With the giants of Africa, Nigeria and South Africa, faced with a crisis at home, East African countries are increasingly becoming a suitable alternative for foreign investors and large consumer companies. Both of Africa’s largest economies have experienced growth at below 2%, hit hard by fall in global commodity prices in 2016. While East African countries’ led by Ethiopia, Kenya, Tanzania and Rwanda have been enjoying growth rates not less than 5% since then.
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Countries like Kenya, Ethiopia and Tanzania have also benefitted from generally low labour costs. In a recent Working Paper by The Center for Global Development (CGD), it said the “general level of prices in Ethiopia is below the level in India and comparable to that of in Bangladesh.” Kenya and Tanzania have also been identified as countries with low wages but not as low as Ethiopia. With labor costs now rising faster in places like China, large manufacturing firms are exploring opportunities for production outside Asia. These East African countries have become a sweet spot.
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