This archive report was first published on 17 September 2019.
Published on September 17, 2019, a report by Ernst & Young highlighted the growing trend of foreign direct investments in Africa, with Ethiopia and Kenya emerging as the top destinations in the East African region.
According to the report, Ethiopia attracted foreign investments amounting to Sh726.6 billion ($7 billion) in 2018, surpassing Kenya's Sh207.6 billion ($2 billion) and Tanzania's Sh103.8 billion ($1 billion). The report noted that FDI in Africa remains stable, with 710 projects creating 117,000 jobs and attracting $75.5 billion in capital during the period.
Kenya, on the other hand, created about 6,000 jobs from 64 projects, while Ethiopia created 16,000 jobs from 29 projects, and Tanzania created 3,000 jobs from 19 projects.
Ethiopia's business-friendly environment, affordable electricity supply, and efficient airline have made it an attractive destination for foreign investors. The country's commitment to liberalizing foreign entrants into key sectors, including financial services and telecoms, has also contributed to its appeal.
Kenya, on the other hand, prides itself as a regional financial centre and a hub for many multinationals doing business in the region. Its innovation and technology space has also raised its attractiveness, with the nation benefiting from consistently strong growth rates.
As a collective hub, the East African region's economy is worth $265 billion, led by Kenya ($88 billion), Ethiopia ($79 billion), Tanzania ($58 billion), Uganda ($29 billion), and Rwanda ($10 billion). The region's growth averages 7.0%, with most countries growing above 5% per annum.
