Kenya, Tanzania & Uganda experiencing significant Economic Growth
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Kenya, Tanzania, Ethiopia and Uganda are experiencing a period of significant economic growth – their Gross Domestic Products (GDP) are forecasted to grow by between 5.2% and 8.5% in 2018, a research output has shown.
According to East Africa’s economic prospects – as forecasted by Ecobank’s research team in the newly published East Africa section of its flagship financial website, AfricaFICC, much of the region is reliant on – agricultural crops and commodities for export earnings, but continued economic optimism looks assured.
According to the report, the combined effects of further export diversification, improvements in infrastructure, industrialisation, major oil discoveries, and the potential for significant growth in commercial services – look set to turbocharge these economies.
Ecobank Kenya Managing Director and Regional Executive of Central, Eastern and Southern Africa (CESA) Samuel Adjei, said that the East African nations look set for continued and sustained economic growth, assisted by commodity prices and the prospect of significant oil production.
“The region is a world leader in disruptive FinTech, illustrated by the resounding success of mobile money and Kenya, together with Rwanda, Tanzania and Uganda, represent a regional powerhouse for global commercial services.” He said.
Similar sentiments were echoed by Dr. Edward George, Ecobank’s Head of Group Research. Mr George noted that the countries in East Africa, most of them members of the East African Community (EAC), make up one of the most dynamic commercial and economic regions in Africa.
“East Africa is a leading exporter of tea, coffee, cut flowers and minerals to world markets, is a financial, logistics and services hub, and has some of the most diverse intra-regional trade flows in Africa. Consumers in countries like Kenya have been transacting by mobile for more than a decade and we are now seeing East African tech hubs in Nairobi, Kigali and Kampala take a leadership role in developing innovations to address long-standing African challenges. It’s an exciting time for East Africa.” He added.
Other findings from the report:
Kenya: With its diversified commodity exports, which include tea, horticultural goods and coffee, has started producing crude oil. But in the absence of a pipeline, it must all be transported to the coast by truck.
Ethiopia: Ethiopia is benefitting from strong foreign direct investment (FDI) in infrastructure and industrial projects. Its coffee and gold exports have been aided by higher commodity prices, although higher oil prices could constrain its economy which is dependent on imports of petroleum products.
Uganda: The country has diversified agricultural exports, led by coffee (it is Africa’s largest exporter of Robusta). The country plans to start exporting crude oil in 2019 and its service sector, which accounts for 52% of GDP, continues to expand strongly, supported by an emerging tech innovation sector.
Rwanda: The agricultural sector is benefiting from improved weather conditions and strengthening commodity prices are bolstering its mining exports. The government’s strong support for innovation is aimed at turning Rwanda into innovators’ preferred ‘Proof of Concept’ country in Africa.
Burundi: The fragile political situation in Burundi has led to the suspension of donor aid – that has in turn weakened its economy, which is heavily dependent upon agriculture and minerals.
South Sudan: The country has severely constrained economic growth, and notable impediments in the development of the its transport and social infrastructure. The country’s significant oil reserves, fertile soil with abundant water supplies and growing population could lay the foundations for strong growth in the future.
-Source: African Strategic-Ventures (ASV) & The Exchange.