Uganda attracted 3.36 billion US dollars in foreign direct investment in 2025, while Kenya received 3.2 billion dollars. According to the United Nations Trade and Development (UNCTAD) foreign investment flows into East Africa increased by 12 per cent to nearly 15 billion dollars.
In its World Investment Report 2026, UNCTAD says Uganda remained among Africa’s leading recipients of foreign investment among least developed countries, with inflows supported by investments in oil refining and battery storage.
Kenya’s foreign direct investment inflows increased from 2.32 billion dollars in 2024 to 3.2 billion dollars in 2025, while Uganda’s rose from 3.12 billion to 3.36 billion dollars over the same period. Rwanda also recorded an increase, with investment inflows rising from 873 million dollars to 967 million dollars.
The figures point to growing investor interest in the region, although the report cautions that global investment remains concentrated in a limited number of countries, sectors and large projects.
UNCTAD estimates that foreign direct investment flows into its East Africa regional grouping rose from 13.02 billion dollars in 2024 to 14.59 billion dollars in 2025.
The grouping extends beyond the East African Community, so the regional figure should not be interpreted as investment into EAC member states alone. Globally, foreign direct investment increased by six per cent to 1.62 trillion dollars in 2025, ending two consecutive years of decline.
However, the recovery was uneven, with investment flows to developed economies growing by 11 per cent, compared with only two per cent growth in developing economies.
Africa received about 70 billion dollars in foreign direct investment, down from an exceptional 94 billion dollars in 2024. UNCTAD attributes much of the previous year’s increase to a small number of large transactions, particularly in Egypt.
Uganda’s investment performance was supported by large projects in the energy sector, which continues to attract substantial international capital across Africa. The report lists a proposed four-billion-dollar investment in the oil and gas sector by United Arab Emirates-based Alpha MBM Investments among the ten largest greenfield projects announced in Africa in 2025.
Greenfield investments involve establishing new operations or facilities in a host country. The four-billion-dollar figure represents estimated expenditure associated with an announced project and should not be treated as money already received by Uganda.
UNCTAD says investment across Africa remains concentrated in energy infrastructure and extractive industries, including oil and gas, liquefied natural gas, mining and renewable energy.
Investment in critical minerals, including copper and cobalt, is also attracting interest as demand grows for materials used in energy transition technologies and advanced manufacturing.
Uganda has to ensure that capital entering the oil and energy sectors also supports domestic manufacturing, employment, skills development and opportunities for local suppliers. Kenya’s investment prospects are also linked to its energy supply and digital economy.
UNCTAD highlights Kenya’s renewable-heavy electricity system, with nearly 90 per cent of power generation coming from renewable sources, led by geothermal energy.
The report says this gives the country a potential cost and credibility advantage in attracting digital infrastructure investment.
Kenya has already secured large-scale projects, including a one-billion-dollar investment package that includes a geothermal-powered data centre.
The report also identifies Konza Technopolis as part of Kenya’s efforts to develop digital infrastructure and attract investment in the digital economy.
The experience points to opportunities for East African countries to compete for investments beyond traditional sectors such as natural resources, provided they can offer reliable infrastructure, suitable skills and predictable regulatory environments.
UNCTAD argues that countries with relatively small domestic markets can attract larger and higher-quality investments by working together to offer investors access to a wider regional market.
The report recommends stronger cooperation in transport and logistics corridors, cross-border industrial zones, shared infrastructure, customs procedures, investment facilitation and supplier development.
For the East African Community (EAC), this would mean treating the region not only as a collection of national investment destinations but also as a connected production and trading area in which businesses can source materials, manufacture goods and reach consumers across borders.
The EAC and the European Union have already established the Market Access Upgrade Programme (MARKUP), which supports small businesses in improving value addition, export competitiveness and access to regional and international markets.
The programme’s second phase, MARKUP II, was launched in 2023 with 40 million euros in European Union funding, focusing on agribusiness value chains and helping businesses improve processing, diversification and export linkages.
UNCTAD says the first phase reached 37,819 small and medium-sized enterprises, helped more than 115 firms generate 16 million dollars in sales and exports, and attracted one million dollars in investment for more than 70 small businesses.
The report argues that regional cooperation can also strengthen countries’ negotiating position with investors and help prevent competition based mainly on costly tax incentives.
Despite the increase in regional investment flows, UNCTAD warns that attracting capital is only part of the development challenge.
The report says investment should be assessed by whether it expands productive capacity, creates jobs, develops skills, transfers technology and strengthens links with domestic businesses.
It also notes that global investment is increasingly shaped by geopolitical tensions, trade policy uncertainty, high financing costs and competition for strategic industries such as digital infrastructure, energy and critical minerals.
For Uganda, Kenya and Rwanda, the figures therefore raise a broader question: how much of the capital entering their economies translates into sustained employment, local production and opportunities for businesses beyond the projects receiving the investment?
UNCTAD recommends that developing countries identify realistic investment opportunities, improve the conditions for businesses to operate and expand, and coordinate regional policies to strengthen their position in changing global supply chains-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
