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Africa smallest landlocked country is now East Africa's biggest economy most profitable market
The country was the best earnings contributor last year despite having the fewest subsidiaries compared to Uganda and Tanzania.
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The country was the best earnings contributor last year despite having the fewest subsidiaries compared to Uganda and Tanzania — which was the best performing market in 2016.
Data from the Central Bank of Kenya shows that Rwanda has 55 subsidiaries, behind Tanzania with 81 and Uganda with 105.
“Subsidiaries operating in Rwanda accounted for the highest profits at 29.44 per cent of the total profits.
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“Subsidiaries operating in Uganda accounted for 19.54 per cent…subsidiaries in Tanzania accounted for 17.85 per cent of the total profits,” read a recent report by the regulator.
Increased tax bills by the Tanzanian government made it tough for foreign investors in the country last year.
Offshoots of local lenders in Rwanda helped contribute 29 per cent of the Sh8.79 billion pre-tax profit 305 bank units in the region netted last year.
In recent years, Kenyan firms operating in Tanzania have faced a challenging business environment which has seen trade volumes between the two neighbors’ continue to dwindle.
Apart from the two counties being members of the East African Community (EAC) they do experience trade tensions and suspicions which have led to several trade tariffs and barriers being imposed which continue to hurt local manufacturers and traders.
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Kenya’s exports to Tanzania in the 10 months to October 2017 plunged to a 10-year low.
Exports to Tanzania in the period to October stood at Ksh23.38 billion ($227 million), down from Ksh28.86 billion ($280.2 million) in the same period a year earlier — reflecting a 18.9 per cent drop.
Kenyan banks operating at the ‘land of a thousand hills’ include Equity Bank, I&M, KCB Group and President Uhuru Kenyatta family-owned Commercial Bank of Africa (CBA).
It is not a one-way street affair though; in return, Rwanda and Uganda are starting to get a slice of the investment cake that has traditionally gone to Kenya.
The two east African countries are slowly emerging as favourite destinations in Africa for investment in ICT.
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Last year, the two countries took in a combined $52.7 million out of which $36.7 million went to Rwanda.
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