NABA Business Guide to the EAC-2015

NABA Business Guide - EAC
2015

01II NABA Business Guide - EAC 2015
Foreword
Daniella Woldemichael
What you hold in your hands is NABA’s handbook to
one of Africa’s most exciting business regions.
In the 1960’s a wave of independence in East Africa
paved the way for partnerships with Norway. Although
the main focus has been on collaborations within
development, culture and education over the years,
there is huge potential for more business partnerships
between Norway and East Africa.
In NABA, we are proud that several of our member
companies are already prospering within the region.
However, with less than fifty Norwegian companies
currently present, this guide aims to open more
Norwegian eyes to the great opportunities in East
Africa.
The Financial Times forecasts East Africa’s wider region,
the Indian Ocean, to be the fastest-growing area of the
next decade. To be a part of this growth and to help
consolidate our members’ positions in the region, NABA
now has a regional director (Mr. Felix Osok) based in
Nairobi.
With the integration process taking place in the East
African Community (EAC), five countries welcome
Norwegian investors to one single market with
approximately 160 million people. You can feel the
energy, and see the rapid development when visiting
the region, but how can Norwegian companies and
investors be part of this East African growth story?
Consider our business guide as part of the preparation.
What do you need to know? What are the likely
challenges along the way? The journey may already
begin over the next pages: safari njema!
Written by
Daniella
Woldemichael/
NABA
Designed by
Arne S. Skeie
Printed by
Norsk Aero AS
Photo credits
NABA, Innovation
Norway, Creative
Commons
NABA Business Guide - EAC 2015
Aknowledgement
NABA would like to acknowledge the hugely positive impact many parties
and individuals have had on this business guide, and extend a large thank
you for all contributions to it’s development. We express our deepest
thanks to Norad and Innovation Norway for the financing of the guide,
and for the continued support and input throughout it’s creation.
NABA would like to thank the following companies for their assistance
with the collection of the data: Hauge Micro Finance, Mester Grønn, Yara
International, Basecamp Explorer, Scatec Solar, GSK, Paka Adventures,
Green Resources, Statoil, Laboremus, Voxtra, BMI, Control Risks and
KPMG.
We would also like to give a special thank you to the following individuals
on the ground in the EAC: Henry Seruyange, Jens Claussen, Lucrezia
Biteete and Nima Yussuf.
NABA would like to commend the work of Ambassador Dr. Richard
Sezibera and the EAC for the huge strides and development taken place in
recent years, which will attract more investors to the region.
NABA team for their efforts on this project, and for their continuing
support and dedication to NABA!
Limitation of research
Pleasenote;althoughallreasonablecareand
attentionhasbeenpaidtotheaccuracyand
appropriatenessoftheinformationincludedinthis
guide,thereadershouldbeawarethatthereare
certainlimitationstoitsscope.Inconsiderationof
theintendeduse,thisguideprovidesgeneralised
topicsandinformationaimedatfamiliarisingthe
readerwithrelevantsubjectareas.Thereader
shouldbeawaretherearemanyadditionaltopics
anddetailsnotincluded,whichmayberelevantto
somepartieswishingtoconductbusinesswithin
theEAC.Whilethisguideisbelievedtoprovide
agoodreferencepoint,wewouldadviseany
partyintendingtoengagedirectlywithanyofthe
topicscoveredtoseekoutspecialistservicesor
advice.NABAcannotbeheldresponsibleforthe
outcomesofactionsbasedonthecontentofthis
guide.
Ifyouhaveanyquestionsregardingtheguide’s
content,orwishtoenquireaboutNABA’sadvisory
services,pleasecontact:dw@norwegianafrican.no
Daniella Woldemichael
Deputy Managing Director
NORWEGIAN-AFRICAN BUSINESS ASSOCIATION (NABA)

02 03NABA Business Guide - EAC 2015
Foreword
Ambassador Dr. Richard Sezibera
Foreword
Anita Krohn Traaseth
IbringtoyouwarmgreetingsfromtheEastAfrican
CommunityHeadquartersinArusha,Tanzania.
SincetheinaugurationoftheEACin1999,theCommunity
hasundertakensubstantialeffortstowardstransforming
theregionaleconomythroughindustrialisationaswellas
infrastructureandprivatesectordevelopment.Theregion’s
commitmenttoeconomicstructuraltransformationthrough
industrializationiswellespousedinTheTreatyforthe
EstablishmentoftheEAC,theEACCommonMarketProtocol,
andthe4thEACDevelopmentStrategy(2011/12-2015/16).
ThePrivateSector,whichistheengineofgrowthintheEast
Africanintegrationprocess,accountsforover80%ofthe
regionalGDPintermsofjobcreation,skillsdevelopment,tax
revenuesandforeignexchangeearnings.TheVisionofEAC
isaprosperous,competitive,secure,stableandpolitically
unitedEastAfrica;andtheMissionistowidenanddeepen
Economic,Political,SocialandCulturalintegrationinorderto
improvethequalityoflifeofthepeopleofEastAfricathrough
increasedcompetitiveness,value-addedproduction,trade
andinvestments.ThePrivateSectorthereforeisanessential
elementinthesustainabilityoftheEAC.
IwelcomeNorwegiancompaniesandentrepreneursto
comeandinvestinEastAfrica.Norfund-theNorwegian
InvestmentFundforDevelopingCountries-isalready
playinganimportantrole,andwecommendtheeffortsfrom
theNorwegian-AfricanBusinessAssociation(NABA)and
InnovationNorwaywhoareworkingtobuildbridgesbetween
ourbusinesscommunities.Iencouragealreadyexisting
companiestoincreaseoperationsinallcountriesofEast
Africa,especiallyintheinfrastructureandenergysector.Ilook
forwardtodesigningstrategiestoincreasetheshareofEast
Africa’sbilateraltradewithNorway.Ourregionnowenjoys
macro-economicandpoliticalstabilityaswellasafavourable
businessenvironmentandstronginstitutions.
Ilookforwardtoourcontinuedcooperationformutual
benefits.
When Innovation Norway decided to open their second office on
the African continent, the message from the Norwegian business
community was clear: It has to be in East Africa.
On February 1st 2014 the office in Nairobi was up and running and
we are proud that we have since been able to work with a large
number Norwegian companies, assisting them in their market
entry processes. An important part of our work, since opening our
operation, has also been to uncover business potentials in the East
Africa region which are relevant to an internationally oriented
Norwegian supply industry.
This business guide, to which Innovation Norway has provided
financial support, advice and input, is another example of the
increasing momentum towards East Africa. Furthermore,
Innovation Norway is excited about its collaboration with the
Norwegian Minister of Trade and Industry to increase business ties
with the key countries in the region.
The economies of East Africa are growing rapidly and Innovation
Norway stands ready to support Norwegian companies from our
regional office in Nairobi and through our network of partners in
the neighbouring countries.
We would like to commend NABA on the work they have done with
this business guide, and we hope it will inspire more Norwegian
investments in East Africa.
Anita Krohn Traaseth
Managing Director
Ambassador Dr. Richard Sezibera
Secretary General
Innovation Norway East African Community (EAC)

Contents
Part 1 East African
Community (EAC) 06 - 25
Regional Economic Community 06 - 10
Regional Integration 11 - 12
Regional Economic Outlook 13 - 14
Regional Infrastructure 15 - 17
Starting a business 18 - 24
EAC Business Environment 18 - 19
EAC Risk and Opportunities 20 - 21
EAC Culture 22 - 23
Norwegian Stakeholders List for
African Business 24 - 25
Part 2 EAC Member
Countries 28 - 97
Burundi 30 - 41
Snapshot of Burundi 30 - 32
Macroeconomic Overview 33 - 36
Geography and Demographic Overview 33
Political Overview 34
Economic Overview 34
Industry Sectors 36
Setting up a company 37 - 41
Business Environment 37
Paying Tax 39
Transport and Logistics 39
Safety and Security 40
Business Culture 40
CSR41
Registering a Company 41
Kenya 42 - 55
Snapshot of Kenya 42 - 44
Industry Sectors 48
Paying Tax 52
Business Culture 53
CSR54
Rwanda 56 - 68
Snapshot of Rwanda 56 - 58
Industry Sectors 62
Paying Tax 66
Business Culture 67
CSR68
Tanzania 70 - 83
Snapshot of Tanzania 70 - 72
Industry Sectors 76
Paying Tax 80
CSR81
Business Culture 81
Uganda 84 - 97
Snapshot of Uganda 84 - 86
Industry Sectors 90
Paying Tax 94
Business Culture 96
CSR96
Glossary
BDI Burundi
BDIF Burundian Franc
BN Billion
CAGR Compound Annual Growth Rate
CDMA Code Division Multiple Access
CEN-SAD Community of Sahel/Saharan
States
COMESA Common Market for Eastern
Southern Africa
DKK Danish Krone
EAC East African Community
ECCAS Economic Community of Central
African States
ECON. Economic
FDI Foreign Direct Investment
FII Foreign Indirect Investment
FTA Free Trade Area
GDP Gross Domestic Product
HDI Human Development Index
IDV Individualism
IGAD Intergovernmental Authority on
Development
IGGLR International Conference on the
Great Lakes Region
IND Indulgence
KEN Kenya
KM Kilometre
LTO Long Term Orientation
MAS Masculinity
M Million
N/A Not Available / Applicable
NABA Norwegian-African Business
Association
NSSF National Social Security Fund
NTB Non Tariff Barriers
PDI Power Distance Index
RCP Retail Consumer Products
REC Regional Economic Community
RHC Real Estate, Hospitality
Construction
RWA Rwanda
RWF Rwandan Franc
SP Standard Poor’s
SADC Southern Africa Development
Community
SCT Single Customs Territory
SEC Single Customs Territory
SEK Swedish Krone
STR. Structure
KM2
Square Kilometre
TMT Technology, Media
Telecommunications
TZA Tanzania
TZS Tanzanian Shilling
UAI Uncertainty Avoidance Index
UGA Uganda
UGX Ugandan Shilling
USD United States Dollar
VAT Value Added Tax
VS Versus
Embassy Information 98
Norwegian Companies in the EAC 99
Sources100
List of Tables Figures 101

06 07
Mission Statement
“To widen and deepen Economic,
Political, Social and Cultural
integration in order to improve
the quality of life of the people
of East Africa through increased
competitiveness, value added
production, trade and investments”.
Vision Statement
“To create a prosperous,
competitive, secure, stable and
politically united East Africa”
Part 1
East African
Community
(EAC) 2015
The East African Community (EAC)
is the regional intergovernmental
organisation of the Republics
of Burundi, Kenya, Rwanda,
Uganda and the United Republic
of Tanzania, headquartered in
Arusha, Tanzania.
EAC Objectives
The EAC aims at widening and deepening co-operation
among the Partner States within political, economic and
social fields for their mutual benefit. To this extent the
EAC countries established a Customs Union in 2005
and a Common Market in 2010. The next phase of the
integration will see the bloc enter into a Monetary Union
and ultimately become a Political Federation of the East
African States.
Source: EAC 2014a
Photo: Lake Turkana Wind Project, Kenya

