While many Western countries have been suffering through a deep and ongoing recession, an untold success story has quietly been playing out elsewhere across the globe. The economies of East Africa—particularly Rwanda, Kenya, Tanzania, Uganda and Burundi—have begun to flourish. These nations are witnessing economic expansion in the neighborhood of 5 to 7 percent annually. The trend poses a stark contrast to the headlines of war, genocide, famine, economic failure and corruption that have long characterized the region—prompting major corporations to take a closer look and reconsider their investment strategies.

As this remarkable transformation takes place, it's clear that the ripples are spreading across the globe. Says Lucy Mamganga Mariam Fye, senior private sector specialist for the World Bank: "The region is undergoing a remarkable shift. It has emerged as an enormous success story and achieved a high level of macroeconomic stability." Adds Charles Wheelan, a senior lecturer for the Harris School at the University of Chicago: "The change is strikingly impressive. Government leaders have a powerful and sensible vision."

Western-style reforms

Covering about 695,000 square miles with a total population of more than 132 million people, East Africa as a whole has made enormous strides over the last decade. As political and social stability has taken root, these nations, and their economies, have undergone a remarkable transformation. Not only is there a well-developed legal framework in place, says Anton Roux, CEO, Aon South Africa and Sub-Saharan Africa, "Western-style economic and political reforms have led to an incredible amount of growth and development. There's the emergence of a real middle class. There's a growing infrastructure."

Coffee, tea, avocados, mangoes—and untapped oil reserves

The evidence of change is everywhere, says Joe Onsando, CEO, Aon Kenya. Overall, the region is rich in a number of commodities, including oil and natural gas. Uganda possesses 10 percent of world oil reserves, which have barely been tapped. U.S., Canadian, Indian and Chinese firms are all investing in the country. "It's a huge economic driver for the entire region. It is creating a supply chain and infrastructure that's boosting growth," he states. In Kenya, potentially lucrative offshore oil exploration is also taking place—led by China's state-controlled offshore oil and gas company, CNOOC.

Manufacturing and service economies are popping up across the region too. In Uganda, for instance, 52 percent of the GDP is now generated by the service sector.

Agriculture is also advancing as farmers adopt specialized methods, including organic and sustainable practices, which produce greater crop yields and export-grade products. Coffee and tea remain large export items but farmers are increasingly producing food—avocados, artichokes, mangoes, chilies, pineapples, bananas and other items—for the European Community and the Middle East. In Kenya, 25 percent of the gross domestic product derives from agriculture, and other nations in East Africa range from about 35 percent (Burundi) to 50 percent (Tanzania).

Destination: Arusha, Kampala and Kigali

Tourism is growing as well. Kenya and Tanzania continue to attract visitors from all over the world—eager to view rare wildlife and unique landscapes, such as the Serengeti. Tanzania attracts about 1 million tourists annually while Kenya hosts about 1.4 million visitors per year. Yet, Uganda and Rwanda have emerged as attractive destinations as well—particularly as visitors seek out views of rare mountain gorillas native only to this region. Adventure tourism, ecotourism and cultural tourism are flourishing.

The result? Infrastructure—including roads, plumbing, telecommunications, air transportation and electricity grids—are maturing throughout East Africa. Over the next decade, it's likely that many cities and regions will be transformed. In addition, says Maurice Amogola, CEO, Aon Uganda, business parks and commerce hubs are rapidly emerging, some with access to high-speed Internet. "There are times when you wind up having to take two or three flights to travel a relatively short distance. But the situation is improving rapidly."