The East African Insider – Week 24th -30th January 2026

Introduction

As January 2026 draws to a close, East and Central Africa continue to capture the attention of global investors with a series of landmark developments in finance, energy, infrastructure, and industrial expansion. This week’s trends reflect a growing push for fiscal discipline, regional integration, and large-scale investments across the continent. Afreximbank’s decision to exit its credit rating relationship with Fitch reignites the conversation around African-led rating models, emphasizing the need for context-sensitive assessments of multilateral institutions. In Tanzania, the long-awaited USD 42 billion LNG project nears its signing, positioning East Africa as an emerging hub for energy exports while the government mobilizes resources to fund ongoing infrastructure. Kenya’s upgrade to B3 by Moody’s signals improved macroeconomic stability, while Uganda accelerates its fiscal reform agenda with a sharp reduction in external funding and increased focus on domestic revenue mobilization. Burundi extends its regional footprint through a major fertilizer investment in Zambia, and the Democratic Republic of Congo moves to issue its USD 750 million debut Eurobond to finance critical infrastructure. Meanwhile, Somalia continues to negotiate further debt relief, aiming to consolidate the gains from its 2023 USD 4.5 billion write-off. Collectively, these developments highlight opportunities across energy, infrastructure, finance, and agribusiness, reinforcing the region’s growing appeal to foreign investors seeking both long-term returns and strategic entry into African markets.

Trend of the week

Afreximbank’s Fitch exit fuels momentum for African credit rating reform

Afreximbank has terminated its credit rating relationship with Fitch following a dispute over the agency’s June 2025 downgrade, a move that has reignited debate over how African multilateral institutions are assessed by global rating agencies. Fitch lowered the Bank’s long-term issuer rating to BBB- with a negative outlook, citing rising non-performing loans and weak risk management, claims Afreximbank strongly disputes. The Bank argues that Fitch’s methodology fails to account for its treaty-based legal protections, IFRS-compliant loan classification, and Africa-first development mandate agreed upon and ratified by its member states. Afreximbank maintains that its sovereign exposures are governed by a treaty framework that ensures repayment obligations, and has described Fitch’s assessment as analytically and legally flawed. The decision aligns with a broader continental push for rating sovereignty and renewed momentum to establish an African-based credit rating agency, amid growing criticism that global rating models systematically overstate African risk and inflate the cost of capital. While the dispute may introduce short-term uncertainty around Afreximbank’s external ratings, it also highlights deeper structural concerns about how African risk is priced, potentially reshaping future credit assessments, borrowing costs, and investor perceptions of African multilateral institutions over the long term.

Tanzania

Tanzania moves to finalise USD 42bn LNG investment as legal talks near completion

Tanzania expects to sign before June a long-awaited agreement for its USD 42 billion liquefied natural gas (LNG) project, marking a major step toward unlocking one of Africa’s largest undeveloped gas resources. The project, jointly operated by Equinor and Shell alongside partners including Exxon Mobil, Pavilion Energy, Medco Energi and state-owned TPDC, is designed to commercialise an estimated 47.13 trillion cubic feet of natural gas, with production targeted to begin in eight years. According to the government, commercial negotiations have been concluded and discussions are now focused on finalising the legal framework, reflecting the project’s scale as the largest single investment in Tanzania’s history. Together with developments in neighbouring Mozambique, the LNG project positions East Africa as a potential new LNG export hub supplying Asian markets. Separately, the government has instructed the central bank to sell part of its gold reserves to finance ongoing infrastructure projects, as some international partners have reviewed or delayed budget support following recent political tensions. For foreign investors, the imminent LNG deal signals renewed policy commitment to large-scale energy investments, long-term export revenues, and regional energy integration, albeit alongside near-term fiscal and political risks that warrant close monitoring.