NABA Business Guide - EAC 2015 Part 1 // East African Community 201508 09
Member states President Currencies
Republique du
Burundi
Republic of
Kenya
Republic of
Rwanda
United Republic of
Tanzania
Republic of
Uganda
Pres. Pierre
Nkurunziza
(election 2020)
Pres. Uhuru
Kenyatta
(election 2018)
Pres. Paul
Kagame
(election 2017)
Pres. Jakaya
Kikwete
(election 2020)
Pres. Yoweri K.
Museveni
(election 2016)
Burundian
Franc (BIF)
Kenyan
Shilling (KES)
Rwandan
Franc (RWF)
Tanzanian
Shilling (TZS)
Ugandan
Shilling (UGX)
Int’l trade volume (2012) - USD 33 bn
Intra-EAC trade volume - USD 3.8 bn
Total exports volumes - USD 11 bn
Total imports volumes - USD 26 bn
Total investments flow - USD 1.7 bn
Social Indicators
Population
158m
GDP (USD)
110.3bn
Pop.%ofAfrica
13.7%
GDPpercapita
769 USD
Inflation(CPI)
4.4%
30+70+F+
22+78+F+
52+48+F+ 78+22+F+
29.5 %
Youth
population
21.7 %
Urban
population
52.3 %
Working age
population
78 %
Literacy rate
Forest area
29.1%
Surface area
incl. water
1.85
m km2
Water
5.6%
Mobile subscriptions - 56.8 %
Religion - Christianity, Islam, Animism,
Indigenous religion, other
Official languages - English, Kiswahili and
French (Burundi and Rwanda)
Life expectancy - 44 years
Time zone - GMT+3
Geographical Indicators
Economic Indicators
Source: The World Bank, 2014a, EAC 2014a, EY 2015a
Source: EAC 2014a, EAC 2015a, Mo Ibrahim Foundation 2014
Bujumbura
Nairobi
Kigali
Dodoma
Kampala
Why Invest in the EAC?
Market Size and Market Access
• The second largest single market in Africa with 158
million consumers.
• The Tripartite Agreement gives access to an extended
market:
• The Common Market for Eastern and Southern Africa
(COMESA): 469 million consumers.
• The Southern African Development Community
(SADC): 287 million consumers.
• EAC partners also have preferential access to the EU
market, and qualify under the African Growth and
Opportunity Act (AGOA) for access to the US market for a
variety of products.
• Membership in the African, Caribbean and Pacific States
(ACP) and the Generalized System of Preferences (GSP),
enables products from Partner States to qualify for
preferential tariffs on exports to member countries.
• Burundi, Rwanda, Tanzania and Uganda are covered
by the EU’s Everything But Arms (EBA) initiative, under
which all products from Least Developed Countries
(LDCs) except arms and ammunitions have preferential
access to the EU market.
Resources and Opportunities
• EAC offers soil and climate conditions ideal for a variety
of agricultural products, including tea, coffee, fruits,
flowers and vegetables.
• In tourism, the EAC has enviable natural assets, above all
in Tanzania, which has allocated 25% of its land to game
reserves and national parks.
• Other opportunities can be found in mining,
manufacturing, infrastructure and services.
• The EAC offers a 2,000 km coastline and access to
essential ports to both the EAC and to the rest of Africa.
An Environment Conducive to
Investments
• Politically as well as economically, the EAC offers a
stable environment, marked by democratically elected
Governments, low inflation and steady growth.
• The region is well located for access to African markets,
with Tanzania alone sharing its borders with eight other
countries as well as overseas markets. In addition, a larger
number of airlines fly into Nairobi.
• The Community shares a common business culture,
with English widely used in business, government and
the judiciary. Kenya in particular offers a skilled and
entrepreneurial workforce.
Secretary General Amb. Dr. Richard Sezibera
Headquarters Arusha, Tanzania
East African Community (EAC)
Photo: Scatec, Rwanda
Arusha

NABA Business Guide - EAC 201510 11Part 1 // East African Community 2015
Governance structure
of the EAC
The Summit
is made up of the Heads of State from
the different Partner States. Its task is
to provide general directions and be
the driving force for the development
and achievement of objectives for the
community.

The Council of Ministers
is the main decision making organ that is
comprised of the Ministers responsible
for regional cooperation in the respective
Partner States.

The Coordinating Council
consists of the Permanent Secretaries from
the Partner States responsible for regional
integration. This organ is responsible for
coordinating the activities of the Sectoral
Committees.

Sectoral Committees
develop, monitor and implement sector
specific programmes. The committees are
established by the Council of Ministers
upon recommendation by the Coordinating
Council.

East African Court of Justice
is tasked with the implementation and
interpretation of the laws of the community.

East African Legislative Assembly
debates and formulates laws for the
community. It is the legislative body of the
community.

The Secretariat
is the executive body who is responsible
for the day to day operations of the EAC
and the overall implementation of the EAC
Treaty. It is headed by a Secretary General
and three deputy secretary generals.
EAC Member States:
Strategic Visions
The EAC partner states have each
developed separate strategic visions
for political, economic and social
development within the indicated time
frame.
The strategic visions are in line with the objectives of
the Community, which is meant to develop policies
and programmes aimed at widening and deepening
co-operation among the Partner States in political,
economic, social and cultural fields, as well as in research
and technology, defence, security and legal and judicial
affairs. All the Partner States share the ambition of
achieving a middle income status by 2030.
EAC Treaty
Attain a prosperous, competitive, secure
and politically united East Africa.
Priority area: Widen and deepen economic, political,
social and cultural integration at regional and global
levels.
Rwanda Vision 2020
Become a middle income country by 2020.
Priority area: Reconstruction, HR development and
integration to regional and global economy.
Tanzania Vision 2025
High quality of life anchored on peace,
stability, unity, good governance, rule of
law, resilient economy and competitiveness.
Priority area: Inculcate hard work, investment
and savings culture; knowledge based economy;
infrastructure development; and Private Sector
Development.
Burundi Vision 2025
Sustainable peace and stability and
achievement of global development
commitments in line with MDGS.
Priority area: Poverty reduction, reconstruction and
institutional development.
Kenya Vision 2030
Globally competitive and prosperous Kenya
with a high quality of life.
Priority area: Reconstruction, HR development and
integration to regional and global economy.
Uganda Vision 2040
A transformed Ugandan society from a
peasant to a modern and prosperous country
within 30 years.
Priority area: Agriculture, tourism, minerals, human
capital development, and infrastructure.
Source: EAC 2014a
The treaty for the establishment of the EAC was signed on 30th
November 1999 and entered into force on 7th July 2000, following
its ratification by the three original Partner States, Kenya, Uganda
and Tanzania. Burundi and Rwanda acceded to the EAC Treaty on
18th June 2007 and became full members of the Community with
effect from 1st July 2007.
EAC Customs Union
Status: Implementation stage.
Trade - Reduction of national trade barriers.
Tariffs - Implementation of preferential tariff discount.
Procedures - The harmonisation of vehicle transit procedure.
Harmonisation of procedures for granting work permits. Abolation
of students visas for East Africans. Harmonisation of standards for
goods produced in East Africa.
EAC Common Market
Status: Implementation stage.
Movement of goods - One-stop border posts are being constructed
at several border crossing points.
Movement of labour - The introduction of the East African passport.
Special immigration desks for East African citizens at international
airports. Re-introduction of interstate passes.
Movement of capital - The currencies of Kenya, Tanzania and
Uganda have been freely convertible since 1997. Capital markets
development and cross-listing of stocks. Free movement of stocks.
EAC Monetary Union
Status: Planning stage.
Policy development: The EAC proceeds forward with the
negotiations of the third stage of EAC integration, i.e the negotiations
of the Monetary Union. The policy-makers and experts are still in
deliberation at this stage.
EAC Political Federation
Status: Planning stage.
Policy development: The EAC has stipulated that a political
federation is the ultimate goal, a new deadline was set at the 16th
EAC Heads of States Summit held in Nairobi on 30 November 2014
which moved the deadline to 2016.
Source: EAC 2014a Source: EAC 2014a
EAC Integration
2000
2010
2020
2030
2040
2000
EAC Treaty
In effect.
2005
EAC Customs
Union
Duty-free trade,
reduction in customs
procedures and
intra-regional tariffs.
2010
EAC Common
Market
The implementation
still taking effect
with movement of
goods, capital and
labour.
2012
EAC Monetary
Union
A single currency,
under process. An
East African Cross
Border Payment
System launched.
TBC
EAC Political
Federation
Delays with the
Monetary Union has
resulted in a setback
in forming the
Political Federation.

12 13NABA Business Guide - EAC 2015 Part 1 // East African Community 2015
EAC Economic Outlook
Regional Economy
Together, the five East African countries cover an
area of 1.85 million square kilometres and have
a population of more than 158 million who share
history, language, culture and infrastructure. These
advantages provide the Partner States with a
unique framework for regional co-operation and
integration.
The combined Gross Domestic Product (GDP) of the
five countries is USD 110.3 billion and an average GDP
per capita of USD 769* (*2014 figures).
Real GDP growth in the East African Community
was 5.8% in 2014 up from 5.3% in 2013. The growth
was supported by improved agricultural production
coupled with strong domestic demand as well as
infrastructural investments.
Kenya is the regions largest economy and is a regional
trade, finance, communication and manufacturing hub.
It contributes with approximately 49.3% of the region’s
GDP followed by Tanzania and Uganda at 29.8% and
20.9% respectively.
Tanzania has abundant population, agricultural base
and natural resources. It has the largest population
with 50.8 million in 2014, followed by Kenya (45.6 m)
and Uganda (38.9m).
Rwanda and Burundi are relatively small economies
but are fast growing and are undergoing significant
reforms. Rwanda now famous for its zero-tolerance to
corruption, and has been ranked as one of the fastest
growing economies with an annual growth rate of 8%
in the last five years.
The region’s current account deficit as a percentage of
GDP worsened to 12.4 % in 2014 compared to 11.8 %
in 2013.
The future of EAC region looks promising due
to interregional infrastructural development,
especially in road and railway construction as well
as ICT. Further, continued integration is expected to
increase economic activities in the partner states.
Consequently, the EAC region is projected to register
real growth of 6.2% in 2015, with Tanzania expected to
record the highest growth of 7.0%.
Inflation Rates - 2014
The inflation rate in the EAC region dropped to an
average of 5,6% in 2014, down from 6,4% in 2013. This
was mainly because of reduced food and fuel prices.
In Uganda, a general decline in commodity prices coupled
with low demand for goods and services helped the
country to record an annual inflation rate at 5.5 % in
2014, the lowest in two years.
Kenya closed the year with an inflation rate of 6.9 %, a
decline from 7.2 % reported in 2013.
Tanzania maintained its inflation rate at 5.9 %.
Rwanda closed the year with the lowest inflation rate in
the region at 2.6 %, down from 4.58 %.
Burundi recorded the highest inflation rate in the region,
averaging 7.0 %.
Source: EY 2015a
GDP - Gross
Domestic Product
110.3
bnUSD
Combined GDP of
the EAC*
*2014 figures
769
Average GDP per
capita (USD) in the
EAC*
*2014 figures
Macro economic data - EAC
Table 1.3 Source: EY 2015a
Country Burundi Kenya Rwanda Tanzania Uganda
Population (M) 10.5 45.6 12.1 50.8 38.9
GDP (USD Bn) 2.4 49.3 7.3 29.8 20.9
Real GDP growth (%) 4.7 5.3 4.7 6.0 5.9
Per capita income
PPP (USD)
635 1,774 1,371 1,541 1,424
Inflation (%) 7.0 6.9 2.6 5.9 5.5
Current A/C Balance
(% of GDP)
-20.7 -8.0 -7.1 -13.8 -8.5
VAT Rate - 16% 18% 18% 18%
Corporation Tax - 30% 30% 30% 30%
EAC Market Size and Access
Regional Economic Communities (RECs)
Tripartite Free Trade Area (TFTA)
Established in 2005 to strengthen and deepen economic
integration of Southern and East Africa by harmonising
policies and programmes in areas of trade, customs and
infrastructure development.
The Economic Partnership Agreement set in 2014
between EAC and EU go beyond the elimination of
customs duties, it covers issues such as free movement of
goods, cooperation on customs and taxation, and trade
defence instruments.
EAC memberships in other Rec’s
Apart from their membership in the EAC, all partner
states are also members of other regional integration
schemes (see table 1.2). Kenya belongs to the most RECs
with 5, followed by Uganda, Burundi with 4, Rwanda and
Tanzania with 3.
Figure 1.1: EAC Membership in RECs 2015
COMESA
EAC
SADC
COMESA - EAC- SADC Free Trade
Area (FTA)
Table 1.1 Source: Mo Ibrahim Foundation, 2014
RECs EAC SADC COMESA
Headquarters Arusha,
Tanzania
Gaborine,
Botswana
Lusaka,
Zambia
Member States 5 15 20
People 158 m 287 m 469 m
Land Area 1.7 m km2
9.6 m km2
11.2 m km2
Urban Pop. 22 % 39 % 29 %
GDP 110 bn USD 648 bn USD 588 bn USD COMESA: Common Market for Eastern Southern Africa
CEN-CAD: Community of Sahel-Saharan States
ECCAS: Economic Community of Central African States
ICGLR: International Conference on the Great Lakes Region
IGAD: Intergovernmental Authority on Development
Timeline
2011
Declaration was
signed initiating
negotiations for the
establishment of
the COMESA-EAC-
SADC FTA.
2015
The deal was
launched on June
10th in Egypt and
unveiled at the
25th African Union
Summit in South-
Africa.
2016
The implementation
of the agreement of
the FTA.
Overview EAC membership in Rec’s
2015
Table 1.2 Source: Mo Ibrahim Foundation, 2014
Country Recs Additional
groups
Total
Burundi COMESA, EAC, ECCAS ICGLR 4
Kenya CEN-CAD, COMESA,
EAC, IGAD
ICGLR 5
Rwanda COMESA, EAC ICGLR 3
Tanzania EAC, SADC ICGLR 3
Uganda COMESA, EAC, IGAD ICGLR 4

