Ethiopia Top Recipient of Foreign Direct Investment in East Africa

June 12/2019 Ethiopia was the biggest Foreign Direct Investment (FDI) recipient in the Eastern Africa region and the Fifth largest FDI destination in Africa in 2018, World Investment Report 2019 revealed. 

The foreign direct investment (FDI) inflow into Ethiopia was 3.3 billion USD.

When compared with the FDI received in 2017, which was a peak year at 4.1 billion USD, the amount declined by 17 percent due to instabilities in some parts of the country, among others, the report noted.

However, Ethiopia is still the biggest FDI recipient in the Eastern Africa region and the fifth largest FDI destination in Africa as a whole, it added.

Given the number of industrial parks established and assuming recovery in global FDI flows, it is expected that Ethiopia will attract about 5 billion USD in 2019, it was indicated.

In Africa, Ethiopia is one of the few countries where the bulk of FDI inflow went into the manufacturing sector largely due to investment in industrial parks.

According to the report, the current status clearly shows that the policy of the government is encouraging FDI flows into productive sectors is working.

In recent years, international cooperation on the development of Special Economic Zones (SEZs) or industrial parks has increased.

SEZs can make important contributions to growth and development. The short-term benefits of SEZ include attracting investment, creating jobs and enabling countries to boost their manufactured exports, the report pointed out.

The report expects global FDI flows in general to see a rebound in developed economies as the effect of the tax reforms in the US winds down.