Analyses & Studies
Article | Economic Letter: East Africa and the Indian Ocean - May 2026
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Economic Relations with France: a deepening, structural partnership
The French Treasury (Direction générale du Trésor), under the French Ministry of Economy and Finance, publishes Economic Letters through its regional services to provide in-depth analysis of key economic sectors and trade dynamics in partner countries.
This edition reviews France's economic relations with East Africa and the Indian Ocean (IOEA), which have strengthened markedly in recent years across three complementary levers: growing development finance, an expanding business presence in strategic sectors, and intensifying trade.
France is now a leading bilateral donor in the region via the AFD group, ranking 1st bilateral donor in the Comoros, 2nd in Kenya, Uganda and Tanzania, and 3rd in Madagascar, with cumulative commitments exceeding EUR 1.8bn in Kenya, EUR 1.5bn in Tanzania and EUR 1.4bn in Uganda over fifteen years. Energy is the top sector of engagement, alongside water and sanitation (notably Djibouti, the Comoros, Tanzania and Kenya), transport and urban development, sustainable agriculture and biodiversity, and human capital support (particularly in Rwanda). France's approach is closely coordinated with the EU, the World Bank, the AfDB and the EIB, including through Team Europe co-financing mechanisms and complementary instruments (Treasury loans, FASEP, FEXTE, Expertise France, Proparco).
On foreign direct investment, France ranks as the top foreign investor in Mauritius (over 40% of FDI stock, excluding Global Business), the 4th in Madagascar and 5th in Kenya, with more modest but growing positions in Tanzania and Ethiopia (3rd-largest European investor). The French business footprint is expanding across the region — around 140 companies in Kenya, 40–50 each in Rwanda, Tanzania and Ethiopia, and a near-quadrupling in Uganda over 15 years to about 35 — supported by bilateral chambers of commerce, French Tech communities, Business France and Bpifrance, and playing a structuring role in major energy, infrastructure and logistics projects such as the EACOP pipeline in Uganda and Tanzania. Remittance and tourism flows further reinforce these ties, with France accounting for around 85% of remittances to Madagascar and 92% of remittances to the Comoros, and remaining the top tourism market for both Madagascar (nearly one visitor in two) and Mauritius (over a third of arrivals).
Bilateral trade reached EUR 3.4bn in 2025, with Madagascar, Ethiopia and Mauritius as France's leading regional trade partners and relatively balanced overall flows, though patterns vary by country (French surpluses in Djibouti, Mauritius and Rwanda; deficits vis-à-vis Madagascar and the Seychelles). French exports are led by transport equipment (30.9%), agri-food products (13.4%) and chemicals/pharmaceuticals (8.6%), while imports are dominated by agricultural and agri-food products (64.4%) and textiles (20.4%), with Madagascar, Mauritius and Kenya as France's main regional suppliers.
Overall, the Letter highlights that EU Economic Partnership Agreements with Kenya, Madagascar, Mauritius and the Seychelles provide a structuring framework for the progressive liberalisation of trade, positioning it as a further lever for medium- and long-term development in the France-IOEA economic relationship.
