Ethiopia experiences FDI woes

Ethiopia saw a dramatic reduction in its levels of inward FDI during 2016. In figures up to October 2016 recorded by greenfield investment monitor www.fdimarkets.com, the country has received just 12 new projects, a disappointing return following several years of increasing inward investment to its shores.

During 2015, the monitor tracked a total of 30 projects into Ethiopia, while 33 projects were recorded during all of 2014, the country’s highest return since www.fdimarkets.com began tracking in 2003.

The final two months of last year provided an opportunity for Ethiopia to recover lost ground. However in 2015 only two FDI projects were announced during November and December, with the same small amount seen during the final two months of 2014. In terms of job creation, just 6565 new roles have been announced up to October 2016, compared with a total of 14,424 in 2015 and 34,922 during 2014.

Although capex for 2016 has already surpassed 2015 figures, a portion of the higher level seen in 2016 can be attributed to two major construction projects announced in the real estate sector. It remains to be seen whether Ethiopia can recover the momentum it garnered during previous years, when FDI levels echoed its impressive GDP growth.

Recent anti-government sentiment in the country and the related public protests that foreign investors experienced could see the downward trend continue.