East Africa Business Weekly: A 14-Part Review of Last Week’s Key Developments

Part 1: Regional Overview – Mixed Signals for Growth

Last week, East Africa’s business landscape presented a complex picture of resilience and recalibration. While inflationary pressures eased slightly in Kenya and Uganda, new tax proposals stirred debate. The region saw heightened logistics activity ahead of the mid-year stock-taking season, but foreign exchange shortages continued to trouble importers, particularly in Ethiopia and South Sudan.

Part 2: Kenyan Shilling Stabilizes, Markets Respond Bullishly

The Kenyan shilling strengthened marginally against the US dollar, closing last week at an average of KSh 130.5, buoyed by central bank intervention and diaspora remittances. The Nairobi Securities Exchange (NSE) recorded a 1.8% gain in the NSE 20 Share Index, driven by banking and telecom stocks. Analysts attributed the uptick to renewed foreign investor interest following positive IMF review signals.

Part 3: Uganda’s Central Bank Holds Rate – A Boost for Lenders

Bank of Uganda maintained its Central Bank Rate at 9.5% for the third consecutive month, as inflation remained within the 5% target. Commercial banks responded by slightly lowering lending rates for private sector borrowers in agriculture and manufacturing. The Uganda Securities Exchange saw muted activity, though a new corporate bond listing by a regional housing finance firm drew healthy subscriptions.

Part 4: Tanzania Doubles Down on Port Efficiency Reforms

Tanzania’s Dar es Salaam port reported an 11% reduction in cargo clearance times last week, following the rollout of a new single-window digital system. This move is expected to cut logistics costs for landlocked neighbors Rwanda, Burundi, and DRC. Separately, the Tanzania Petroleum Development Corporation announced a new LNG deal with a Middle Eastern consortium, aimed at boosting energy exports by 2026.

Part 5: Rwanda – Tech and Tourism Drive Service Sector Expansion

Rwanda’s services sector PMI rose to 53.4 last week, indicating robust growth. Kigali hosted the Africa Tech Summit, where three regional fintech startups secured over $12 million in combined seed funding. Additionally, Rwanda Development Board reported a 23% year-on-year increase in MICE (Meetings, Incentives, Conferences, Exhibitions) tourism bookings for the upcoming quarter, signaling strong post-pandemic recovery.

Part 6: Ethiopia – Forex Reforms and Manufacturing Headwinds

The Ethiopian birr remained under pressure despite ongoing IMF-backed reforms. Last week, the central bank devalued the official rate by 2.3% to bridge the gap with the parallel market. This move hurt manufacturing firms reliant on imported raw materials, but export-oriented flower and textile producers gained a competitive edge. A new industrial park in Dire Dawa also secured $40 million in investment from a Chinese textile group.

Part 7: Uganda-Tanzania Oil Pipeline Reaches Key Milestone

The East African Crude Oil Pipeline (EACOP) project announced completion of 38% of its welded length last week. Project financiers confirmed that all resettlement compensation for affected communities in both countries had been disbursed. Meanwhile, a Tanzanian civil society coalition raised environmental governance concerns, but the project’s joint venture partners reaffirmed compliance with international standards.

Part 8: Regional Trade – Non-Tariff Barriers Persist

Despite the African Continental Free Trade Area (AfCFTA) guidelines, last week saw delays in cargo at the Malaba and Busia border posts between Kenya and Uganda. Truck drivers reported harassment and unofficial “transit fees.” The East African Business Council issued a statement calling for expedited operationalization of the Simplified Trade Regime to reduce such disruptions, which cost regional GDP an estimated $200 million annually.

Part 9: Fintech and Mobile Money – New Cross-Board Remittance Deals

M-Pesa expanded its partnership with PayPal to include direct merchant settlements for small traders in Tanzania and Rwanda. Additionally, a Kenyan digital lender, Tala, announced a $15 million credit facility from a US development finance institution aimed at micro-enterprises. Safaricom Ethiopia also reported surpassing 3 million active mobile money users, up 40% from the previous quarter.

Part 10: Agriculture Sector – Coffee and Tea Prices Rally

Global coffee futures rose 5% last week due to supply concerns from Vietnam, benefiting Uganda and Tanzania’s robusta growers. Kenya’s Nairobi Coffee Exchange saw a record auction price of $320 per bag. However, tea prices at Mombasa auction dipped 2% due to oversupply from Sri Lanka and Rwanda. The East African Tea Trade Association announced a new quality assurance protocol to boost buyer confidence.

Part 11: Energy and Infrastructure – Geothermal and Grid Upgrades

Kenya Electricity Generating Company (KenGen) announced the commissioning of an additional 35 MW from Olkaria geothermal plant, pushing total geothermal capacity to 890 MW, the largest in Africa. In Uganda, the World Bank approved a $200 million loan for upgrading rural transmission lines in the West Nile region. Meanwhile, Ethiopia’s Grand Ethiopian Renaissance Dam (GERD) held a fourth filling test, raising downstream concerns in Sudan but proceeding without incident.

Part 12: Real Estate – Office Vacancy Drops in Nairobi, Rises in Addis

Real estate reports last week showed office vacancy in Nairobi’s Upper Hill district fell to 18% (from 23% a year ago), driven by green building demand from international NGOs. In contrast, Addis Ababa saw vacancy rise to 27% due to oversupply and reduced foreign embassy presence. Kigali’s mixed-use developments continued to attract regional investors, with three new mall openings scheduled for Q4.

Part 13: Stock Market Roundup – Nairobi Gains, Dar es Salaam Slips

Nairobi Securities Exchange (NSE): +1.8% (Safaricom +2.1%, Equity Group +3.0%)
Dar es Salaam Stock Exchange (DSE): -0.5% (profit-taking in banking counters)
Uganda Securities Exchange (USE): Flat (low retail participation)
Rwanda Stock Exchange (RSE): +0.9% (driven by insurance sector)
Ethiopia Securities Exchange (ESX): Launched trading in two new corporate bonds, but equity listings remain sparse.

Part 14: Coming Week – What to Watch

In the week ahead, investors will monitor: (1) Kenya’s Q1 GDP growth data, (2) Uganda’s budget reading for FY 2025/26 with new infrastructure allocations, (3) The EAC Heads of State summit on common external tariff negotiations, (4) Tanzania’s auction of treasury bonds, and (5) Ethiopia’s ongoing talks with the IMF for a larger loan facility. Analysts advise caution on currency volatility while remaining optimistic about infrastructure-led growth.