Foreign Direct Investment (FDI)
Since2007,FDIprojectsinEastAfricahavegrownat
compoundannualgrowthrate(CAGR)of19.9%,the
strongestinAfrica. Theregionhasalsoattractedgrowing
FDIinvestmentandjobsduringthisperiod,bolsteredby
thesuccessofregionalintegration.In2014,thenumberof
jobscreatedbyFDIinEastAfricaalmostdoubled,thoughit
attracted11.6%fewerprojects. OtherEastAfricancountries,
includingUganda,TanzaniaandRwandaalsosecuredfewer
FDIprojects.OngoingsecurityproblemsandconflictsinKenya
andSouthSudanhaveprovedtobeaconcern,butinvestors
arelikelytoremaininterestedintheregion.
This region is unique in terms of its investor base. While
Western Europe is the leading investor in the other regional
hubs, African countries have taken the lead in investing in
the eastern hub. The largest investor in the region is Kenya.
East Africa’s appeal lies in its large market opportunities,
recent discoveries of natural resources and ongoing market
integration through the EAC.
Kenya
Between 2007 and 2013, FDI projects into Kenya increased
at a CAGR of more than 40%. In 2014, Kenya attracted the
second-highest number of FDI projects (+25.9%), behind
South Africa. Increasingly, investors have been targeting
Kenya as a springboard to growing East African consumer
markets. Furthermore, the recent discovery of oil has added
to the country’s attractiveness. Kenya is also becoming a
technology, media and telecommunications (TMT) hub, with
its large, skilled and youthful population. In order to
target the growing number of software developers, Kenya
has pledged to build a USD 14.5bn information technology
hub outside Nairobi, called Konza Technology City.
Tanzania
Recently discovered gas reserves in Tanzania are propelling
investor interest. Apart from gas, the country competes
with Mali for the position of Africa’s third-largest gold
producer. However, underdeveloped infrastructure makes
the country a high-cost location for doing business. To
resolve this situation, the Government is inviting private
companies to invest in infrastructure opportunities, such as
road construction.
Rwanda
Rwanda has seen robust economic growth in the last
decade. This trend is expected to continue, with GDP
forecast to grow 7.0% in 2015. The country has made
concerted efforts to improve its business environment. It is
ranked 46th on the World Bank’s Doing Business rankings
2015. It ranks third in Sub-Saharan Africa (SSA) for the
friendliness of its business environment. A fiber-optic cable
network covering the entire country was laid in 2010. This
enabled the development of the country’s financial services
sector. Rwanda has also embarked on a drive to upgrade
its infrastructure to develop industries such as tourism,
transport, logistics, information and communication
technology (ICT) and education.
Uganda
Uganda was another new entrant into the list of the top
10 countries by FDI projects in 2013. Solid GDP growth,
a rapidly expanding population and low per capita
consumption are some of its appealing factors. One
multinational that has recently increased its presence in
the country is SAB Miller, which opened its second brewery
in Uganda in 2013. Oil fields and the agricultural sector in
Uganda are also attracting investor attention.
Source: EY 2014a, EY 2015c
The average
investment in SSA
almost doubled to
110.1
mUSD
although the surge
was driven by a
handful of very large
deals.
FDI projects in East
Africa grown at
CAGR
19.9%
since 2007.
Number of jobs
created by FDI
almost
doubled
in 2014.
FDI projects in East
Africa decreased by
11.6%
due to problems
and conflicts in
South Sudan and the
Northern parts of
Kenya.
Regional
Infrastructure
Burundi, Rwanda and Uganda are landlocked countries
and are reliant on rail, road and fiber-optic links
through the main coastal hubs in Dar es Salaam
(Tanzania) and Mombasa (Kenya) to handle bulk
imports and exports.
The EAC established the Northern Corridor and the
Central Corridor transport routes to handle and advise
on logistical issues surrounding the transportation of
goods mainly to the ports of Mombasa and Dar es Salaam
due to the dependencies of the other member states.
Following a Northern Central Corridor Investors
Forum in Dar es Salaam on March 25th 2015, EAC
members launched the construction of the USD 14.2
billion East African Central Corridor Railway.
According to the Deloitte African Construction Trends
Report 2014, Kenya had the most infrastructure projects
in 2014 in the EAC followed by Uganda, Tanzania,
Rwanda and Burundi respectively.
East Africa Trade and Transport
Facilitation Project (USD 281.7 m)
The objective of the programme is to
improve trade and transport services
in four of the member states of the
East African Community.
Current Infrastructure Projects
Project countries
Kenya
Rwanda
Tanzania
Uganda
38+37+13+12++F+Sectors
 Generaltransportationsector 38%
 Railways37%
 General public administration sector 13%
 Ports, waterways and shipping 12%
Photo: Globeleq Songas, Tanzania
FDI projects by Subregion and
Country
Table 1.4 Source: EY, 2015c
Region/
COUNTRY
No of
Projects
PRE-CRISIS
AVg 2003-07
No of
Projects
2013
No of
Projects
2014
%
Change
2014 vs
2013
NORTH
AFRICA
164 135 165 + 22.2%
SSA 226 665 568 - 14.6%
EASTAFRICA 43 181 160 - 11.6%
KENYA 12 54 68 + 25.9%
TANZANIA 8 32 24 - 25%
UGANDA 8 17 21 + 23.5%
FDI Hotspots: Top 3 investors Sectors by FDI
projects 2007 - 13
Table 1.5 Source: EY, 2014a
COUNTRY INVESTORS SECTORS
GHANA UK, US, South Africa Financial services, RCP, TMT
KENYA UK, US, India Financial services, RCP, TMT
MOZAMBIQUE UK, South Africa, Portugal RCP, Coal, Oil natural gas, RHC
ZAMBIA South Africa, China, India Financial Services, Metals mining, RCP
TANZANIA UK, Kenya, India Financial services, RCP, TMT
UGANDA UK, Kenya, India Financial services, RCP, TMT
NIGERIA UK, US, South Africa Financial services, RCP, TMT
Rwanda US, Kenya, Uganda Financial services, TMT, RHC
RCP - Retail and Consumer Products
RHC - Real Estate, Hospitality and Construction.

Road transportation is the most important mode of
transport in the region, the EAC has identified five
main corridors within the Community (see figure 1.3) a
total length of about 12,000 km. There are two transit
corridors that facilitate import/export activites in the
region:
The Northern Corridor (1,700 km long) commencing
from the port of Mombasa and serves Kenya, Uganda,
Rwanda, Burundi and Eastern DRC.  
The Central Corridor (1,300 km long) begins at the port
of Dar es Salaam and serves Tanzania, Zambia, Rwanda,
Burundi and Eastern DRC.
Roads
Bungoma - Eldoret Road (95 km)
The objective is to upgrade the road
from Bungoa to Eldoret servicing
the Northern Multimodal Transport
Corridor.
Project country
Kenya
Project completion
TBC
Railway transport is the second most important mode of
transport after road and critical for long distance freight
along the main transport corridors in both Tanzania and
Kenya.
The EAC has identified the need to harmonise road and
rail transport operations along the main corridors and has
established an East African Railways Master Plan to guide
the future development of the railway services in the region.
Railway
Project countries
Burundi
Rwanda
Tanzania
Project completion
TBC
The Isaka-Kigali Railway - 1,672 km
rail network from Dar-es-salaam to
key centers in Rwanda and Burundi.
The objective is to provide modern,
rail-based transportation service in
the East African Central Corridor.
Project countries
Burundi
Rwanda
Tanzania
Project completion
TBC
The Mombasa-Kigali Rail Link -
2,935 km rail network connecting
Kenya’s port of Mombasa with the
Rwandan capital of Kigali by way of
Kampala, Uganda.
The main objective of the railway is
to provide a reliable, efficient railway
network leading to reduced cost of
transportation and logistics.
Source: EAC 2015a, EAC 2015b, EAC 2015c, KPMG Africa 2013, Afdb
2013, The World Bank, East African Business Week 2015, PIDA 2015,
Scatec Solar 2015
Legend
Current Railway Line
Proposed Railway Line
Ferry
Legend
Mombasa - Malaba - Katuna Corridor
Dar-Es-Salaam - Dodoma - Isaka - Mutukula - Masaka Corridor
Biharamulo-Mwanza-Musoma-Sirari-Lodwar-LokichogioCorridor
Nyakanazi - Kasulu - Sumbawanga - Tunduma Corridor
Tunduma - Iringa - Dodoma - Arusha - Namanga - Moyale Corridor
Sections/Links connecting with East Africa neighbors; those of
interregional connectivity
Figure 1.2: EAC Road Network Project
Figure 1.3:
EAC Current Rail Network
with Proposed New Lines
Energy
East African countries are gearing up for new
investments in the power sector as investors and
big financiers close new deals for energy projects,
potentially easing the region’s power woes. For an oil
gas project overview, see each country chapter.
Bujumbura Lake Port Upgrading
The main objective to reduce
transport/trade cost with the
use of least cost links especially
for Burundi, part of Eastern DRC
and Uganda; (2) Providing viable
alternative trade routes for
countries using the Lake services
to avoid propensity to exploit
monopoly situations.
Ports Waterways
Project country
Burundi
Project completion
2017
Rusumo Falls Hydropower Project
(80MW)
The objective of the Regional
Rusumo Falls Hydroelectric Project
is to increase power supply of
electricity to the national grids of
Burundi, Rwanda, and Tanzania.
Jiji and Mulembwe Hydropower
Project (50MW)
The objective of the project is to
increase the supply of clean and
low cost hydropower electricity to
Burundi’s national grid.
Ruzizi III Power Station (145 MW)
supply of sustainable electricity to
the three countries, control of the
water level in the river basin.
Hydropower
Project countries
Tanzania
Rwanda
Burundi
Project completion
2018
Project country
Burundi
Project completion
TBC
Project countries
Rwanda
DRC
Burundi
Project completion
2020
Regional Communications
Infrastructure Project
The objective of the Program is to
leverage private sector participation
to improve open access to
international connectivity in East
and Southern Africa.
Infrastructure Program - Phase 3
increase the supply of clean and
low cost hydropower electricity to
Burundi’s national grid.
Infrastructure Program - Phase 5
The objectives of the project are to
support Uganda’s efforts to lower
prices for international capacity
and extend the geographic reach of
broadband networks and improve
the Government’s efficiency and
transparency through e-Government
applications.
Information Communication
Project countries
Burundi
Kenya
(Madagascar)
Project completion
2016
Project countries
Tanzania
(Mozambique)
(Malawi)
Project completion
2016
Project country
Uganda
Project completion
2022
The Agahozo-Shalom Youth Village
Plant (8.5MW)
Theobjectiveistoincreasetheelectricity
generationcapacityinthecountry.
Solar
Project country
Rwanda
Project completion
TBC
Lake Turkana Wind Power Project
(300 MW)
provide low cost wind power to
Kenya’s national electricity grid.
Wind
Project country
Kenya
Project completion
2017







