Fast GDP gains are just the start as investors target deeper capital markets and regional value chains.
This article appears in the September 2026 issue of Global Finance Magazine.
East Africa is defying a difficult global environment—and the region’s appeal is not simply that it is growing faster than many of its peers. The more consequential opportunity may lie in converting that growth into productive businesses, deeper financial markets, and investable regional value chains, according to investors and close observers.
The African Development Bank’s East Africa Economic Outlook 2026 report highlights both sides of the moment: substantial infrastructure, industrial, and climate-finance needs, alongside shallow capital markets, high financing costs, and fragmented financial systems.
East Africa “maintained its position as one of Africa’s fastest-growing regions in 2025,” the report found, “with growth estimated to have accelerated to 6.6%, up from 4.3% in 2024.” Foreign direct investment reached some $12.6 billion in 2024 while remittances totaled nearly $12.9 billion: important flows, but insufficient to finance the region’s transformation.
Experts believe the region’s promise lies precisely in closing those gaps. East Africa—and Ethiopia especially—is a “glass half-full and half-empty” story, said Bernard Laurendeau, managing partner at advisory firm Laurendeau & Associates. He sees real strengths in infrastructure, logistics, expanding connectivity, and a young, increasingly tech-literate population.
But foreign investors should look beyond the headline GDP and banking-sector numbers, he added. The priority, he said, is enabling local businesses to start, scale, and exit while improving access to credit and foreign exchange.
Ken Shibusawa, founder and CEO of &Capital, is targeting existing venture-capital opportunities in fintech and embedded finance, healthcare, agriculture, renewables, and education. Tokyo-based &Capital is in the process of raising and closing its first fund, a fund of funds; the African Development Bank and Japanese corporates are to be limited partners.
Kenya offers East Africa’s strongest startup ecosystem, he said, but its relative maturity also makes it increasingly crowded. Tanzania, Uganda, and other neighboring markets may offer less-developed but potentially significant opportunities.
However, capital alone is insufficient, he added. International investors need trusted local partners who can navigate questions of governance, transparency, and rule of law. Regional integration could also improve the investment proposition by creating a larger market with more streamlined regulatory and tax regimes.
Infrastructure Deficit
Another missing ingredient, according to Kohei Muto, founding partner and CEO of Double Feather Partners, is the infrastructure connecting capital, technology, and entrepreneurs. Muto describes DFP’s model as helping early-stage African ventures prepare structurally to receive institutional capital, helping global corporations experiment with African startups at lower risk—via accelerator programs, for example—and creating business models that can generate customers, growth, liquidity, and eventually, exits.
He sees manufacturing, industrial technology, sensors, energy, and mobility as potentially more important for Africa’s next growth phase than fintech alone. Japanese and other international firms, he said, can contribute not just technology but capital and operational expertise, creating two-way co-innovation with African businesses.
Others, like Uganda Association of Artisanal and Small-Scale Miners (UGAASM) CEO Kenneth Asiimwe, maintain that the investment case in East Africa still largely comes down to the resource economy.
Uganda’s gold industry, for instance, illustrates the shift from merely exporting raw materials to domestic processing and value addition. But foreign investors must not assume that capital alone confers control, Asiimwe added; successful investment requires understanding existing producers, local incentives, and the legal framework.
Collectively, investors and close observers point to a more nuanced investment proposition: East Africa’s fragmentation, financing gaps, and infrastructure deficits are not merely risks, but opportunities for capital, technology, and institutional innovation. That suggests the next phase of the region’s story will be judged not by GDP growth alone but by whether growth yields bankable companies, deeper capital markets, deeper regional supply chains, and durable returns on investment.
John Amari is a contributing writer based in Japan.
