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East Africa lures investors

East African countries are aggressively courting foreign investors to revive their textile and apparel industries. Uganda for one is engaging widely with foreign investors through diplomacy. The US is a critical market for Uganda.

While Uganda faces several infrastructural and operational challenges, this landlocked country has a plentiful labor supply and a growing middle class. Also, Uganda is working to lower the cost of doing business in the country, aiming to leverage export market benefits created by the US African Growth and Opportunity Act and the US- East African Community Trade and Investment Framework Agreement.

Kenya has allotted land in its capital Nairobi for an upcoming textile manufacturing hub. With its steady overall growth (4.6 per cent in 2013 and 4.7 per cent in 2012), Kenya is offering opportunities in apparel exports. It’s giving investors ten years’ tax free to recoup their investment. Meanwhile Kenya continues to court Chinese investment. In May, Kenya signed 15 bilateral project and political initiative agreements with China, including investments in the key Nairobi to Mombasa railway line.

Kenya, Mauritius and Ethiopia are currently showing the most growth in terms of sourcing by US companies. While African suppliers are sometimes slower in delivery times than other regions, they offer good quality products, and effectively anticipate which products will be in demand by western buyers.