Tunduma
Bujumbura
Dodoma
Korogwe
Arusha
Nairobi
Kigali
Bukoba
Kasese
Kisangani
Bihanga
Bunla
Sumbawanga
Musongati
Mbeya Mlimba
MtwaraLiganga
Mpanda
Tabora
Kabale
Kaliua
Uvinza
Kigoma
Isaka
Mwanza
Musoma
Mchuchuma
Dar Es Salaam
Mombasa
Addis Ababa
Mbala Bay
Msolwa
Tanga
Moshi
Magadi
Taveta
Lamu
GarissaNanyuki
Kisumu
Butere
Kitale
Tororo
Gulu
Pakwach
Nimule
Juba
Port Bell
Kampala
Jinja
Kamuli
Nakuru
Voi
Kilosa
Singida
Manyoni
Kitadu
Tunduma
Dodoma
Segera
Arusha
Minjingu
Nairobi
Thika
Bukoba
Mutukula
Katuna
Sumbawanga
Nyakanazi
Biharamulo
Mbeya
Mtwara
Masasi
Mingoyo
Ndudu
Lindi
Tunduru
Masaka
Kigoma
Kasulu
Isaka
Mwanza
Musoma
Sirari
Songea
Dar Es Salaam
Mombasa
Mbala Bay
Tanga
Horohoro
Namanga
Taveta
Malindi
Garissa Liboi
Moyale
Marsabit
Isiolo
Mwingi
Kisumu
Eldoret
Kitale
Kipchorwa
Malaba
Mbale
Gulu
Nimule
Lodwar
Lokitanyala
Lokichogio
Kampala
Jinja
Voi
Emali
Kibwezi
Morogoro
Chalinte
Singida
Babati
Manyoni
Iringa
Ethiopia
Somalia
Kenya
South Sudan
DRC
Zambia
MozambiqueMalawi
Tanzania
Burundi
Rwanda
Ethiopia
SomaliaKenya
South Sudan
DRC
Zambia
MozambiqueMalawi
Tanzania
Burundi
Rwanda

Starting a Business
EAC Business Environment
Summary of Doing Business - Indicators for East African Community (EAC)
Table 1.6 Source: The World Bank 2015a
Country Burundi Kenya Rwanda Tanzania Uganda Regional
Average
Starting a business 18 143 112 124 166 113
Dealing with construction
permits
133 95 34 169 163 119
Getting electricity 182 151 62 87 184 133
Registering a property 48 136 15 123 125 89
Getting credit 171 116 4 151 131 74
Protecting investors 94 122 117 141 110 73
Paying taxes 124 102 27 148 104 101
Trading across boarders 169 153 164 137 161 157
Enforcing contracts 158 137 62 45 80 96
Resolving insolvency 144 134 101 105 98 116
Ease of Doing business rank 152 136 46 131 150 116
Kenya
Worst indicator in:
• Registering a property
Economic
freedom 2015
Rwanda has the best
score followed by
Uganda, Tanzania, Kenya
and Burundi with the
least economic freedom.
Rwanda
Best indicators in:
• Dealing with
construction permits
• Getting electricity
• Registering a property
• Getting credit
• Paying taxes
• Ease of doing business
Rwanda outperformed the
other members of the EAC in
6 outof 11
categories.
Global
competitiveness
2014-15
Rwanda has the best
score followed by Kenya,
Tanzania, Uganda and
Burundi being the worst
score in terms of global
competitiveness.
Tanzania
Best indicators in:
• Trading across borders
• Enforcing contracts
Worst indicators in:
• Dealing with
construction permits
• Protecting investors
• Paying taxes
• Ease of doing business
Doing business
2015
Rwanda has the best
score followed by
Tanzania, Kenya, Uganda
and Burundi has the
worst score of doing
business in 2015.
Uganda
Best indicator in:
• Resolving insolvency
• Starting a business
• Getting electricity
Corruption
Perception
Index 2014
Rwanda has the lowest
score followed by
Tanzania, Kenya, Uganda
and Burundi ranked with
the highest corruption
perception score.
Burundi
Best indicators in:
• Starting a business
• Protecting investors
• Getting credit
• Trading across borders
• Enforcing contracts
• Resolving insolvency
Human
Development
Index 2013
Kenya has the best score
followed by Rwanda,
Tanzania, Uganda and
Burundi is the least
developed in terms of
human development.
Source: UNDP 2014, The Heritage Foundation 2015, World Economic Forum 2015, The World Bank 2014, Transparency International 2014
EAC Membership Countries Competitiveness Ranking
1 - Most developed 1 - Most free 1 - Most competitive 1 - Best 1 - Least corrupt
Tanzania159
Uganda164
Kenya147
Rwanda151
Burundi185
187 - Least developed1 - Highest ranking
189 - Lowest ranking
178 - Least free 144 - Least competitive 189 - Worst 175 - Most corrupt

Uganda92
Tanzania109
Kenya122
Rwanda65
Burundi132


Tanzania121
Uganda122
Kenya90
Rwanda62
Burundi144

Tanzania131
Uganda150
Kenya136
Rwanda46
Burundi152

Tanzania119
Uganda142
Kenya145
Rwanda55
Burundi159

Best Worst

Figure 1.4: EAC Opportunity Matrix Source: EY 2014b
Higher risk - Lower reward Lower risk - Lower reward
Higher risk - Higher reward Lower risk - Higher reward
South Africa
Egypt
Angola
Tunisia
GhanaEthiopia
Mozambique
Uganda
Kenya
SenegalCote d’Ivoire
Zambia
Cameroon
Zimbabwe
DRC
Nigeria
Rwanda
Namibia
Mauritius
Botswana
OpportunityHigheropportunityLoweropportunity
Risk Lower riskHigher risk
EAC Risk Opportunity Matrix
Size of bubbles = FDI new projects (2007 - 14)
Tanzania
Medium political risk
High political risk
Low security risk
Medium security risk
High security risk
Starting a business
EAC Risk Opportunity
Figure 1.5: EAC - Political Security Risk Map 2015 Source: Control Risks, 2015
EAC - Country Risk Forecast 2015
Nairobi
Mombasa
generally creating environments that are increasingly
conducive for doing business. Tanzania and Uganda
are markets with strong growth characteristics,
partly driven by resources , but where the business
environment remains challenging and risk factors such as
corruption and political uncertainty need to be taken into
consideration.
Burundi
Higher risk - Lower reward
Burundi is a high risk environment and which does not
exhibit particularly exciting growth characteristics.
Source: EY 2014b
Risk Opportunity
Kenya Rwanda
Lower risk - Higher reward
The most attractive quadrant, offering a stable business
environment and high potential for growth. Rwanda is
emerging as an increasingly attractive market in this
category, while the other EAC countries of Kenya,
Tanzania and Uganda are moving rapidly into this
quadrant.
Tanzania Uganda
Higher risk - Higher reward
Tanzania and Uganda are growing at consistently high
rates, making steady political and social progress and
Low risk, High reward
KenyaRwanda
High risk, High reward
Tanzania
Uganda
High risk, Low reward
Burundi
or re-negotiation by state actors, political instability
threatens fundamental alterations to the nature of
the state, government policy is capricious or harmful
to business, corruption is endemic across all levels
of officialdom, or regulations are onerous and their
implementation is capricious.
Security risk
Low security risk
Rwanda
Security conditions are broadly positive and occasional
and/or low-level challenges do not significantly impede
business. For example: the authorities provide adequate
security, organised crime only marginally affects business
and protest activity rarely escalates into threatened or
actual violence. Rare but large-scale terrorist attacks
may pose indirect threats to personnel or assets, or low-
level attacks do not target business and are not aimed at
causing casualties.
Medium security risk
Burundi,Kenya,Rwanda(BorderwithDRC),Tanzania,Uganda
Aspects of the security environment pose challenges to
business, some of which may be serious. For example:
there are some deficiencies in state protection, organised
criminal groups frequently target business through
fraud, theft and extortion, domestic terrorist groups
stage regular attacks that cause disruption to (but do
not target) business or there are infrequent large-scale
and/or opportunistic small-scale attacks on foreign or
business assets and personnel.
High security risk
Burundi (North Western Provinces), Kenya (Nairobi,
Mombasa, Northern and Eastern Areas), Uganda(North-
Eastern Areas, and border with DRC)
The security environment presents persistent and
serious challenges for business; special measures are
required. For example: state protection is very limited,
insurgents are engaged in a sustained campaign affecting
business, kidnap poses a severe and persistent threat to
foreign personnel, terrorist groups stage regular attacks
against foreign or business assets, or weak security
forces are incapable of dealing with the terrorist activity.
Source: Control Risks, 2015
Political risk
Medium political risk
Kenya, Rwanda, Tanzania, Uganda
Aspects of the security environment pose challenges to
business, some of which may be serious. For example: there
are some deficiencies in state protection, organised criminal
groups frequently target business through fraud, theft and
extortion, domestic terrorist groups stage regular attacks
thatcausedisruptionto(butdonottarget)businessorthere
are infrequent large-scale and/or opportunistic small-scale
attacks on foreign or business assets and personnel.
High political risk
Burundi
The political and operating environment presents
persistent and serious challenges for business. For
example: there is a credible risk of contract repudiation
Burundi

