It’s kind of a given for countries like Kenya and Tanzania to take the biggest slice of cake whenever there’s any mention of the economic powerhouses of East Africa. And of course, those countries probably deserve the acclaim.
But these days, it’s another East African country that is doing the most and threatening to topple the usual suspects. And that country is the most populous country in the region – Ethiopia, which is also one of two African countries to have never been colonized. (Liberia, being the other.)
Since Ethiopian Prime Minister, Abiy Ahmed, took office in 2018, the country has been going through a lot of reforms. And it appears the reforms are starting to yield fruit as a new study has just named Ethiopia East Africa’s prime destination for foreign investment.
A new report released by financial consulting firm, EY, which studies foreign investments inflows has found that Ethiopia is more attractive to foreign investors compared to Kenya and Tanzania combined.
The just-released EY Attractiveness Survey 2019 shows Ethiopia attracted foreign investments worth KES 726.6 Bn (USD 7.266 Bn) last year compared to Kenya’s inflows which stood at KES 207.6 Bn (USD 2.076 Bn) during the same period.
On its part, Tanzania did attract foreign investments to the tune of KES 103.8 Bn (USD 1.038 Bn) over the course of the previous year. This means that Ethiopia, on its own, posted better numbers than its east African neighbours combined.
Why Is Ethiopia Seeing So Much Action?
Prime Minister Abiy Ahmed has been pretty bold about his intention of transforming Ethiopia into East Africa’s biggest hub for business and since he took office sometime in April last year, he’s gone about it in an unrelenting manner.
The Ethiopian Prime Minister has since implemented several reforms, cutting across the political, economic, social, and diplomatic landscape.
And he does know how to cause a big splash too. In July this year, his campaign on rescuing the environment saw Ethiopia rip the record books by planting over 350 million trees in a single day. This caused ripples throughout the globe.
For his efforts, the reformist Prime Minister was recognized by the renowned Foreign Policy magazine as one of the Global Thinkers that emerged over the past 12 months.
Compared to its regional rivals, Ethiopia appears to be attracting the best part of foreign inflows due to its dynamic business environment and the lure of a huge untapped domestic market. And the view from experts is in agreement with this.
“Ethiopia has affordable electricity supply and is served by an efficient airline,” said Mr Francis Kamau, a tax partner at audit and consultancy EY East Africa. “It also has a huge domestic market with guaranteed access to external markets through its well served Special Economic Zones.”
And Foreign Investments Continue To Trickle In
The multinational beverage corporation, Coca Cola, and South Korean motor company, Hyundai Motor Co, are among the international investors who are jostling for places to pitch their tent in Ethiopia.
The beverage giant is currently in the middle of setting up what will become the largest plant for Coca-Cola beverages in Ethiopia. The entire project has been projected to cost as much as USD. Just a couple of months ago, work began in earnest on the new plant and the targeted time of completion of the project is early 2020.
In a similar development, automobile giant, Hyundai, officially opened its first African car assembly plant in Ethiopia. The facility will produce 10,000 vehicles in eight different models per year at the Ethiopian capital, Addis Ababa.
Here’s How Ethiopia Has Benefitted
The benefits of Ethiopia’s foreign capital inflows have been tremendous. The EY report says 16,000 new jobs have been created from 29 such projects, and this augurs well for the Ethiopian economy.
On the other hand, the report mentions Kenya as having managed to create 6,000 jobs from 64 unnamed projects last year, with the bulk of the investments coming in on the backs of Kenya’s long-standing reputation as the region’s financial centre, and a hub for many multinationals doing business in the region — a title Ethiopia now appears to be gunning for.
Featured Image Courtesy: fanabc.com