WHY EAST AFRICA IS RIPE FOR CROSS-BORDER COMMERCE AND MoR SOLUTIONS

The world has taken its eyes off Africa for too long, but as the global economy evolves, Africa is stepping into the spotlight as a leader and a viable market for opportunities and growth. One region that’s taking center stage is East Africa, with countries like Kenya and Uganda rising to prominence in cross-border commerce and international business expansion. As one of the fastest-growing economic blocs on the continent, East Africa is at the forefront of digital economies, regional integration, and global trade connections, making it a prime destination for businesses looking to expand.

Kenya, in particular, stands out as the largest economy in the region, with a GDP of over $110 billion as of 2024 according to Trading Economics. It serves as the region’s financial, logistics, and technology hub, earning its nickname as the Silicon Savannah. Kenya’s tech ecosystem is one of the most advanced in Africa, with over 200 tech hubs and startups raising $1.1 billion in funding in 2022 alone. The services sector, including a rapidly growing tech ecosystem, contributes over 50% of GDP, while agriculture remains a backbone of the economy, with tea, coffee, and horticultural products driving exports. Nairobi, Kenya’s capital, has become a key commercial center, attracting multinational corporations, startups, and investors alike.

Uganda, on the other hand, is a rising star with its own unique appeal. While agriculture remains a cornerstone—contributing about 25% of GDP and employing over 70% of the workforce—the country is rapidly diversifying. Gold exports have surged, and the services sector, including telecommunications and banking, is growing steadily. Uganda’s recent discovery of oil reserves, estimated at 6.5 billion barrels, is set to transform its economy, though production has been delayed and is now expected to begin by late 2026 or early 2027. This makes Uganda a prime spot for businesses willing to invest early and capitalize on its emerging potential.

And then there’s Rwanda—“Land of a Thousand Hills.” Recently gaining global recognition, the country and its government have maintained a strong focus on business-friendly policies, infrastructure development, and digital transformation, attracting foreign investors. Its strategic partnerships and efficient regulatory environment have made it an appealing market for businesses looking for a streamlined entry into East Africa.

There’s also Tanzania, the second-largest economy in the region, known for its rich natural resources and agricultural exports. With the Port of Dar es Salaam serving as a key gateway to landlocked neighboring countries, Tanzania is a major producer of gold and also exports coffee, cashew nuts, and cotton. Aside from playing a crucial role in regional trade and logistics, the country’s growing tourism industry also contributes significantly to its foreign exchange earnings.

Ethiopia has earned its reputation as a manufacturing powerhouse, with a strong focus on textiles, leather, and agribusiness. With over 120 million people, Ethiopia is one of the fastest-growing economies in the world. It provides a substantial consumer market, while its ambitious infrastructure projects, including the Grand Ethiopian Renaissance Dam, are set to boost industrialization and energy production.

And finally, there’s South Sudan, still in recovery from conflict but offering untapped potential in oil production and agriculture. With oil contributing over 90% of government revenue, the country is now exploring ways to diversify its economy and improve infrastructure. If stability is achieved, South Sudan’s strategic location and natural resources could make it an attractive destination for investment.

One of the most compelling aspects of East Africa is its strategic location and strong intra-regional ties. Kenya’s Port of Mombasa and Tanzania’s Port of Dar es Salaam provide vital access to global markets, while landlocked countries like Uganda, Rwanda, and South Sudan serve as gateways to the Great Lakes region and Central Africa. East African Community (EAC) members have established strong trade relationships with the EU, China, India, and neighboring markets, playing significant roles in imports, exports, and international trade.

The digital revolution in East Africa has further opened the door to cross-border trade and opportunities. 

• E-commerce is booming, fueled by mobile money and changing shopping habits. Last-mile delivery companies like Jumia and Sendy are bridging the gap between urban and rural areas. 

• Mobile payment solutions like M-Pesa and cross-border payment platforms like Flutterwave and Kyshi are simplifying transactions and driving financial inclusion. 

• And the governments in the region are also incentivizing foreign investors, with sectors like agriculture, energy, manufacturing, and technology ripe for investment and expansion.

With these opportunities, however, come challenges. Expanding into East Africa isn’t without its hurdles—bureaucratic inefficiencies, infrastructure gaps, and regulatory complexities can be daunting. This is where cross-border services and Merchant of Record (MoR) solutions become essential. For businesses to tap into this potential, they need the right infrastructure and support. That’s where Kyshi comes in:

• Simplified Market Entry: An MoR service like Kyshi’s handles local tax compliance, invoicing, FX conversions and payments without requiring a local entity. It sets you up to go live within hours

• Localized Payments: Kyshi  receives your payments from your customers in African local currencies using payment methods, while Kyshi settles you in your preferred currency in over 100+ destinations across the globe. .

• Regulatory Compliance: Navigating tax compliance, data protection, and cross-border financial rules and ensuring your business operates smoothly within the EAC and AfCFTA frameworks becomes easier with a MoR partner.

• Enhanced User Experience: Fast, secure, and familiar payment methods build trust and increase conversion rates.

So, what lies ahead for East Africa? The region is on an upward trajectory, driven by digital transformation, increasing internet penetration, and a young, growing population. Kenya is a global leader in renewable energy, with 90% of its electricity coming from green sources like geothermal, wind, and solar, while the African Continental Free Trade Area (AfCFTA) is creating new opportunities for regional trade. East Africa is no longer just a frontier market—it’s a thriving hub of opportunity and an emerging leader.