By Mark Kawalya
Little is expanding its operations to Addis Ababa joining the fray of other Kenyan companies that are racing to crack open the Ethiopian market that has largely remained unpenetrated by foreign firms.
The country will be the fifth that Little holds a market share in after Tanzania, Uganda, Zambia, and Kenya, where the rapidly growing pan-African firm operates.
The company’s CEO Kamal Budhabhatti said the firm will inject $5million in the next five years and will invest an additional $5million that will be based on growth projections.
The firm will hire 2,000 drivers and will offer its services to corporate and individual customers, with plans to start a food delivery service using its network of operators.
“Ethiopia has always been on our sight,” Mr. Budhabhatti said in an interview.
The digital ride-hailing firm is one of the latest Kenyan companies to set up shop in Ethiopia after Safaricom received a telecommunication operator license to start operations in the country, which has a bountiful market of more than 100 million people.
The award of the telecoms license is a new dawn for Ethiopia as the country seeks to open the market to foreign players for the first time.
Ethiopia’s award of a new telecoms license paves the way for opening the market to international investors for the first time, a key part of Prime Minister Ahmed’s economic strategy.
“When we saw Safaricom heading to Ethiopia, we got the courage to get there. It is a large market, and we see an opportunity to extend our services there, “said Mr. Budhabatti.
Little is set to partner with state-run Ethio Telecom, which launched a mobile money service called telebirr.
“We have some great Ethiopian partners,” said Mr. Budhabatti. “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.”
Several Kenyan companies have had their eyes on the Ethiopian market for years due to the potential posed by the country’s large population. Ethiopia is the second most populous nation in Africa after Nigeria and offers great growth potential for many untapped business opportunities.
Although Ethiopia had restricted foreign involvement in the economy, keeping it at a minimum, the ongoing economic reforms are encouraging foreign investor activities. Furthermore, the country has experienced 10-percentage-point economic growth over the last five years.