Ethiopia Overtakes Kenya in New Foreign Investors

Addis Ababa October 30/2018 Ethiopia has overtaken leading position in foreign direct investment (FDI) from Kenya. Kenya lost its position after new investors turn their focus on Ethiopia subsequent to wide-ranging socio-economic reforms, according to Kenyan the Standard newspaper. Recent research into foreign direct investment flowing to Eastern Africa indicates that Ethiopia is narrowing the gap in attracting new investment. It could surpass Kenya in the value and number of capital projects in less than two years. A report by consulting firm Ernst & Young (EY) on FDI readiness ranks Kenya third on the continent after South Africa and Morocco in attracting investors with 67 FDI projects. According to EY, Kenya marked a 68 per cent increase in the number of investment projects last year, compared with the previous year. In contrast, Ethiopia was ranked fifth with 62 projects, marking a 288 per cent increase in the number of projects funded last year compared to a similar period in 2016. This has seen Ethiopia rise seven spots in the index. It ties with Kenya and Nigeria at nine per cent in terms of the share of FDI to sub-Saharan Africa. Consumer products and retail (textiles) and real estate, hospitality and construction were responsible for three-quarters of this surge,” explained the report in part - crediting the Government’s ambitions to turn Ethiopia into a manufacturing hub. “Looking ahead, the recent opening up of the telecoms, shipping, power generation and aviation sectors to foreign investment will prove to be a boost to investor interest.” Political reforms that saw the election Prime Minister Abiy Ahmed and the first female president Sahle-Work Zewde will further boost Ethiopia's standing among foreign investors. Kenya is, however, grappling with huge public debt.