Kenya

Kenya’s credit rating boost signals improved investment climate

Credit ratings agency Moody’s has upgraded Kenya’s long-term foreign currency sovereign rating from Caa1 to B3, reflecting reduced near-term default risk due to stronger external liquidity and higher foreign-exchange reserves. Kenya’s current account deficit has narrowed, and the shilling has stabilised, supported by rising international reserves, which reached USD 12.2 billion by end-2025 —enough for 5.3 months of import coverage. Improved growth in the construction sector and faster-than-expected agricultural expansion have also strengthened the economy. Moody’s notes that challenges remain, including high public debt, domestic borrowing costs, and slow fiscal consolidation, which cap the rating and leave Kenya sensitive to shifts in financing conditions. The agency revised the outlook to stable, signalling expectations that recent improvements in liquidity and financing will be sustained. The government is exploring new IMF programmes and alternative financing solutions, including debt-for-food swaps, to support development and infrastructure investment. The upgrade reduces sovereign risk, enhancing confidence for foreign portfolio and infrastructure investors in Kenya, while signalling greater stability in FX and macroeconomic conditions for medium- and long-term investments.

Uganda

Uganda signals stronger fiscal discipline with sharp cut in external funding

Uganda is accelerating a major shift in its fiscal strategy, with the Ministry of Finance announcing plans to cut external budget support by 84.2% year-on-year in the financial year starting July. External financing, largely made up of loans and grants is projected to decline sharply to USD 92.7 million, down from approximately USD 590 million in the previous year. While the ministry did not cite a specific trigger for the reduction, it emphasized a renewed focus on boosting domestic revenue mobilisation as the cornerstone of future public financing. Looking ahead, Uganda expects domestic revenues to rise by 9% to approximately USD 11.3 billion in the 2026/27 financial year, reflecting ongoing tax reforms and improved collection efficiency. In parallel, the government plans to reduce domestic debt issuance by 21.1% next year as part of broader efforts to rein in its public debt burden. These fiscal adjustments come as Uganda prepares to commence commercial crude oil production, a milestone expected to strengthen export earnings and fiscal buffers. Uganda’s move away from external budget support and its tighter debt management framework signal a shift toward greater fiscal discipline and long-term sustainability. For foreign investors, this enhances confidence in macroeconomic stability while reinforcing opportunities in sectors linked to domestic consumption, infrastructure development, energy, and oil-related value chains.

Burundi

Burundi expands regional footprint with major fertiliser investment in Zambia

Burundian company Itracom Fertilizer Limited has announced plans to construct a one‑million‑metric-tonne-per-year fertiliser plant in Zambia, aiming to reduce the country’s long-standing reliance on imported inputs. The company, which already operates fertiliser plants in Burundi and across East and Central Africa, cited Zambia’s abundant raw materials as ideal for large-scale production. Speaking after a meeting with Zambian President Hakainde Hichilema, Itracom chairperson Adrien Ntigacika said the project is expected to create approximately 5,000 jobs and position Zambia as a regional supplier once operational. President Hichilema welcomed the investment, highlighting its potential to strengthen domestic production, stabilise supply for the agriculture sector, and reflect growing regional economic partnerships. The initiative comes as Zambia continues to grapple with high fertiliser costs and import dependence, underscoring the importance of expanding local manufacturing capacity for improved food security and market stability. The project signals increasing regional industrialization and cross-border investment opportunities, while potential supply stability and local job creation may enhance Zambia’s attractiveness for investors looking at agribusiness and infrastructure-linked sectors.

Democratic Republic of Congo

DR Congo to issue USD 750M debut Eurobond, targeting infrastructure development

The Democratic Republic of Congo (DRC) is set to issue its debut USD 750 million Eurobond in April 2026, as part of a broader USD 1.5 billion issuance program, according to central bank governor Andre Wameso. The sovereign borrowing comes after S&P Global Ratings revised the country’s credit outlook to “positive” from “stable,” reflecting improving economic conditions and relatively low debt levels. Proceeds from the bond are expected to fund critical infrastructure development, with national experts and international advisors conducting due diligence to ensure a successful launch. The Eurobond issuance follows a trend of African sovereigns tapping international capital markets this year, including Benin’s successful sukuk issuance and Kenya’s upcoming second Eurobond. While the DRC benefits from improving market conditions, risks remain, particularly commodity price volatility and ongoing conflict in the east. For investors, this represents a first opportunity to gain exposure to a frontier African economy with growth potential, infrastructure needs, and improving credit metrics.

