East Africa: 2015 Predictions for Businesses

Eran Feinstein, founder of 3G Direct Pay Limited
Eran Feinstein, founder of 3G Direct Pay Limited.
Eran Feinstein, founder of 3G Direct Pay Limited
Eran Feinstein, founder of 3G Direct Pay Limited.

2015 looks to be a great year for growth and innovation within the East African business community. Along with significant increases in tourism and advances in technology (for example, more robust mobile and Internet connections), we are seeing a much higher consumer usage rate of credit cards, mobile money, cell phones, and eCommerce sites. These conveniences and technological improvements all point toward greater overall prosperity for East Africans.

Foreign Direct Investment (FDI) Projects on the Rise

“In 2013, Africa’s share of global FDI projects reached 5.7 percent — its highest level in a decade. And an analysis of United Nations Conference on Trade and Development (UNCTAD) FDI data also reveals a story of steady progress: companies already established in the region are bolstering their presence and reinvesting their profits for growth.” (Ernst & Young’s Attractiveness Survey:  Africa 2014 Executing Growth).

According to the same report, various consumer-facing industries have also seen a steady rise in prominence over the last several years.

Percent of African FDI:

Industry 2007 Percent of Total FDI 2013 Percent of Total FDI
Technology, Media and Telecommunications 14% 20%
Retail and Consumer Products 12% 17%
Financial Services 12% 15%
Business Services 6% 12%

The growth in foreign direct investments in the region are proof that Africa is poised for an even more prosperous 2015.

Burgeoning Credit Card Industry

Credit card companies are putting a lot of stock in the East African market. The region continues to see significant inroads by the big players such as Visa, MasterCard, American Express, and others.

What’s driving this growth is the region’s upsurge in its middle class. In fact, East Africa now has the fastest growing middle class in the world. Other forces include a more sophisticated non-cash payment infrastructure that is able to reliably handle much larger amounts of electronic transactions. Japan and China card companies are focusing on East Africa as well.  China’s UnionPay, for example, is now accepted in Tanzania.

Skyrocketing Use of Mobile Money

For reasons of convenience and due to a lack of physical bank locations, especially in rural Africa, many Africans are taking to mobile money as a form of payment for goods and services. In Kenya and in Tanzania for example, over 60 percent of the population uses some form of mobile payments.

What’s also seeing an upsurge is the competition around mobile platform development. For instance, Equity Bank is launching a competing solution to the widely accepted mPesa in East Africa. The company is pushing a new innovative Thin SIM card in Kenya.

Along the same lines, eCommerce shopping is also seeing a big increase. Jumia and Rupu, for example, are both huge online retailers serving East Africa, and they are raking in the revenue doing it. Jumia only launched in 2013 and is already Kenya’s number one retailer, featuring over 50,000 products and having over 100 employees.  Rupu is also spiking in activity. Since its launch in 2010, the site has become wildly successful as Kenya’s version of the US’s Groupon.

Pervasive Adoption of Mobile Phones

Almost 74 percent of Kenyans now have mobile phones; the penetration rate in Rwanda is now 73 percent.  Rwanda, as an example, owes much of its increase to a recent public-private partnership between the Rwandan government and KT Corporation, a South Korean telecom service provider. Together they are launching the country’s first 4G LTE service, which will support 90 percent of the population by 2017. (Mobile World Magazine, December 4, 2014)


These advances in technical innovation and investment in East Africa appear to be just the beginning. More and more private infusion of capital from both local and foreign investors, is giving the region the resources it needs to bolster its infrastructure and collective set of service offerings. The result is a more empowered East African consumer who has access to better, safer, and more efficient ways of communicating, making purchases, and transferring money.

By Eran Feinstein, founder of 3G Direct Pay Limited, a global e-commerce and online payments solutions for the travel and related industries. With over 14 years of leading technology, sales, marketing and operation teams Eran is an authority in the East African e-commerce and payments arena.