East African economies posted mixed results in the 2026 edition of the Africa Risk-Reward Index, a report Control Risks and Oxford Economics Africa published this year to measure how the continent’s 24 largest markets balance risk against investment reward.
Ethiopia posted the sharpest gains of any East African market, while Kenya’s fiscal position kept the country exposed despite a marginal risk score improvement.
The index combines a risk score and a reward score for each country, drawing on political and economic risk analysis alongside growth forecasts, economic structure and demographics. The report frames 2026 around what its authors call a resilience dividend, the capacity of governments and businesses to keep essential systems running when one supply channel or funding source closes.
What Stands Out In The Data
Ethiopia recorded the largest reward score jump in East Africa, rising to 7.52 from 6.95, a gain of 0.57 points that pushed its overall variation to plus 0.67, among the top five improvements on the continent alongside Ghana, DRC, Nigeria and Zimbabwe.
Kenya’s risk score improved to 5.65 from 5.96, yet its reward score held flat at 5.47. The report attributes this to a structural constraint rather than a temporary setback: public debt is projected to reach 70.7 percent of gross domestic product in 2026, with a fiscal deficit of 6.1 percent, leaving the government little room to absorb another shock. Kenya’s Treasury set its own budget deficit target at 4.9 percent of GDP for the 2026/27 fiscal year, a figure that shows the gap between fiscal planning and the debt trajectory the index tracks.
Fuel dependency on the Gulf region marks one of the report’s more notable findings for East Africa. Ethiopia sources 92 percent of its fuel and petroleum imports from the Gulf, the second highest dependency rate on the continent after Seychelles at 98 percent. Kenya and Uganda each rely on the Gulf for 70 percent of fuel imports, while Tanzania sits at 57 percent. The report notes that disruption in the Red Sea or Gulf can pass quickly into freight, food, fertiliser and retail fuel shortages for these markets.
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Malawi’s reward score fell by 1.02 points, the steepest drop of any country the index tracks. The report links this to external funding cuts, unsustainable public debt and depleted reserves that have left the kwacha substantially overvalued, with inflation approaching 40 percent by late 2026.
East African Rankings
| Country | Reward Score 2026 | Risk Score 2026 | Change In Reward | Change In Risk | Overall Variation |
|---|---|---|---|---|---|
| Ethiopia | 7.52 | 7.37 | +0.57 | -0.10 | +0.67 |
| Uganda | 6.71 | 5.85 | -0.34 | -0.24 | -0.11 |
| DRC | 6.50 | 7.51 | +0.47 | -0.12 | +0.59 |
| Tanzania | 6.33 | 5.32 | +0.14 | -0.11 | +0.25 |
| Kenya | 5.47 | 5.65 | 0.00 | -0.31 | +0.31 |
| Rwanda | 5.36 | 5.19 | +0.20 | -0.02 | +0.22 |
| Mozambique | 4.55 | 6.69 | +0.42 | +0.12 | +0.30 |
Reward scores run on a scale of 1 to 10, where a higher score signals stronger investment opportunity. Risk scores also run on a scale of 1 to 10, where a higher score signals greater risk. Source: Control Risks and Oxford Economics Africa.
Regional Anchors And Fragile Markets
The report places Kenya among a group of countries it calls regional anchors, alongside South Africa, Egypt, Nigeria and Morocco. These markets combine diversified economic bases with established logistics networks and multiple financing sources.
“Kenya’s case is less comfortable,” the report states, describing the country as “a diversified services, transport and financial hub with strong foreign exchange earning sectors, but limited fiscal room to absorb another shock.”
Mozambique appears in a separate section the report titles “not all boats will rise,” alongside Malawi and Botswana. The authors describe apparent stability in Mozambique’s currency, the metical, as masking sizeable current account deficits, elevated external debt and dwindling foreign exchange reserves.
“Tighter controls over foreign exchange flows have intensified currency shortages rather than resolved the underlying imbalance,” the report states, adding that an eventual devaluation looks increasingly likely.
Domestic Refining And Oil Capacity On The Rise
The report also points to a planned refinery project in Kabaale, Uganda, expected to add 60,000 barrels a day of capacity, part of a wider continental push toward regional fuel production. East African governments have revived discussions about additional regional refinery projects serving Kenya, Tanzania and Uganda after the Iran conflict disrupted Gulf supply routes earlier in 2026.
That refining push runs alongside Uganda’s separate push into crude oil exports. NCBA’s 2026 macroeconomic outlook projects Uganda’s GDP could expand 7.0 to 7.5 percent in 2026, supported by the start of oil exports from the Tilenga and Kingfisher fields, which the Petroleum Authority of Uganda expects could yield 230,000 barrels a day once fully operational.
The authors argue that three developments will determine whether East Africa and the rest of the continent can sustain recent gains: the region’s ability to convert AI and data centre investment into functioning capacity, how governments navigate a more fragmented global trading system, and whether markets can withstand rising climate volatility.
Kenya features among the markets the report identifies as best placed to attract data centre investment, alongside South Africa, Egypt, Morocco and Nigeria.
East Africa 2026 Growth Outlook: Kenya, Uganda, Tanzania, Rwanda
