East African countries’ increasing restrictions on foreign investments are being blamed for the decline in foreign inflows into the region.
A new survey by the US-based advisory firm AT Kearney shows that investors are more concerned about the operating environment in emerging markets and prefer putting their money into the US economy due to the country’s large domestic market, improving economic performance and new, lower corporate tax rate.
Foreign direct investment into East Africa — the fastest-growing region on the continent — declined three percent from the previous year to $7.6 billion, according to the survey.
Regulations
Last year, an Australian mining company, OreCorp, announced plans to review its operations in Tanzania after the country revised its mining laws to enable the government to renegotiate all mining contracts.
The US Agency for International Development says foreign investors seeking to inject capital into the region are facing regulatory and policy restrictions, that have reduced their appetite for putting money into in the six-member economic bloc.

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