Starting a business
EAC Culture
Ending the meeting Follow-up after meeting Keeping in touchEye contact Small talk before starting
It is a sign of respect to lower your
eyes when greeting someone of a
higher status or someone who is
obviously older than you.
Meetings seldom have scheduled
ending times since what matters
is finishing the meeting in a
satisfactory manner to all
concerned.
There may sometimes appear to
be a gap between what people
say can, may, or will happen in
business, and what actually does
happen.
Diligent follow-up and phone calls
are imperative, as is the noting
down and circulation of who is
supposed to be doing what.
Most business relationships take
time to develope and keeping
in touch is imperative. Regular
contact must be maintained. How
to keep in touch depends on the
industry, but letters, emails, phone
calls, even text messages work
equally well.
To rush a greeting is extremely rude.
Take the time to inquire about the
other person’s general well-being,
family, and business in general.
Small talk is not goal-oriented,
it’s meant to establish a common
ground as similarity breeds
attraction.
It is a good idea to allow your host
determine when it is time to begin
the business discussion.
EAC National Cultures Compared to Norway
In the business world, communication is imperative for the
successful execution of daily operations. Understanding cultural
differences and overcoming language barriers are some of the
considerations people should have when dealing with business with
people of various cultures. Often business deals are lost because
the parties involved did not take the time to learn about each
others’ cultures prior to interacting.
Power Distance Index (PDI)
Power distance is defined as the extent to which the less powerful
members of organisations within a country expect and accept that
power is distributed unequally.
The EAC member countries have high scores ranging from 64-70,
which means the following in:
Society: People accept a hierarchical order in which everybody has a
place and which needs no further justification.
Business: Hierarchy in an organisation is seen as reflecting inherent
inequalities, centralisation is popular, subordinates expect to be told
what to do and the ideal boss is a benevolent autocrat.
Norway has a low score of 31 on this dimension, which means the
following in:
Society: Being independent, hierarchy for convenience only.
Business: Power is decentralized and managers count on the experience
of their team members. Employees expect to be consulted. Control is
disliked and attitude towards managers are informal and on first name
basis. Communication is direct, participative and consensus orientated.
Masculinity vs Femininity (MAS)
Ahighscore(masculine)onthisdimensionindicatesthatthesocietywill
bedrivenbycompetition,achievementandsuccess,withsuccessbeing
definedbythewinner.Alowscore(feminine)onthedimensionmeansthat
thedominantvaluesinsocietyarecaringforothersandqualityoflife.
The EAC member countries have scores ranging from 40-60, which
means the following in:
Society: “Masculine” where behaviour in school, work, and play are
based on the shared values that people should “strive to be the best
they can be” and that “the winner takes all”.
Business: They are proud of their successes and achievements in life, and
these offer a basis for hiring and promotion decisions in the workplace.
Conflicts are resolved at the individual level and the goal is to win.
Norway has a score of 8 on this dimension, which means the following in:
Society: “Feminine”, where quality of life is the sign of success and
standing out from the crowd is not admirable.
Business: An effective manager is a supportive one, and decision
making is achieved through involvement.
Uncertainty Avoidance Index (UAI)
The dimension has to do with the extent to which the members
of a culture feel threatened by ambiguous or unknown situations
and have created beliefs and institutions that try to avoid these is
reflected in score.
The EAC member countries have scores ranging from 50-56,
indicating no clear preference on this dimension.Norway has a score
of 50, indicating no clear preference on this dimension.
Individualism vs Collectivism (INV)
In Individualist societies people are supposed to
look after themselves and their direct family only. In
Collectivist societies people belong to ‘in groups’ that
take care of them in exchange for loyalty.
The EAC member countries have low scores ranging from
25-30, which means the following in:
Society: Collectivistic which is evident in a close, long-
term commitment to the member ‘group’, be that a family,
extended family, or extended relationships. Loyalty in a
collectivist culture is paramount and overrides most other
societal rules and regulations.
Business: offence leads to shame and the loss of face,
employer/employee relationships are perceived in moral
terms (like a family link), hiring and promotion decisions
take account of the employee’s in-group and management
is the management of groups.
Norway has a score of 69 on this dimension, which means
the following in:
Society: Considered an individualistic society. This means
that the “Self” is important and individual, personal
options are valued and expressed. Communication
is explicit and the right to privacy is important and
respected.
Business: There are clear lines between work and private
life. Job mobility is higher and one thinks in terms of
individual careers. The employer employee relationship
is based on a contract and leaders focus on management
of individuals. Feedback is direct and nepotism is not
encouraged.
Prior to the meeting HandshakeArriving at the business meeting
Appointmentsshouldideallybemade
atleasttwoweeksinadvance,andit’s
imperativethattheyarereconfirmed
twoorthreedaysbeforethemeeting.
Meetingschedulesmaybe
structuredornotatalldepending
upontheownershipofthecompany.
Makesureyoureserveenoughtime
togettothemeetingastrafficisnot
uncommonespeciallyinthecapital
cities.
Depending on the country
punctuality for meetings is not
always the norm, do show up on
time but expect some delays.
Titles are important. Use the
honorific title plus any academic
or professional title and the
surname.
Wait to be invited before moving
to a first name basis.
Business cards are exchanged
without formal ritual.
Present and receive business
cards with two hands.
Seating is usually hierarchical
and meetings often begin with
everyone standing up and
introducing themselves.
Handshakes are the most
common greeting in business.
When being introduced to
someone for the first time,
the handshake is short, while
handshakes among people with a
personal relationship are longer.
Male-Female Greeting
Men should wait for a woman to
extend her hand first.
Business
Etiquette and
Protocol
Source: Kwintessential, 2015
Figure 1.6: Geert Hofstedes cultural
dimensions: EAC compared to Norway
Source: Geert Hofstede 2015,
Global Journals Inc 2013
EAC National Cultures Compared to Norway
57+57+55+55+60+99+0+0
INV
 Burundi 27
 Kenya27
 Rwanda25
 Tanzania 25
 Uganda30
 Norway 69
82+82+80+80+86+80+0+0
UAI
 Burundi 52
 Kenya52
 Rwanda50
 Tanzania 50
 Uganda56
 Norway 50
95+94+100+100+95+61+0+0
PDI
 Burundi 65
 Kenya64
 Rwanda70
 Tanzania 70
 Uganda65
 Norway 31
71+71+90+70+87+38+0+0
MAS
 Burundi 41
 Kenya41
 Rwanda60
 Tanzania 40
 Uganda57
 Norway 8

Creating a Business Plan
The Information Office for Private Sector
Development in Developing Countries
The Information office works as the first point of contact for
companies with a serious interest of investing or doing business with
development countries. Offering advice and guidance related to the
available support schemes and financing possibilities. The information
office also offers feedback on your business plan and will also offer
quality assurance of your Norad application form for funding.
Visiting address: Ruseløkkveien 26, 6. etg., 0251 Oslo
Postal address; Pb. 1280, Vika  0111 Oslo
Office hours: 09:00-16:00
Tel: (+47) 23 98 00 33
Fax: (+47) 22 24 21 21
Email: post@veiledningskontoret.no
Website: www.veiledningskontoret.no
Support Schemes for Funding
NORAD - NORWEGIAN AGENCY FOR DEVELOPMENT
COOPERATION
Norad’s scheme for private sector actors is primarily aimed at
businesses / commercial companies seeking funding for feasibility
studies, training related to establishment, EHS and pilot production in
connection with private investment projects / business establishment.
Visiting address: Ruseløkkveien 26, 6. etg., 0251 Oslo
Postal address; Pb 8034 Dep., 0030 Oslo, Norway

Tel: (+47) 23 98 00 00
Fax: (+47) 22 24 21 21
Email: postmottak@norad.no
Website: www.norad.no
GIEK - THE NORWEGIAN EXPORT CREDIT GUARANTEE
AGENCY
The Norwegian Export Credit Guarantee Agency’s (GIEK) guarantees
provide competitive financing for foreign buyers of Norwegian export
– and security for the Norwegian exporter.
Visiting address: Dronning Mauds gate 15, 0250 Oslo
Postal address; PO Box 1763 Vika, N-0122 Oslo
Tel: (+47) 22 87 62 00
Fax: (+47) 22 83 24 45
Email: postmottak@giek.no
Website: www.giek.no
Employers Organisations in EAC

Employers’ Organizations are entities that promote the collective
interest of business, across sectors, irrespective of enterprise size.
The organizations represent their respective country in tripartite
forums and belong to the East African Employers organizations
(EAEO), as well as representing employers in the International Labour
Organization (ILO).
Key activities for the employer’s organizations are:
• Policy advocacy
• Training on Industrial relations, legal and management areas
• Consultancy on industrial relations
• Project management
• Business networking
• Labor/HR, Industrial relations and Business solutions
• Research Publications on labor issues
• CSR for members
East African Employers Organization
Dr. Aggrey Mlimuka, General Secretary
Tel: (+255) 78 460 3517
Email: info@eaeo.or.tz / Website: www.eaeo.or.tz
Federation of Kenya Employers (FKE)
Ms. Jacqueline Mugo, Executive Director
Tel: (+254) 27 219 29/48/49/52
Email: fkehq@fke-kenya.org / Website: www.fke-kenya.org
Federation of Uganda Employers (FUE)
Ms. Rosemary Ssenabulya, Executive Director
Tel: (+256) 772 480 097
Email: info@fuemployers.org / Website: www.fuemployers.org
Association of Tanzanian Employers (ATE)
Dr. Aggrey Mlimuka, Executive Director
Tel: (+255) 22 276 2158/9
Email: mlimuka@ate.or.tz / Website: www.ate.or.tz
Private Sector Federation (PSF) of Rwanda
Mr. Manzi Antoine, Director of Labour
Tel: (+250) 788 301 410
Email: antoinem@psf.org.rw / Website: www.psf.org.rw
Zanzibar Employers Association (ZANEMA)
Mr. Salahi Musa Salahi, Executive Director
Tel: (+255) 777 424 797
Email: manpowerservices52@yahoo.com / Website: N/A
Association of Employers of Burundi (AEB)
Mr. Louis Ndabahagamye, Executive Director
Tel: (+257) 768 070 22
Email: ndabahagamyelouis@rocketmail.com / Website: N/A
Norwegian-African Chamber of Commerce
NORWEGIAN- AFRICAN BUSINESS ASSOCIATION (NABA)
NABA serves as a bridge between the Norwegian and African business
communities, and is the most relevant network for Norwegian
companies working in African markets. NABA offeres the following
services: Information and Analysis, Network and Facilitation, Advisory
and Advocacy. NABA has recently opened a regional office in Nairobi,
Kenya, for more information contact Regional Director of East Africa
Mr. Felix. Osok (+254) 20 76 06 100 or email: fo@norwegianafrican.no
Visiting address: Middelthuns gate 27, Majorstuen, Oslo
Postal address; P.O Box 1280 Vika, NO-0111 Oslo, Norway
Tel: (+47) 959 69 631
Fax: (+47) 22 24 21 21
Email: ef@norwegianafrican.no
Website: www.norwegianafrican.no
Useful Contacts - EAC
FINDING THE RIGHT PARTNER - INNOVATION NORWAY
Innovation Norway is a Norwegian Government agency established to
promote development of Norwegian enterprises through cooperation
and trade in the international market. Through their Business
Matching program, the agency facilitates the following services:
market check, partner search, company visit, partner agreement/
follow-up. Innovation Norway also serves as a commercial section of
the Norwegian Embassies in respective countries.
Visiting address; Eden Square, Westlands, Nairobi
Postal address; P.O Box 13799, 00800 Nairobi, Kenya
Tel: (+254) 20 76 06 100
Email: IN-EA@innovationnorway.no
Website: www.innovasjonnorge.no
Starting a business
Norwegian Stakeholders List for African Business
5 Criterias for Success in the EAC
01Gain international experience: test your
business in more established international
markets before starting out in East Africa.
02Find a good local partner: before entering the
market, commit time and energy, with emphasis
on ‘due diligence’, to partnering up. Local knowledge and
networks will greatly reduce overall risks, time and costs.
03Invest in your partner: Once you’ve identified
the best partner, build their capacity so they can
act as effective and professional local counterparts. East
Africa is an emerging market, so be aware that capacities
are also still emerging.
04Keep an eye on the wider value chain: In an
emerging market there is the potential for
weaknesses outside of your product/service area. Look
out for these and be prepared to invest where necessary
in support of your core business.
05Make sure your finance structure reflects
the realities: Setting up in the EAC will likely
take longer and require greater resources than in more
established markets. Traditional finance options are
unlikely to be available until you can present a very stable
and established business opportunity. Once you reach
this stage however, there will likely be greater interest
than in other markets.
Source: Innovation Norway East Africa, 2015

