ETHIOPIA – Kenyan ride-hailing firm Little is expanding to Addis Ababa, Ethiopia joining Safaricom and several other Kenyan firms in the race to crack the Ethiopian market that has so far remained closed to foreign companies.
The firm’s Chief Executive Officer Kamal Budhabhatti told Business Daily that the company will invest US$5 million in the next five years, with plans to inject an additional US$5 million based on its growth projections.
It said it plans to 2,000 drivers targeting corporates and individual customers with plans to later launch food delivery, and outside Addis Ababa in the country of over 100 million people.
The digital taxi firm becomes the latest Kenyan company to enter Ethiopia days after a Safaricom-led consortium received a telecommunication operator licence in Ethiopia, setting the stage for Kenya’s largest telco to start operations in the market of over 100 million people.
Ethiopia’s award of a new telecoms licence paves the way to open the market to international investors for the first time, a key part of Prime Minister Ahmed’s economic strategy.
“We have some great Ethiopian partners. We felt that it is a very large market, and for us to succeed there, we need to work closely with Ethiopian companies who would bring a wealth of local and cultural knowledge,” said Mr Budhabatti.
Several Kenyan firms have been eyeing the Ethiopian market for years due to the country’s huge population.
Kamal Budhabhatti – Chief Executive Officer, Little
The Kenyan firms are attracted by the growth potential in that market, whose 100 million population means a huge untapped business opportunity. Its population, which is the second-largest in Africa after Nigeria, offers immense opportunities for business.
The horn of Africa nation has also consistently registered robust economic growth, averaging 10 percent in the past five years.
Shares in sugar factories are also being sold and tentative steps towards opening up the financial sector have been taken.
The Kenyan firms eyeing to crack the Ethiopian market include insurer Jubilee as well as lenders, KCB, Equity, Cooperative Bank and Stanbic.
Little says through its application one can access the delivery services, transport, doctor services, corporate services, and the wallet which enables one to send money, buy airtime, pay bills among other functions.
Escalating armed conflict in Ethiopia’s Tigray region pitting Tigrayan forces against the Ethiopian military and its allies from Amhara and the neighbouring nation of Eritrea has raised concerns over the investment climate in the country.