Kenya’s foreign direct investment (FDI) assets in Ethiopia increased by 23pc to reach Ksh 74.1 billion from Ksh 60.2 billion owing to increased investments in the information and communication sector.
A report by the Kenyan National Bureau of Statistics (KNBS) indicates that the country’s assets in Ethiopia rose to account for 22.5pc of total foreign direct investment assets held abroad which increased by 22.6pc to Ksh 329.2 billion in 2022 from Ksh 268.4 billion in 2021.
“The increase in foreign assets in Ethiopia was mainly on account of equity investment in the telecommunication sector, while that of Democratic Republic of Congo was due to investments in the banking sector,” said KNBS in its 2023 Foreign Investment Report.
The investment in the telecoms sector was largely driven by the entry of Safaricom Plc into the Ethiopian mobile communication service market with the launch of Safaricom Ethiopia. The telco is owned by a consortium which includes Safaricom Plc, Vodafone Group, Vodacom Group, Sumitomo Corporation and British International Investment (BII).
Safaricom plans to spend between $1 billion and $1.2 billion within the next five years to expand its services in Ethiopia after it began commercial operations in the country in October 2022.
Tanzania held the second largest stock of Kenya’s FDI assets amounting to Ksh 53 in 2022 from Ksh 49 billion in 2021 while DRC was third with a stock of FDI assets amounting to Ksh 52.6 billion in 2022. FDIs to DRC during the period was also largely driven by investments by Kenyan banks including KCB Group and Equity Bank. Uganda followed with Ksh 49.5 billion.
“At the end of 2022, Foreign Direct Investment assets were majorly held in Ethiopia, Tanzania, the Democratic Republic of Congo and Uganda which collectively accounted for 69.7pc of total stock of FDI,” said KNBS.
