Ethiopia export windfall, Kenya investment surge contrast with Somalia's funding crunch

MOGADISHU, July 7 — Ethiopia has posted record export earnings while Kenya reported a sharp rise in foreign investment, underscoring diverging economic fortunes in East Africa as Somalia seeks alternative financing following U.S. cuts to security assistance.

Ethiopia said it generated a record $10.7 billion in export revenue over the past fiscal year, surpassing government targets on the back of strong overseas demand for gold, coffee, oilseeds, and cut flowers.

Officials said the performance was also supported by growing electricity exports to neighbouring countries and increased output from the country's manufacturing sector, describing the results as a major milestone for the economy.

In neighbouring Kenya, authorities announced that foreign direct investment (FDI) inflows reached $3.2 billion in 2025, a 38 percent increase from the previous year.

The government attributed the growth to continued economic reforms and an improving investment climate. At the same time, analysts said the figures reinforced Kenya's position as one of East Africa's leading destinations for international capital.

The positive economic announcements came as Somalia faces mounting financial pressure after the United States halted key funding for security operations.

The funding reductions affect support for Somali security institutions as well as the African Union stabilization mission operating in the country, raising concerns over the sustainability of ongoing counterinsurgency efforts against the Islamist militant group Al-Shabaab.

Somalia's federal government is now seeking alternative funding sources to sustain security operations and prevent disruptions to efforts to maintain stability, as officials warn that reduced external support could place additional strain on the country's already limited financial resources.

GAROWE ONLINE