SINGAPORE firms are showing greater interest in the fast-growing East African economy, as two new trade and investment agreements show.

The Singapore Business Federation (SBF) last week led a trade mission of 18 companies and organisations from various industries to Kenya and Tanzania. The trip was assisted by trade agency International Enterprise (IE) Singapore.

During the June 2-6 mission, SBF signed a memorandum of understanding with the Kenyan Private Sector Alliance (Kepsa), an apex body representing the country's businesses.

And Kepsa signed an MOU with Singapore scorecard developer Vector Scorecard Asia-Pacific to establish a financial bureau in Kenya.

Doing business in Africa can be challenging. For instance, an Australian technology entrepreneur died last week from a shot in the head during a home invasion in Kenya's capital Nairobi.

But despite the hurdles, Africa in general - and East Africa in particular - offers major investment attractions to intrepid local firms.

The interest in Africa among Singapore firms is being fuelled by strong growth. Africa's economy as a whole is expected to grow by 4.7 per cent this year and 5 per cent next year.

Driving this growth is East Africa, with expected 6.4 per cent growth this year, buoyed by a growing middle class, increased consumer spending, improved infrastructure investment as well as discoveries of oil and gas mineral resources.

Leading the Singapore charge is Pavilion Energy, a subsidiary of Temasek Holdings, which made its first acquisition in Africa with a US$1.3 billion (S$1.6 billion) stake in three gas blocks off the coast of Tanzania last November.

Last week's mission is the third time that SBF has taken a business delegation to Kenya and Tanzania in the last five years, and the second business mission to East Africa this year.

SBF vice-chairman Teo Siong Seng, who is also managing director of Pacific International Lines, said: "East Africa has built up a tremendous appetite for infrastructure development to support its economic growth."

He added: "Our business delegation is offering Singapore companies' expertise and technology to build up areas such as urban planning, port management, oil and gas, transport and logistics, water solutions and e-government."

Mr G. Jayakrishnan, group director for Middle East and Africa at IE Singapore, said: "Singapore companies looking for growth options will find a viable market in East Africa, which remains relatively untapped.

"Opportunities include the oil & gas sector in Tanzania, consumerism fuelled by a rising middle class in Kenya and Uganda, and a proactive drive into manufacturing by Ethiopia."