Direct investment overseas, also known as outward direct investment, is when a resident of one economy has substantial control or influence over the management of a company that is based in another economy.

Tanzania was Kenya’s top foreign investment destination at the start of 2015, but the recently released Economic Survey 2023 shows that Addis Abeba has since swung the balance in its favor.

An excerpt from the study states that at the beginning of the 2015 review period, “Tanzania was the leading destination for the country’s investment abroad, with investments declining in 2018 but later recovering to reach Ksh51.5 billion in 2021.”

Kenya’s direct investments peaked at Ksh56.3 billion in Uganda in 2019 and Ksh60.2 billion in Ethiopia in 2021, according to the statement.

A number of Kenyan companies have entered the Ethiopian market, including Safaricom, the largest telecommunications company in the world, which operates as Safaricom Telecommunications Ethiopia Private Limited (STE). Beginning in Dire Dawa in August 2022, Safaricom Ethiopia will gradually expand to 24 additional cities, including Addis Abeba.

Lenders from Kenya, like KCB Bank, have also expressed interest in entering the Ethiopian market. A delegation of KCB Bank top executives visited Addis Abeba in October of last year to meet with the Ethiopian Investment Commission (EIC) officials.