WE HELP YOU CREATE IMPACT
IN AND BEYONDYOUR BUSINESS
FK Norway supports staff exchange to promote responsible business development and
mutual transfer of expertise between companies in Norway and Africa.
In your FK exchange, an employee from your company goes to Africa or Norway to work. At the same time an employee
from the collaborating company comes to work in your organization. FK Norway welcomes partners who wish to
contribute to social development and have social responsibility at the core of their business.
WHAT YOU GET
SEEKING NEW PARTNERS
We are looking for businesses with a desire to make a difference
WHAT WE ACHIEVE
DESIGN WITHOUT BORDERS
MAKERERE UNIVERSITY
UGANDA // NORWAY
Increased technical and professional skills of
staff and company
New cultural skills and knowledge of local markets
International networks
An opportunity to make a change
Financial support and project counselling
Since year 2000, FK Norway has exchanged over 7500
individuals, cooperating with over 400 partners
worldwide. Funded by the Norwegian government,
we facilitate mutual learning and development of
institutions and local communities.
For more information, please visit our site:
www.fredskorpset.no
In Uganda, designer Neil Ryan
and colleagues develop useful
products and solutions that
help the local community. The
exchange between DwB and
Makerere University is one of
many fostering private sector
development and exchange
of ideas between Norway and
countries in Africa.
Photo:KjerstiGjemsVangberg
FK Norway: Fostering leadership for global justice, creating change on the ground and in our minds
Our priority countries: Sudan, Ethiopia, Kenya, Uganda, Rwanda, Burundi, Tanzania, Malawi, Mozambique, Zambia,
Zimbabwe, Madagascar and South Africa
BUSINESSCASE
Grunndok (ny).indd 1 22.05.2015 08:45:24
WE HELP YOU CREATE IMPACT
IN AND BEYONDYOUR BUSINESS
FK Norway supports staff exchange to promote responsible business development and
mutual transfer of expertise between companies in Norway and Africa.
In your FK exchange, an employee from your company goes to Africa or Norway to work. At the same time an employee
from the collaborating company comes to work in your organization. FK Norway welcomes partners who wish to
contribute to social development and have social responsibility at the core of their business.
WHAT YOU GET
SEEKING NEW PARTNERS
We are looking for businesses with a desire to make a difference
WHAT WE ACHIEVE
DESIGN WITHOUT BORDERS
MAKERERE UNIVERSITY
UGANDA // NORWAY
Increased technical and professional skills of
staff and company
New cultural skills and knowledge of local markets
International networks
An opportunity to make a change
Financial support and project counselling
Since year 2000, FK Norway has exchanged over 7500
individuals, cooperating with over 400 partners
worldwide. Funded by the Norwegian government,
we facilitate mutual learning and development of
institutions and local communities.
For more information, please visit our site:
www.fredskorpset.no
In Uganda, designer Neil Ryan
and colleagues develop useful
products and solutions that
help the local community. The
exchange between DwB and
Makerere University is one of
many fostering private sector
development and exchange
of ideas between Norway and
countries in Africa.
Photo:KjerstiGjemsVangberg
FK Norway: Fostering leadership for global justice, creating change on the ground and in our minds
Our priority countries: Sudan, Ethiopia, Kenya, Uganda, Rwanda, Burundi, Tanzania, Malawi, Mozambique, Zambia,
Zimbabwe, Madagascar and South Africa
BUSINESSCASE
Grunndok (ny).indd 1 22.05.2015 08:45:24
©GettyImages
SAFER, SMARTER, GREENER
THE TECHNICAL ADVISOR
TO THE OIL AND GAS INDUSTRY
DNV GL enables safe, reliable and enhanced performance in oil and gas projects and operations.
With local offices and personnel located in Africa, DNV GL can provide the services below:
n Risk management advisory
n Technical advisory
n Technical assurance, including certification
and verification and inspection
n Noble Denton marine assurance and advisory
n Offshore classification
n Software solutions
www.dnvgl.com/oilgas
NABA Business Guide EAC 2015 advert 190x112.5mm.indd 1 24/08/2015 13:34:11
Innovation Norway is a
Norwegian Government
Agency established to
promote development of
Norwegian enterprises,
among others through
cooperation with business
community and clients
in international markets.
Through its offices in
more than 30 countries it
serves as the Commercial
Section of the Norwegian
Embassies to facilitate
access to international
markets and cooperating
partners.
Innovation Norway East
Africa is a regional office
in Nairobi that covers
Kenya, Tanzania and
Uganda. We perform
market and partner
search in the region to
promote opportunities
for Norwegian companies
with relevant technology
and know-how.
We facilitate access to
markets, partners and
finance and provide
guidance during different
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trade and investment
opportunities identified.
Would you like to explore
your opportunities in the
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Please contact us!
www.innovationnorway.no
Innovation Norway
Nairobi, Kenya
IN-EA@innovationnorway.no
2015
IN_annonse_193x133_OK.indd 1 08.07.15 14.59

28 29
Part 2
EAC
Member
Countries
Photo: Gigawatt Project, Rwanda

NABA Business Guide - EAC 2015 BurundiPart 2 // EAC Member Countries30 31Snapshot of Burundi
Bujumbura
Burundi
Republic du
Capital city Bujumbura
President President Pierre Nkurunziza
Currencies Burundian Franc (BIF)
Government Presidental representative
democratic republic
Income level Low income
Languages French, Kirundi, English
Pres. election 2020
Forest area *
6.63 %
Surface area (including water)
27,834km2
Water
2,150 km2
Land
25,680 km2
Geographical indicatorsEconomic indicators
GDP (USD)
3bn
GDPGrowthrate
4.7%
Inflation(CPI)
4.4%
Total export vol. (USD)
113.6m
GDP p. c. (USD)
900
Total import vol. (USD)
873m
FDI (USD)
6.8m
Social indicators
12+88+F+11.2%
Urban
population
67+33+F+67.2%
Literacy rate
Population
10.48m
Population density
391.9per km2
Growthrate
1.85%
Unemplotment rate 35%
Life expectancy 53.6
Time zone GMT+2
Dial code +257
Internet domain .bi
Main telephone lines in use 17,400
Mobile cellular users 3.193 m
Internet users 157,800
Christian 82.8%
 R. Catholic 61.4%
 Protestant21.4%
 Muslim 2.5%
 Adventists2.3%
 Other6.5%
 Unknown 5.9%61+21+3+2+7+6++F+Religion
85+14+1++F+Ethnic
groups
 Hutu (Bantu) 85%
 Tutsi (Hamitic) 14%
 Twa (Pygmy) 1%
Practical information
Currency 
Burundian Franc (BIF) 1000 BIF = 5.3 NOK
(September 2015).
Notes are available in denominations of 10, 20,
50, 100, 500, 1000, 2000, 5000, 10 000 francs.
Coins are available in denominations of 1, 5,
10 francs.
Power / Phone 
Power Voltage: 220V. Two-pin socket.
There is GSM coverage in cities, urban areas
and tourist areas. The operators Africell,
Econet Lacell and Telecel-Burundi offer 3G
network.
The country code for Burundi is +257.
Emergency numbers 
Police:117
Ambulance: 257-225-050 or
257-228-435
Fire brigade:118
Credit cards 
Burundi is a cash based economy. Payment
by VISA / Mastercard / American Express is
not widespread in Burundi and restaurants
and larger grocery stores / shops only accept
cash. Opportunities to withdraw money with
credit cards is limited. Power outages and
connectivity issues mean that the opportunities
are not considered reliable. Most hotels do
not accept credit cards, but more hotels in
Bujumbura accept payment in U.S. dollars or
Euros from foreign guests. Travelers should be
aware that the Burundian banks do not accept
US dollar bills printed before 2006.
Official hours 
Normal opening hours bank, government
offices and shops:
Bank: Mon-Fri: 09:00 - 15:00
Grocery: Mon-Sat: 08:00 - 18:00
Sun: 08:00 - 13:00
Public office: Mon-Fri: 08:00 - 17:00
Post office: Mon-Fri: 07:30 - 12:00
and 14:00 - 17:30
Sat: 08:30 - 12:00
Official holidays 
1 January New Year’s Day
5 February National Unity Day
8 March International Women’s Day
18 April Good Friday
21 April Easter Monday
1 May Labour Day
1 July Independence Day
28 July Eid al Fitr
15 August Assumption Day
13 October Prince Rwagasore’s Day
21 October President Ndadaye s Day
1 November All Saints’ Day
25 December Christmas Day
Travel information 
VISA REQUIREMENTS - For official business: A letter from the
government/company in Burundi. The passport must be valid for at least
6 months after travel is completed. Tourist visa can be purchased at
the airport in Bujumbura, extension can be done with local immigration
authorities “La PAFE”.
VISA FEES - Business visa EUR 65
HEALTH - Malaria occurs throughout the country. We recommend
vaccination against hepatitis AB, polio, diphtheria-tetanus-pertussis,
typhoid, and yellow fever. There have been cases of cholera in the country
in recent years. Burundian authorities may require vaccination card upon
entry.
FLIGHTS - Few international airlines fly into Burundi, however there
are regular flights between regional hubs. Current flights available
to neighbouring countries Rwanda, Kenya, and Ethiopia who connect
Burundi to European and Americans hubs.
Embassy contact details  
Norwegian Embassy In Uganda accr. to Burundi
Ambassador: H.E. Susan Eckey
City: Kampala, Uganda
Tel: (+256) 417 11 2000
Internet: www.norway.go.ug
E-mail: emb.kampala@mfa.no
Visiting address: Plot 18B Akii-Bva Road, Nakasero,
Kampala, Uganda
Embassy of Burundi in Norway
Ambassador: H.E. Pascal Ruhomvyumworo
City: Oslo
Tel: (+47) 213 85 782
Internet: www.burundi-embassy-oslo.org
E-mail: info@burundi-embassy-oslo.org
Visiting address: Oscars gate 57, 0258 Oslo, Norway
Source: The World Bank 2015, CIA 2015
* % of land
Source: UD 2014

NABA Business Guide - EAC 2015 BurundiPart 2 // EAC Member Countries32 33Macroeconomic Overview
5 Reasons to Invest in Burundi
01 Access to markets: Member of economic
communities CEPGL, COMESA, EAC totalling
more than 20 countries and 450 million
consumers.
02 Capital transfer: Free transfer of foreign capital
and income after payment of taxes.
03 Tax advantages: Reduction of 2 and 5% in the
rate of tax credit on the profits of companies
that employ between 50–200 employees and
over 200 employees.
04 Businessenvironmentindeveloptment:Asetof
reformsinprogress:thetotalliberalizationofall
sectors,theprivatizationofstatesenterprises,etc
05 Low cost of labour: Compared to the EAC.
Source: Burundi Investment Promotion Authority, 2015
6 Essential Tips for Doing Business
By Hauge Micro Finance
01 Language: Have a healthy knowledge of French
or Kirundi
02 Local partner: Do thorough research and ask for
reference when looking for a business partner.
03 Establish a network: Get to know your business
partners and clients outside of work.
04 Cultural understanding: Take part in the
culture and society.
05 Staff: Execute a proper deployment of expats (in
ratio to local partners).
06 Safety: Do get insurance policies to mitigate
risk.
Source: Hauge Micro Finance, 2015
Greetings
Hello, good
morning!
Bwakeye /
Mwaramutse
What is your name?
Witwande?
(Response) My name
is ...
Jewe nitwa ...
How are you?
Urakomeye?
(Response) I’m well
Ego ndakomeye
Nice to meet you
Birabnezereye
kubonana nawe.
Goodbye, see you
N’agasaga
Good afternoon/
evening
Mwiriwe neza
Goodnight
Ijoro ryiza
General
Yes
Ego
No
Oya
Thank you very
much
Urakoze cane
(addressing one
person), murakoze
(more than 1 person)
You’re Welcome
Korerwa
Can you help me?
Woshobora kumfasha?
How much does it
cost?
Ugurisha amahera
angahe?
Do you speak
English?
Uravuga
icongereza?
Useful Phrases in Burundi
- Kirundi
Source: Enjoy Burundi, 2015
Strengths
• Natural resources (coffee, tea,
minerals)
• Integration with the EAC
• Existing distribution and sales
networks
Weaknesses
• Undiversifed economy vulnerable
to external shocks (exchange rate,
climatic risks and oil prices)
• Strong political tension
• Dependence on international aid
(50%of national budget)
Opportunities
• Growing economy
• New markets
• Growing demand
• Income level is at a constant
increase
Threats
• Political instability
• Lack of foreign currency
• Low skilled workforce
Source: BMI 2015
SWOT Analysis - Burundi
Macroeconomic Overview
Geography
Location
Burundi is located in Central Africa, east of the
Democratic Republic of Congo.
Natural resources
Nickel, uranium, rare earth oxides, peat, cobalt, copper,
platinum, vanadium, arable land, hydropower, nioblum,
tatalum, gold, tin, tungsten, kaolin, limestone.
Terrain
Hilly and mountainous, dropping to plateau in east, some
plains.
Climate
Burundi has two rainy seasons - the major one from
February to May, with a minor rainy season between
September and November, and two dry seasons: the
long dry season from June to August and the shorter dry
season between December and January.
Source: CIA 2015
Demographic overview
Although infant and child mortality rates are high,
Burundi’s birth rate is above average for central Africa,
yet its population is not growing at the same high rate
as other countries in Africa, in part because of the mass
killings associated with the civil conflict there. About
half of the population is under age 15, which assures a
continued high growth rate. Only a small proportion of
the population is considered urban, the majority of which
live in Bujumbura. Life expectancy in Burundi, although
low by world standards, is about the average for Africa.
Source: CIA 2015, EAC 2014, UN 2014
Average
temperature in
Burundi:
23.8
degrees Celcius.
Land use:
 Arable land
33.06%
 Permanent
crops
14.37%
 Other
52.57%
33+14+53++F+
Total population
10,162,532
Population growth rate
3.2%
Male
48.5yr
Life expectancy
53.6yr
Female
51.3yr
258,863
407,690
2,975,337
4,781,296
4,746,938
Total
0 - 14
15 - 24
25 - 54
55 - 64
65 +
Age Male Female
01 12 23 34Millions 4
2,385,571 2,361,367
3,775,679 1,005,617
1,483,936 1,491,401
190,707 216,983
109,434 149,429
Age distribution
Figure 2.1.1: Age distribution in Burundi - 2015

