UNCTAD World
Investment Report 2018: East Africa, the fastest-growing region in Africa,
received $7.6 billion in FDI in 2017, a 3 per cent decline from 2016. Ethiopia absorbed
nearly half of this amount, with $3.6 billion (down 10 per cent), and is now
the second largest recipient of FDI in Africa after Egypt, despite its smaller
economy (the eighth largest in Africa). Chinese and Turkish firms announced
investments in light manufacturing and automotive after Ethiopia lifted the
state of emergency in the second half of 2017. United States fashion supplier
PVH (Calvin Klein and Tommy Hilfiger); Dubai-based Velocity Apparelz Companies
(Levi’s, Zara and Under Armour); and China’s Jiangsu Sunshine Group (Giorgio
Armani and Hugo Boss) all set up their own factories in Ethiopia in 2017.
Several of these firms are located in Ethiopia’s flagship, Chinese-built,
Hawassa Industrial Park.
Kenya saw FDI increase to $672 million, up 71 per
cent, due to buoyant domestic demand and inflows into ICT industries. The
Kenyan Government provided additional tax incentives to foreign investors.
South African ICT investors Naspers, MTN and Intact Software continued to
expand into Kenya. United States companies were also prominent tech-oriented
investors, with Boeing, Microsoft and Oracle all investing in the country. Significant
consumer-facing investments by Diageo (United Kingdom) in beer and Johnson and
Johnson (United States) in pharmaceuticals also bolstered FDI into the country.
The strong gold price and a diversified productive
structure contributed to FDI inflows worth $1.2 billion into the United
Republic of Tanzania. Facebook and Uber (both United States) expanded into that country while India’s
Bharti Airtel continued to invest. The country’s inflows nonetheless recorded a
14 per cent decline compared with 2016. Foreign telecommunication companies now
must list at least a quarter of their equity on the local stock exchange, an
effort by the Tanzanian Government to increase domestic ownership. In addition,
a ban on exports of unprocessed minerals may adversely affect the country’s foreign mining assets. Read More
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