This report introduces OECD tools and analysis to the East African Community (EAC). It is designed as a baseline diagnostic to explore ways to support investment climate reforms in the EAC while providing a greater focus on how to improve sustainable outcomes from investment. The report is also intended to provide insights to the EAC on the preparation of the EAC Investment Strategy, building on the existing EAC Investment Policy (2019). It also aims to support the revision of the EAC Model Investment Code (2006), which the EAC is currently undertaking to align it with the African Continental Free Trade Agreement (AfCFTA), and to provide an analysis of the EAC Model Investment Treaty (2016).
The report starts with an analysis of the impact of foreign direct investment (FDI) on selected areas of sustainable development in EAC Partner States based on the OECD FDI Qualities Indicators. The policy areas covered in this study include the legal framework for investment, including aspects related to protection and non-discrimination of investment, measures to promote and facilitate investment, the use and design of investment incentives, and the promotion of responsible business conduct. The selection of areas builds on the OECD Policy Framework for Investment (PFI) and highlights essential elements of a conducive investment climate, which promotes not only FDI but also sustainable development. The aim is not to provide a ready-made reform agenda for Partner States in the region but rather to explore policy areas that influence investment and its impact. It provides a solid basis for developing a long-term programme of collaboration with the EAC.
Under the overall guidance of Stephen Thomsen, Deputy Head of the Investment Division, the report has been prepared by a team led by Alexandre de Crombrugghe, which included Katharina Böhm, Taufeeq Khan Marcos, Fernando Mistura, Yasmina Najem, Zoé Ryan and Ana Laura Sobalbarro Herrera, from the OECD Investment Division, and Sebastian Weber from the OECD Centre for Responsible Business Conduct. It benefitted from inputs and comments from Fares Al-Hussami, Kiara Blome, Marie Bouchard, Laura Kuusela and Juan Felipe Rodrigo. The report benefitted from editorial assistance and was prepared for publication by Meral Gedik and Lucinda Pearson. The report was prepared in close collaboration with the Secretariat of the EAC and benefitted from comments from Charles Omusana, Principal Economist on Investment and Private Sector Promotion. The report has been financially supported by the Government of Finland.
The report was submitted to the OECD Investment Committee for comments on 6 September 2024 and then declassified by the Investment Committee on 11 October 2024.