34 35NABA Business Guide - EAC 2015 BurundiPart 2 // EAC Member Countries Macroeconomic Overview
GDP by sector
 Service 47.2%
 Agriculture34.4%
 Industry18.4%
Labour force
occupation
 Agriculture93.6%
 Services 4.1%
 Industry2.3%
GNI per capita (USD)
280
Debt external
742.1
million USD.
47+35+18++F+
94+4+2++F+
Real GDP growth Burundi compared to East Africa and Africa
2012 2013 2014 20152008 2009 2010 20112004 2005 2006 2007
4
1
8
3
0
7
6
10
5
2
9
Real GDP growth (%) Eastern Africa (%) Africa (%)
Economic snapshot
Burundi continues to rebuild its economy after a civil war that lasted
nearly twelve years. Political stability and the end of the civil war have
improved economic activity and aid flows.
Burundi’s economy is based predominantly on agriculture. Although
Burundi is potentially self-sufficient in food production, the civil war,
overpopulation, and soil erosion have contributed to the contraction
of the subsistence economy by 30% in recent years. Large numbers of
internally displaced persons have been unable to produce their own
food and are dependent on international humanitarian assistance. Food
imports accounted for 12.5% of total imports value in 2009.
The development of economic relations with new partners has opened
up new opportunities that will help Burundi to diversify its markets and
sources of aid. China stands out as the country’s key emerging partner.
Source: African Economic Outlook, 2014
Risk Rating Snapshot
Burundi Economy
Diversity of the Economy Relatively diverse
GDP GrowthLow
Banking SectorUnder developed
Forex ReservesWeak
Foreign Investment Below potential
InfrastructureWeak
Socio-Economic DevelopmentLow
Continuity of Economic PolicyGood
Stock MarketN/R
Listed CompaniesN/R
Market CapN/R
Dominant Sector Food Beverages
Daily Trading VolumeN/R
LiquidityPoor
Credit Ratings:
SP N/R
FITCH N/R
MOODY’S N/R
Source: KPMG 2014
Economic overview
After accelerating slightly in 2014, growth is expected
to hold up in 2015. Activity depends mainly on coffee
production in a country whose economy is still driven by
the agricultural sector, which contributes over a third
of GDP and employs nearly 80% of the population. In
2015, coffee production is expected to rebound, while
tea production will benefit from past investments.
Growth in agricultural production will, however, suffer
from productivity shortcomings and difficult access
to finance. Despite the adoption of a new mining code
at the end of 2013, the mining sector will be limited to
small scale mining. Indeed, the development of industrial
nickel mines remains blocked by problems of energy
supply and the lack of infrastructures. In this regard, the
construction sector is expected to benefit from public
investment and numerous, especially hydroelectric,
infrastructure programmes, supported by international
donors and an Extended Credit Facility from the IMF.
Meanwhile, closer integration in the EAC (East African
Community) is expected to foster investment in trade
and tourism.
As in 2014, inflation is expected to continue to slow
in 2015, due to the moderation in the prices for
imported goods (particularly food and hydrocarbons).
Nevertheless, the depreciation of the Burundian franc or
the relaxation of fiscal policy before the 2015 elections
could sharpen inflationary pressures.
Source: The World Bank 2015
Trade
Burundi’sprimaryexportsarecoffeeandtea,whichaccount
for90%offoreignexchangeearnings,thoughexportsare
arelativelysmallshareofGDP.Burundi’sexportearnings
anditsabilitytopayforimportsrestprimarilyonweather
conditionsandinternationalcoffeeandteaprices.Burundi
hasadoptedatradeliberalizationpolicy.TheGovernmenthas
abolishedquantitativerestrictionstoimportsandinstituted
thefreedomoffixingprices.Furthermore,theGovernment
sectoronthepricestructureofselectstrategicproducts
forthenationaleconomy,inlinewiththeWorldTrade
Organisation(WTO)andCOMESArulesandregulations.
Source: Coface 2014, ALN 2015
Bi-lateral and multi-lateral treaties
Burundi is a member of the African Union (AU), the
Common Market for Eastern and Southern Africa
(COMESA), the East African Community (EAC), the
Economic Community of the Great Lakes Countries
(ECGLC) and the World Trade Organisation (WTO).
Burundi has entered into bilateral investment treaties
with Belgium, Germany, Mauritius, UK, Comoros and
Netherlands. Double tax treaties with some East African
Community countries, Common Market for Eastern and
Southern Africa countries, Egypt and France are in the
process of negotiation.
Source: ALN 2015
Main Import Goods:
Machineryand
transportation
equipment,Petroleum
products,Motor
vehicles,Ironand
steel,Resins,Plastics
Main Import
Partners
 India 20.9%
 China15.4%
 UAE9.8%
 SaudiArabia 6.9%
Main Export Goods:
Tea, Horticultural
products, Coffee
Petroleum products,
Fish, Cement
Main Export
Partners
 Uganda 10.3%
 Tanzania10%
 Netherlands7.7%
 UK7.2%
 US6.3%
 Egypt4.8%
 D.R.Congo4.4%
21+15+10+7++F+
10+10+8+7+6+5+4++F+
Trade snapshot
According to the World Bank the process of importing
goods for takes 9 documents, 43 days and costs
USD 4,420 per container. Burundi’s import process
for trading goods has improved, and ranked 169
out of 189 countries surveyed, up two places from
last year. The process of exporting goods for takes
9 documents, 32 days and costs USD 2,905 per
container. Burundi’s export process for trading goods
has improved, and ranked 169 out of 189 countries
surveyed, up two places from last year.
Source: EAC 2014, KPMG 2014, Coface 2014
Political overview
Burundi is a presidential representative democratic
republic based upon a multi-party state. The President
acts as both the head of state and head of government
and serves for five year terms. Two vice-presidents assist
the President.
The Burundi Government is divided into three branches
including the Executive, Legislative and Judicial branch.
The Executive division comprises of the President and
the Cabinet, the Legislative comprises of a National
Assembly and a Senate while the Judicial section consists
of the Supreme Court and the other constitutional
courts.
The legislative branch in Burundi is comprised of the
National Assembly and Senate. Members of the National
Assembly are elected by popular vote to serve five year
terms and representation in the Assembly must be
consistent with 60% Hutu, 40% Tutsi, and 30% female
membership.
The next elections are scheduled for June 26, 2015.
Source: ALN 2015, The World Bank 2015
Figure 2.1.2: Real GDP growth Burundi compared to East Africa and Africa Source: African Economic Outlook, 2014
Macro Economic Indicators
Table 2.1.1
Major Macro Economic
Indicators
2012 2013 2014 2015 (f)
GDP (USD bn) 2.4 2.7 3.0 3.2
GDP growth (%) 4 4.6 4.7 4.0
Inflation (yearly
average) (%)
18 8 4.4 5.4
Budget balance (% GDP) * -20.6 -18.1 -16.4 -16.2
Current account
balance (% GDP)
-10.4 -8.3 -9.6 -23.7
Public debt (% GDP) 35.4 31.8 30 28.6
(f) Forecast * excluding grants

36 37NABA Business Guide - EAC 2015 BurundiPart 2 // EAC Member Countries Setting up a company in Burundi
Industry sectors
Agriculture
Agriculture forms the backbone of the country’s economy
and accounts for approximately 34% of GDP. Burundi’s
principal crops are coffee and tea and these contribute
nearly 90% of the country’s exports earnings. The
Government has attempted to attract private investment
into coffee production and processing. Producers normally
receive technical support from the State but now the
coffee sector in Burundi is being privatised, that is to say
that the bulk of activities are provided by the private
sector. There are private producers, millers, processors
and exporters.
The State is concerned solely with the regulation via the
Public Authority for Regulation of the Coffee Sector.
Otherwise, the rest is done within INTERCAFE Burundi a
private entity bringing together the various stakeholders
in the coffee sector at the national level. Other crops such
as corn, sorghum, sweet potatoes and bananas are also
produced (mainly as subsistence farming).
Financial banking services
Burundi’s formal banking sector is small in size and
remains at an early stage of development. Formal financial
services mainly cater for Burundi’s small elite of wealthy
business people and government officials. The majority
of Burundians are unbanked, relying on microcredit and
informal lending. Commercial banking is dominated by the
state and facilities are located primarily in urban areas.
The central bank is the Bank of the Republic of Burundi
(Banque de la République du Burundi, (BRB). While there
are no restrictions on foreign investors’ access to local
credit, the resources in the local market are limited and
long-term capital is largely unavailable. However, there
have been several initiatives to improve the banking
sector, including opening the economy to foreign banks.
The country has experienced an increase in new products
and technology within the financial sector, including
telephone and internet banking.
Mining
There is potential wealth in petroleum, nickel, copper and
gold, and although the mining and energy sectors have
recorded positive growth in the years following 2009,
these resources remain largely under-exploited. It should
be noted, however, that China and Qatar have expressed
interest in investing in mining in Burundi. In addition, a
UK-based company has also recently undertaken a seismic
study of Lake Tanganyika during oil exploration in Burundi.
Manufacturing
Most secondary sector operations concern the processing
of agricultural products and light consumer goods such as
blankets and other textiles, cigarettes, shoes and soap.
Telecommunications
There is a lack of a developed telecommunications
infrastructure in Burundi. The country’s telephone density
is one of the lowest in the world. The telephone system
is a sparse system of open-wire, radiotelephone and low
capacity microwave radio relays. Cellular telephone usage
is increasing but uptake and penetration is generally slow.
With regard to internet network, it is important to note
that since 2013, the construction work of the fiber optics
national backbone has been launched throughout the
country. There are at present at least three main mobile
telecoms companies, one of them being state-owned.
Energy
The Ministry of Mines, Directorate of Energy is
responsible for the energy sector within the country. Regi
des Distribution d’Eau et d’Electricite (REGIDESO) the
national power authority, owns all the country’s power
plants, excluding those below 150kW, and is responsible
for power distribution in urban areas. The Government
is currently promoting peat production and is fostering
the development of renewable energy resources, such
as solar electricity and biogas. Also, big project to build
a hydro-electric dam over Jiji and Murembwe rivers is in
progress and works are due to start in 2015.
Source: ALN 2015
Agriculture accounts
for approximately
34%
of the GDP of
Burundi.
Coffee and tea
contribute nearly
90%
of the country’s
export earnings.
Setting up a company in Burundi
Business Environment
ThechallengesofBurundi’sbusinessclimatemeanstheprivatesector
issmallandrelativelyunderdeveloped.However,tremendousefforts
havebeendevotedtoinvestmentspromotion.Procedures,timeand
costsrelatedtobusinessregistrationhavebeensignificantlyreduced
forthebenefitoftheinvestorasevidencedbythelastreportthereon
producedandmadeofficialonMay29,2012andsenttotheWorldBank
andtheInternationalFinanceCorporationforevaluationintheDoing
BusinessReport2013.Anotherimportantreformtobehighlightedis
theestablishmentofaonestopcenterforbusinessregistration(guichet
uniquepourlacréationd’entreprises),allowingcompanyregistrationvia
asingleprocedureandwithinjust24hoursforlessthanUSD40.
The Doing Business Report 2015 ranks Burundi 152nd out of 189
economies assessed in ease of doing business. It is a very encouraging
ranking, which reflects the commitment and determination of the
country to always move forward in improving the business climate.
Regulatory Environment
Legal Forms of Incorporation
ProceduresforincorporationofcompaniesinBurundihaverecentlybeen
significantlyreducedandcentralized.AnewCompanyActwasenactedon
May30,2011.TheprincipalformsofbusinessarrangementsinBurundi
arethe(public/private)limitedliabilitycompany,jointventure,sole
proprietorships,partnership,trustandbranchofaforeigncompany.
Accounting Principles
Burundi’s accounting principles meet international relevant standards.
An independent organisation of accountants has been created and is
fully functional. All enterprises and tax payers are obliged to comply
with the national accounting system and to have their annual tax
returns drafted and submitted by certified accountants.
Foreign Investment
The Government of Burundi’s (GOB) official attitude toward foreign
direct investment is reflected by the Investment Code adopted in
September 2008, which aims to attract and reassure foreign investors.
The Code encourages and promises to facilitate acquisitions, as well as
the production, transformation, and distribution of goods and services.
Intellectual Property
Burundi is a signatory to a number of international agreements on
patents and intellectual property, including the World Intellectual
Property Organisation (WIPO), the Paris Convention and the
Agreement on Trade-Related Aspects of International Property
Rights (TRIPS). However, given Burundi’s subsistence level economy,
the intellectual property regime is largely underdeveloped.
A new intellectual property law was enacted in 2007. Although it is
compliant to international standards, it has not yet been implemented.
Investment Promotion Agency
Burundi Investment Promotion Agency (API) is the national
body responsible for development and investment promotion
in Burundi.
Imports Exports
Burundi’s primary exports are coffee and tea, which account for
90% of foreign exchange earnings, though exports are a relatively
small share of GDP. The dependence of the export sector on a single
commodity has made the economy vulnerable to upswings in prices
on the international market.
Burundi has joined the East African Community and is lowering its
tariffs to bring them in line with other EAC member countries.
Consumer Protection
Thereareexistingsectoralpolicies,legalandregulatoryframeworks
inplacethathavemeasuresonconsumerprotection.Theexisting
sectoralpoliciesandlawsonconsumerprotectionareunder
thecommunications,electricity,dairy,pharmaceuticals,water,
broadcastings,insurance,bankingandstandardsandsafetylegislations.
Exchange Control
TheliberalizationofBurundi’sexchangecontrolsystemwasstartedby
theCentralBankinMay1992andcompletedinDecember2006.The
CentralBankisresponsibleforholdingandmanagingforeignexchange
reservesandhasthepowertobuyorsellgoldandenactregulationson
foreigncurrencytransactions.Accesstocreditdependsonthebankor
financialinstitution.Withtheliberalizationofexchangecontrol,banks
arenowfreetofixinterestrates.
Burundi’snewInvestmentCodeallowscompletelyfreeaccesstoforeign
exchangeforinvestmentremittances.Whilsttherearenoregulatory
barrierstoobtainingforeignexchange,muchdependsonavailability
withinBurundi’sCentralBank.Moreover,thereisnostatedlegallimit
ontheinfloworoutflowoffundsforremittancesinprofits,debtservice,
capital,capitalgains,returnsonintellectualproperty,orimportedinputs.
Competition
Burundi adopted competition legislation in March 2010 but the
regulatory authority, the Competition Commission, has yet to
become operational.
Dispute Settlement
The Burundian legal system is largely based on German and
Belgian civil codes and customary law. The constitution guarantees
the independence of the judiciary. Judges are appointed by the
executive branch.
Photo: Hauge Microfinance

