ADDIS ABABA — Ethiopia has eclipsed Tanzania and Uganda as Kenya’s top foreign investment destination.
Kenya’s direct investment in Ethiopia reached Ksh60.2 billion ($440.7 million) in 2021, surpassing Tanzania’s and Uganda’s respective Ksh51.5 billion ($377 million) and Ksh56.3 billion ($412 million).
Although Tanzania was Kenya’s top foreign investment destination in early 2015, the newly released Economic Survey 2023 shows that the balance has now moved in favour of Addis Ababa.
“Tanzania was the leading destination for the country’s investment abroad at the start of 2015 the review period, with investments declining in 2018, but later recovering to reach Ksh51.5 billion in 2021” an extract from the survey reads.
“Kenya’s direct investment in Uganda reached its peak at Ksh56.3 billion in 2019, while investments in Ethiopia reached Ksh60.2 billion in 2021” it added.
A number of Kenyan companies have joined the Ethiopian market, including Safaricom, the largest telecommunications company in the world, which operates as Safaricom Telecommunications Ethiopia Private Limited (STE).
In August 2022, Safaricom Ethiopia began operations in the city of Dire Dawa and will gradually expand to 24 other cities, including Addis Abeba.
Lenders from Kenya, including KCB Bank, have also expressed interest in entering the Ethiopian market. A delegation of KCB Bank top executives visited Addis Abeba in October of last year to meet with the Ethiopian Investment Commission (EIC) officials.
The KCB team visited Ethiopia a month after the country’s Council of Ministers made history by sanctioning the opening of its banking system to foreign investment.
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