East Africa experienced the highest growth in Africa in 2018 at a time when the continent recorded uneven growth of 3.8 per cent, EY Africa attractiveness report 2019 has revealed.
The region had an average growth of 7.0 percent whereas its peers; West Africa, North Africa, South Africa struggled with 3.2 percent, 4.1 percent, and 2.6 percent respectively.
Rwanda, Ethiopia, and Uganda were ranked amongst the top 10 fastest growing economies globally while the majority of the East African countries’ growth stood at 5 percent per annum.
“East Africa’s growth remains world-leading. Kenya, along with neighboring Tanzania, Uganda, Rwanda, and Ethiopia are all growing well above 5% per annum,” the report noted.
Specifically, the report highlighted that “Kenya is forecast to continue growing at these rates over the next five years, supported by a more stable political climate, and a focused approach on agriculture and horticulture exports. Simultaneously, it continues its focus on raising attractiveness in the innovation and technology space, vying to become one of Africa’s major tech-hubs.”
The East African region has already established itself as a hub with a diverse economy and investment-driven growth, the ease of doing business in the region has triggered many investors to establish their businesses in the area.
In 2018, East Africa attracted inflows of USD 4 billion, investment was channeled to diverse industries with the manufacturing, chemicals, hospitality and oil and gas being the main attraction for foreign investors.
The EY report mirrors a previous one by the African Development Bank (AfDB) that predicted that economic growth across Eastern Africa will remain at a robust 5.9 percent in 2019, making it a promising investment and manufacturing destination.
However, Sub Saharan growth remained slower at 2.6 and this was attributed to the many challenges faced by three of its largest economies, Angola, South Africa, and Nigeria.
“The three collectively account for over half of the region’s total GDP (USD 800bn). Angola remained in recession, contracting another 1.7 percent during the year; South Africa’ growth was barely positive (+0.8 percent); while Nigeria’s growth was moderately stronger, at 1.8 percent,” additional sources by Oxford Economics stated.
The report further highlighted that in 2018, major economies, Nigeria and South Africa struggled to return to pre-recession growth levels, as they both grappled with implementing policy reforms.
“As a result, 2018 was another low-growth year for both markets, with the expectation that unless the resolve is found to address reforms, 2019 may also prove to be another year of sub-par growth for both of them,” it said in part.
Featured Image Courtesy: Nairobi Business Monthly