38 39NABA Business Guide - EAC 2015 BurundiPart 2 // EAC Member Countries Setting up a company in Burundi
Commercial and investment disputes are normally
settled by commercial courts, which have original and
appellate jurisdiction. Since 2005, the code on judicial
competence has introduced provisions on arbitration. In
2007, the Burundian Government created a centre for
arbitration and mediation to deal with such disputes.
It is worth mentioning that the investment code allows
the competence of international arbitration chambers
for disputes arising over investments made in Burundi.
Burundi is a member of the Multilateral Investment
Guarantee Agency (MIGA) and the International Centre
for Settlement of Investment Disputes (ICSID).
Resolving Insolvency
Time to resolve insolvency (years) in Burundi was last
measured at 5 in 2014, calculated from the time of filing
for insolvency in court until the resolution of distressed
assets.
Access to finance
Bank Loans
Lack of affordable financing is another impediment to
business. Loans are generally short- term with interest
rates ranging from 20-24%. In addition to high rates, little
liquidity exists for loans over three years.
Getting Credit
According to the World Bank 2015 getting access to
credit rates 2 in terms of strength of legal rights, Burundi
ranked 171 of 189 countries surveyed, down 2 places
from last year.
Terms of payment for product or services
Credit is an important feature of the market. All the
common forms of arranging payment are in use in
Burundi. The most common payment cycle is 90 or 120
days. Extended credit terms for large items of capital
equipment are often critical to the success of a project.
The best method of payment is a confirmed irrevocable
letter of credit drawn on a reputable bank.
Source: UKTI, 2013
Access to natural resources
Electricity
Both the cost and availability of electricity remains
a challenge. In Burundi, only four percent of the
ten million-large population currently has access to
electricity, marking some of the lowest access rates
anywhere in the world. The development objective of the
Jiji-Mulembwe hydropower project is to increase the
supply of clean and low-cost hydropower electricity to
Burundi’s national grid. The project will almost double
the installed generation capacity in Burundi.
standards that allow for collective bargaining and freedom from
reprisal against employees who engage in union activities. However,
existing labour regulations are not always consistently enforced.
Work permits
All foreign citizens wishing to engage in employment or work are
required to obtain work permits which will be granted if it can be
demonstrated that a citizen of Burundi is unable to perform the job.
The fee payable for a work permit is as follows:
• Expatriate Employee and EAC partner states – three per cent of the
annual gross salary
Education
Sincetheintroductionoffreeprimaryeducationin2005,accesstobasic
educationisdistributedevenlyamongethnicgroupsandgenders.Looking
athighereducationlevels,discriminationagainstwomenisconsiderable
(withonly54%female-to-maleenrollmentintertiaryeducation,asopposed
to98%inprimaryeducation).Intermsofaccesstoemployment,ethnic
andgenderquotashavebeguntoimproveaccesstoopportunitiesforthe
hithertomarginalizedgroupsofHutuandwomen,butthisisonlythecase
wherethequotasapply(i.e.,inpoliticalandadministrativepositions).
Labour
Unskilled local labor is widely available. Workers from neighboring
countries (DRC, Rwanda and Uganda) often supplement a local
economy generally lacking skilled labor. Burundi has signed the
International Labor Organization (ILO) convention protecting
workers’ rights. In the private sector, labor-management relations are
generally conducted according to international standards that allow
for collective bargaining and freedom from reprisal against employees
who engage in union activities. Labor leaders in the public sector have
occasionally been subjected to harassment and arbitrary detention.
Therearenostatedpoliciesthatwouldallowdifferentialtreatmentof
labororrequirethehiringofhostcountrynationalsforcertainpositions.A
largelyuneducatedworkforcecannotbesaidtoimpedetheuseofadvanced
technologies,giventhatthelevelofdevelopmentinmostsectorsisalready
hamperedbyextremepovertyandlackofaccesstobasicutilities.

Enforcing contracts
According to the World Bank’s 2015 Doing Business Survey,
Burundi’s enforcing contracts process has not improved, and
ranked 158 out of 189 countries surveyed, same ranking as last
year. The process for enforcing contracts takes 44 procedures and
832 days and costs 38.6 percent of claim.
Source: AGR, 2013
Transport Logistics
Railways
Burundidoesnotpossessanyrailwayinfrastructure,althoughthere
areproposalstoconnect Burunditoitsneighboursviarailway.
Mostnotably,theEastAfricanRailwayMasterPlanisaproposalfor
rejuvenatingexistingrailwaysservingTanzania,Kenya,Ugandaand
extendingtheminitiallytoRwandaandBurundiandeventuallytoSouth
Sudan,Ethiopiaandbeyond.TheplanismanagedbyInfrastructure
MinistersfromparticipatingEACcountriesinassociationwithtransport
consultationfirmCPCSTransportInternationalLimited.
Roads
The Burundi roadways provide the opportunity to explore the
country by car. However, there is room for investment in the road
network programme. Additionally, the founding members of the EAC
decided, in collaboration with their development partners, to initiate
a draft regional network of roads to facilitate their integration. More
specifically, the ECA regional network consists of five corridors:
1. Corridor 1: Mombasa– Malaba – Katuna (linking the Kenyan coast
to Uganda and Rwanda)
2. Corridor 2: Dar–Es–Salaam – Isaka – Masaka (connecting the
Tanzanian coast to the East and Uganda)
3. Corridor 3: Biharamulo – Lockichogio (linking EasternTanzania,
Kenya, Uganda and South Sudan)
4. Corridor 4: Tunduma – Nyakanazi (linking the Southern and Eastern
Tanzania)
5. Corridor 5: Tunduma – Namanga – Moyale (linking Southern
Tanzania, Kenya and Ethiopia)
TheentryofBurundiintheproposedregionalroadnetworkisasignificant
Getting electricity
AccordingtotheWorldBanktheprocessofregisteringfor
electricitytakes5procedures,158daysandcosts16,367,3
percentofthecostifincomepercapita.AccordingtotheWorld
Bank’s2015DoingBusinessSurvey,Uganda’sregistrationfor
electricityprocesshasnotimproved,andranked182outof
189countriessurveyed,down4placesfromlastyear.
Water
The institutional and legal framework for Burundi’s water
sector has recently improved. The proportion of the
population supplied with drinking water has risen from
about 50% (2013) to 60% nationwide.
Source: African Economic Outlook, 2014, Water.org 2014, The World
Bank, 2015
Access to land
Real property
AnewLandActissoonexpectedtobepromulgatedin
Burundi.Currentlyaccessto,transferormortgageofland
isdonethroughacentralizedpublicofficeandnotary
interventionisrequiredforallestatetransactions.Onlyland
areassituatedinurbanzoneshavebeenregistered;land
areasoutsideurbanzonesremainunregistered.Accordingto
theinvestmentcode,freeaccessanduseoflandisallowedto
foreigninvestorswithoutanynationaldiscrimination.
Land rights
Conflict over land ownership is one of the most pressing
issues in Burundi today. Land is scarce and the return of
refugees creates conflicts over ownership. In many rural
areas, customary law deprives women of the right to
property and inheritance of land. Existing regulations –
including the National Commission for Land and Other
Possessions (CNTB), as well as the newly established
hill councils – are contested and so far have yielded
unsatisfactory results. Traditional conflict resolution
mechanisms were largely corrupted before and during the
war; as a result, they have lost credibility.
Registering a property
Businessesgenerallydeemacquisitionoflandwithacleantitle
asoneoftheirbiggestchallenges,andlanddisputesarecommon
inBurundi.AccordingtotheWorldBank’s2015DoingBusiness
Survey,Burundi’spropertyregistrationprocesshasimproved,
andranked48outof189countriessurveyed,up3places
fromlastyear. Theprocessforregisteringapropertytakes5
proceduresand23daysandcosts3.2%ofthepropertyvalue.
Access to human capital
Industrial relations
Burundi has signed International Labour Organisation
(ILO) conventions protecting workers’ rights. Industrial
relations are generally conducted according to international
Paying Tax - Tax Guide
Table 2.1.2 Source: Deloitte 2015, ALN 2015
Tax Resident Non-resident *Other
Income Tax *See other *See other Tax on wages is calculated according
to the income bracket and the rate
varies between 0% and 30%.
Corporate
Income Tax
30% 30%
Witholding
Tax
15% 15%
Customs *See other *See other Customs taxes, the general tariff
(for goods not originating from
East Africa) under the East African
Union stipulates import duty rates
of 0% for raw materials, 10% for
semi-finished goods and 25% for
finished goods.
Capital
Gains Tax
15% 15%
Value Added
Tax (VAT)
18% 18% *Standard rate 18%, 10% Imported
foodstuff, unprocessed agricultural
products and agricultural inputs
(fertilisers).
Stamp and
Transfer
Duty
*See other *See other Transfer duty for real estate
transactions is 3% of the market
value of the sold property.
Double Tax
Treaties
*See other *See other Burundi currently has no double tax
treaty with Mauritius.
Electricity
consumption
Figure 2.1.3
2005
2010
2000
2014
0
1
0.2
0.10.10.1
Water Supply
Coverage 2014
Figure 2.1.4
73%Rural
82%Urban
74%TOTAL

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