Rédaction Africa Links 24 with Uganda Monitor
Published on 2024-03-10 18:12:59
The East African economies are predicted to experience growth in the upcoming years, with a projected 5.1 percent growth in 2024 and 5.7 percent in 2025. This growth is expected to be driven by the service, tourism, and transport sectors, according to the East African Economic Outlook 2024 report released by RSM Eastern Africa Consulting Ltd, an audit, tax, and consulting firm. The report highlights growth in various sectors such as agriculture, manufacturing, financial, and infrastructure in countries like Kenya, Tanzania, Rwanda, and Uganda.
In Kenya, the economy saw a 5.9 percent growth in the third quarter of 2023, with the agricultural sector showing a significant improvement with a 6.7 percent growth. The financial and insurance sector in Kenya grew by 14.7 percent, while construction and cement consumption also saw positive growth.
Kenya recorded a positive trade balance with East African Community (EAC) Partner States, showcasing economic strength in the region. The service sector has been a driving force of economic growth in both Kenya and Tanzania, with services exports seeing a significant increase.
Tanzania’s real GDP growth is projected to reach 6.3 percent in 2024, supported by a rebound in tourism and continued investment in public infrastructure. The agricultural sector in Tanzania played a significant role in boosting the country’s GDP growth, with key sectors like agriculture, transportation, storage, and financial and insurance services driving growth.
While the report paints a positive economic outlook for the EAC region, challenges such as illicit trade, counterfeits, sub-standard goods, high cost of electricity, transport, and currency depreciation continue to impact the cost of doing business in the region. Inflation is expected to remain high in the first half of the year but is projected to moderate by the last quarter.
The Kenyan government has implemented various fiscal policies, including new tax rates and levies introduced through the Finance Act 2023. The Central Bank of Kenya has maintained a high-interest rate of 10.5 percent, which can influence borrowing and investment decisions. The depreciation of the Kenyan shilling against major currencies further complicates the economic landscape.
Despite these challenges, the EAC region is positioned for a strong economic rebound, with the expectation of achieving a GDP growth rate between 4.1 percent to 7.2 percent. As the region continues to navigate global challenges, collaboration and strategic initiatives will be key to sustaining economic growth and development in East Africa.
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