offering a platform for equities and Sharia-compliant Sukuk bonds. Initial listings are expected from sectors such as banking, telecoms, real estate, and energy. The move is widely seen as a symbol of Somalia's broader reform efforts and commitment to financial inclusion. Prime Minister Hamza Abdi Barre called the launch a "new dawn" for the nation's economy, while Finance Minister Bihi Iman Egeh emphasized its potential to unlock capital for local businesses and attract investment from Somalia's vast diaspora whose annual remittances exceed USD 1.3 billion. With regulatory frameworks being drafted, the NSES plans to list at least ten companies in its first two years, offering Somali enterprises a rare opportunity to formalize operations and access structured finance. Though challenges persist such as limited regulatory maturity and political risk analysts believe the move represents a powerful signal of resilience and ambition. Regional analysts and neighbouring exchanges have praised the step, likening it to similar liberalization efforts seen in Ethiopia. The exchange not only positions Somalia as a player in Africa's capital markets but also reflects a broader shift from dependency toward long-term, investment-led development. As investor confidence grows and macroeconomic reforms take root, Somalia's economic outlook is projected to improve steadily, with GDP growth expected to reach 3.9% by 2025. In a region where many stock markets still struggle to attract listings, Somalia's bold step could be the beginning of a transformative era for its financial sector and broader economy.
Upcoming event
The Africa Debate 2025: Harnessing Natural Capital for Growth
Date: July 2, 2025
Venue: The Guildhall, London, United Kingdom
Time: 08:30 AM – 6:00 PM (GMT+1)
Agenda:
Panel Discussions on:
- Africa's role in global supply chains
- Mobilising capital for natural resources
- Industrialisation and renewable energy
- Digitalising natural capital
- Breakout Sessions & Sector Spotlights on energy, infrastructure, mining, agribusiness, and technology
- High-Level Networking Sessions
- Investor Roundtables & Private Sector Dialogues
How to register:
Online Registration: Visit www.investafrica.com/theafricadebate
Who should attend:
- Government representatives and policymakers
- International and Africa-focused investors
- Corporate executives and entrepreneurs
- Development finance institutions and commercial banks
- ESG, sustainability, and infrastructure specialists
- Private equity and sovereign wealth fund managers
- Professionals in mining, energy, agriculture, tech, and logistics
Key features:
- Over 700 high-level attendees from more than 50 countries
- Interactive panel discussions and fireside chats with global thought leaders
- Access to exclusive roundtable discussions and B2B matchmaking
- Strategic insights into Africa's green industrialisation agenda
- Networking opportunities with top-tier investors, CEOs, and ministers
- Focused conversations on natural capital, climate resilience, and innovation
Opinion of the week
"If you look at the population growth and the urbanization in Africa, it is just the beginning of what
could be the next China in terms of consumption and business potential.
Aliko Dangote – Nigerian businessman
Conclusion
As these developments unfold across East Africa, a clear trend is emerging: the region is not only embracing transformative projects but is also attracting diverse global partners' eager to participate in its growth. From Japan's renewed engagement to ambitious infrastructure rollouts and pioneering financial reforms, East African nations are steadily positioning themselves as competitive, resilient, and forward-looking economies. While challenges remain from financing gaps to governance hurdles the momentum is undeniable. The convergence of strategic partnerships, regional cooperation, and targeted reforms is laying the foundation for a more integrated, prosperous, and investment-ready East Africa. As always, we'll continue tracking these shifts to keep you informed and ahead of the curve in this dynamic landscape.
Resources
The East African (2025)
https://www.theeastafrican.co.ke/tea/business-tech/tanzania-leaps-across-lake-victoria-mega-magufuli-bridge-5092682
The East African (2025)
https://www.theeastafrican.co.ke/tea/business-tech/japan-s-plan-to-give-china-a-run-for-its-money-in-africa-5095354
The East African (2025)
https://www.theeastafrican.co.ke/tea/business-tech/kenya-accounts-for-43pc-of-eac-trade-with-europe-5094568
The East African (2025)
https://www.theeastafrican.co.ke/tea/business-tech/uganda-sgr-plan-on-track-as-kenya-pursues-china-bond-5089648
Somali magazine (2025)
Rwanda Eyes Tourism Boom from Island Parks in Blue Economy Push
Reuters (2025)
https://www.reuters.com/sustainability/climate-energy/burundi-commissions-first-phase-320-mln-power-project-2025-06-25
News central (2025)
New Stock Exchange Marks Somalia's Drive for Formal Economy
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