East Africa’s economic growth is projected to return to a pre-pandemic level with a gross domestic product (GDP) averaging above 5 percent in 2023 and 2024, according to an African Development Bank (AfDB) report.The growth in the region is estimated to moderate to 4.2 percent in 2022 from 5.1 percent in 2021, notes AfDB’s Africa Macroeconomic Performance and Outlook report.
Countries in the region are largely net importers of commodities, often bearing the brunt of high global prices and recurrent climate shocks.
“The slowdown in 2022 was therefore mainly attributed to effects of these shocks, exacerbated by disruptions to global supply chains,” says the latest report released on Friday.
Tight monetary and fiscal policies to rein in inflation have also constrained domestic household consumer demand, amplifying the effects of exogenous shocks on the economic activity of the region, home to some of the most fragile economies due to internal conflicts.
However, AfDB’s report forecasts the region’s economic growth to increase at a pre-pandemic rate, projecting the rate to rise to 5.0 percent in 2024 and 5.4 percent in 2024.
Rwanda is projected to lead growth in this region in 2023 and 2024, at rates above 7 percent, benefiting from rising infrastructure spending.
Uganda and Ethiopia are also projected to grow strongly in 2023 and 2024, exceeding the 5 percent mark on account of developments in the oil sector for Uganda and continued infrastructure spending for Ethiopia.
All the continent’s five regions remain resilient with a steady outlook for the medium-term, despite facing significant headwinds due to global socio-economic shocks.
The estimated average growth of real GDP in Africa slowed to 3.8 percent in 2022, from 4.8 percent.
However, the report says 53 of Africa’s 54 countries posted positive growth.
Over the next two years, the continent is also expected to outperform the rest of the world in economic growth, with GDP averaging around 4 percent in 2023 and 2024.
The growth rate is higher than the projected global averages of 2.7 percent and 3.2 percent as per the AfDB.