Kenya, Ethiopia push for deeper trade, tourism and investment links

Kenya and Ethiopia are seeking to strengthen economic ties, with tourism, trade, energy, manufacturing and cross-border infrastructure emerging as key pillars of a growing partnership.

This, as they push to unlock more trade and investment opportunities for economic prosperity, including tapping into the wider African Continental Free Trade Area (AfCFTA).

The renewed push comes as the Ethiopian Embassy in Nairobi launched a campaign to market Ethiopia as both a tourism destination and an investment hub, inviting Kenyan businesses to take advantage of reforms that have opened new sectors of the economy to foreign investors.

Speaking during the "Promote Ethiopia" event in Nairobi, Ethiopia's Ambassador to Kenya, General Bacha Debele, said the country is repositioning itself as a modern investment destination while leveraging its rich cultural heritage and strategic location in the Horn of Africa.

"We are here to showcase the New Ethiopia, a country that is boldly redefining its tourism landscape," Debele said, describing tourism as one of the five pillars of Ethiopia's Homegrown Economic Reform programme.

The ambassador said Ethiopia offers investors opportunities in tourism, transport, energy, agriculture and manufacturing, while encouraging Kenyan businesses to tap into the country's expanding economy.

He noted that Ethiopia's transformation is being driven by flagship tourism projects under Prime Minister Abiy Ahmed's "Dine for the Nation" and "Dine for Generation" initiatives, which have seen the development of world-class destinations including Gorgora Eco Resort, Wenchi-Dendi, Shabeely Resort, Arbaminch Conference Resort and Hallala Kella.

The projects are intended to increase visitor numbers, extend tourist stays and position Ethiopia as a competitive African tourism destination.

"We invite the Kenyan business community, tour operators and investors to seize this moment and explore the vast investment potential within our thriving tourism sector," Debele said.

Beyond tourism, economic relations between the two neighbouring countries continue to strengthen through expanding trade and infrastructure links.

Bilateral trade between Kenya and Ethiopia is estimated at approximately $200 million (Sh25.9 billion), supported by improved regional integration and investments in cross-border infrastructure.

Kenya exports manufactured goods, chemicals and value-added products to Ethiopia, including pesticides, pharmaceutical products, fertilizers and packaging materials.

Ethiopia, on the other hand, exports electricity, soybeans, dried legumes and glass bottles to Kenya, with electricity accounting for the largest share of its exports as regional power trade expands.

The operationalisation of the Moyale One-Stop Border Post has significantly reduced customs clearance times and eased the movement of goods along the Nairobi-Addis Ababa highway, while the Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) Corridor is expected to further boost regional trade and logistics.

Energy cooperation is also emerging as a major area of collaboration, with Ethiopia's surplus renewable hydroelectric power presenting opportunities for expanded cross-border electricity trade to support Kenya's growing energy demand.

Kenyan businesses are already making inroads into Ethiopia following recent economic reforms.

Safaricom's entry into Ethiopia's telecommunications sector is widely viewed as one of the biggest investments by a Kenyan company in the neighbouring country and is expected to pave the way for more private sector participation.

GulfCap Group chairman Suleiman Shahbal said the company is exploring opportunities in Ethiopia's banking sector as the country gradually liberalises its financial services industry.

"Ethiopia is opening up. We have seen Kenyan businesses make entry into the country and also Ethiopians inquiring about the Kenyan market. We are exploring going into the banking industry," Shahbal said.

Shahbal, who founded Gulf African Bank and chairs the East African Legislative Assembly's Committee on Communication, Trade and Investment, said stronger regional integration is creating new opportunities for investors on both sides of the border.

The growing partnership is also attracting Ethiopian investors into Kenya.

Hospitality entrepreneur Tadiwos Belete, founder and chief executive of Boston Partners PLC and Kuriftu Resorts & Spa, said he plans to develop a major water park in Mombasa in partnership with Kenyan investors.

The project, targeted for completion in 2027, is expected to become one of the largest water parks in Eastern Africa and further strengthen tourism investment between the two countries.

Belete said tourism should become the foundation for deeper African economic integration, arguing that increased travel across the continent would naturally stimulate trade and investment.

"We are doing a roadshow across Africa because tourism money should stay within the continent. Africa has some of the world's best beaches, mountains, lakes and hospitality facilities, yet many Africans still choose to holiday outside the continent," he said.

He added that Ethiopia remains open to Kenyan investors seeking opportunities in tourism and hospitality, describing the sector as a "green field" with significant untapped potential.

With direct flights between Nairobi and Addis Ababa operated daily by Ethiopian Airlines, improved transport infrastructure and expanding investment opportunities, Kenya and Ethiopia are positioning themselves as strategic partners in advancing regional trade, tourism and economic integration across Eastern Africa.