Somalia

Somalia renewed push for debt relief after USD 4.5bn reduction

Somalia is once again engaging with its international creditors to seek further debt relief two years after a major reduction that wiped out more than 90 % of its external debt under the Heavily Indebted Poor Countries (HIPC) Initiative. The roughly USD 4.5 billion write-off at the end of 2023 marked the end of a long journey of negotiations and economic reforms, but the government in Mogadishu continues to face fiscal pressure and is pursuing additional agreements with bilateral and multilateral lenders, including non-Paris Club creditors. As of late 2025, Somalia’s total debt stood at about USD 1.4 billion, split between multilateral and bilateral obligations, with ongoing talks aimed at securing more favourable terms and reducing arrears. At the same time, the country has sought additional support from the IMF to cushion its economy against shrinking aid and budget shortfalls, while real GDP growth is projected at around 3 % in 2025 and 2026 despite inflation stability and rising food costs. Continued creditor engagement and successful debt restructuring could help Somalia sustain its reform momentum and create fiscal space for development priorities, potentially improving macroeconomic stability and signalling a gradual reduction in sovereign risk for foreign investors assessing long-term opportunities in the country.

Upcoming events

Africa Tech Summit Nairobi 2026

Dates: 11–12 February 2026

Venue: Sarit Expo Centre, Nairobi, Kenya

Agenda:

Africa Tech Summit Nairobi 2026 brings together African and global technology leaders to explore innovation, connect key ecosystem players, and unlock investment opportunities across the continent’s fast-growing tech sectors.

How to register:

Participants can register online through the official Africa Tech Summit website via this link – https://www.africatechsummit.com/nairobi/register/

Who should attend:

• Technology founders and start-ups
• Venture capitalists, angel investors, and DFIs
• Fintech, DeFi, and crypto companies
• Mobile operators and tech corporates
• Regulators and policymakers
• Innovation hubs and ecosystem enablers
• International firms seeking African tech exposure

Key features

• High-level networking with African and international tech leaders
• Investor–start up matchmaking opportunities
• Insights into fintech, digital finance, Web3, and emerging technologies
• Policy and regulatory discussions shaping Africa’s digital economy
• Showcasing of high-growth African start-ups
• Platform for cross-border partnerships and deal-making

Opinion of the week

“Health-tech in Africa is solving for scale by necessity. The models born here will influence global innovation. Investors can help accelerate life-changing solutions.”

Dikla Treves- Director, Health-Tech Venture Studio

Conclusion

As January comes to a close, East and Central Africa demonstrate a dynamic investment landscape, balancing large-scale projects, fiscal reforms, and regional economic integration. From Tanzania’s imminent USD 42 billion LNG deal to Uganda’s shift toward domestic revenue-driven financing, and Kenya’s improved credit rating, the region is signalling growing macroeconomic stability and strategic opportunities. Burundi’s expansion into Zambia and DRC’s debut Eurobond issuance highlight cross-border industrial and infrastructure potential, while Afreximbank’s move for rating sovereignty underscores Africa’s evolving financial maturity. For foreign investors, these developments present a diverse array of opportunities from energy and infrastructure to finance and agribusiness within markets poised for long-term growth and increasing regional influence.

Resources

1. The East African (2026)

https://www.theeastafrican.co.ke/tea/business-tech/afreximbank-fitch-sour-fallout-push-for-african-rating-agency-5340190

2. CNBC Africa (2026)

https://www.cnbcafrica.com/2026/tanzania-expects-to-sign-42-billion-mega-lng-project-before-june-minister-says

3. CNBC Africa (2026)

https://www.cnbcafrica.com/2026/moodys-upgrades-kenyas-rating-to-b3-on-improved-buffers-that-ease-default-risk

4. CNBC Africa (2026)

https://www.cnbcafrica.com/2026/uganda-says-to-cut-budget-support-by-84-in-next-financial-year

5. APA news (2026)

https://apanews.net/burundian-firm-to-build-fertiliser-plant-in-zambia/

6. CNBC Africa (2026)

https://www.cnbcafrica.com/2026/congo-to-issue-750-million-debut-eurobond-in-april-central-banker-says

7. The East African (2026)

https://www.theeastafrican.co.ke/tea/business-tech/somalia-courts-creditors-for-more-debt-relief-5340450