Saturday June 01 2024
A report published by AfDB shows that East Africa is on course to topple West Africa as the fastest growing region on the continent, despite multiple headwinds.
East Africa’s economy is projected to grow at 4.9 percent, more than triple the 1.5 percent growth rate recorded last year, defying the impact of the recently experienced floods and war in Sudan.
The African Economic Outlook report published by the African Development Bank (AfDB) this week shows that East Africa is on course to topple West Africa as the fastest growing region on the continent, despite multiple headwinds.
Notably, the war in Sudan has significantly impacted the region’s growth, with the resulting slowdown spilling over to South Sudan, causing a revision by 0.2 percent from the 5.1 percent earlier predicted by the bank in January.
“The downward revision of 0.2 percentage points for 2024, compared with the forecast in the January 2024 MEO (macroeconomic outlook) is due to larger-than-expected contractions in Sudan and South Sudan due to the ongoing conflict in the former,” the report said.
Read: EA braces for hunger as floods destroy farms
Besides the war, East Africa’s economy is also projected to defy the recently experienced above normal rainfalls in Kenya and Tanzania, as well as the drought in Somalia, Ethiopia and South Sudan.
The AfDB says these climate-change related calamities remain among the top risks to the continent’s economies, and could exacerbate fragilities, slowing growth and inflating their debts.
The region’s economy is projected to grow even faster next year, at a rate of 5.7 percent, one percentage point higher than the next closest region, Central Africa, whose growth rate will decelerate to 4.1 percent this year, before jumping to 4.7 percent in 2025, based on the projections.
Continentally, real GDP growth rate is expected to jump by 0.6 percentage points to 3.7 percent, as most of the issues that weighed down growth last year wane.
Last year, Africa’s economic growth had decelerated to 3.1 percent, thanks to the “persistently high food and energy prices on the back of sustained impacts of Russia’s invasion of Ukraine, weak global demand weighing down export performance, climate change and extreme weather events on agricultural productivity and power generation, and pockets of political instability and conflict in some African countries,” the lender said.
The impact of these factors is now fading. Despite the optimistic outlook in the medium term, the AfDB says the continent’s economic growth rate is still too slow to effect the transformation needed to improve lives on the continent.
“For us to transform, we need much higher growth,” said AfDB’s chief economist Prof Kevin Urama during the launch of the report at the lender’s annual meetings held in Nairobi this week.
Read: East Africa is set for higher growth rate due to its diversified economies
“The continent has trailed other regions consistently for decades in terms of GDP per capita, we have not created enough jobs for youth, there’s persistent poverty, there’s debt vulnerability and recurrent debt distress, but also several other fragilities across the continent.”
Dr Akinwumi Adesina, AfDB president, said the extra growth can be achieved by adopting principles of transparency and accountability in the management of public resources and natural capital.
“Africa’s future is bright, but we need to make sure we also tackle governance, transparency, accountability, management of our natural capital; make sure that whatever resource we have is used to the fullest for the benefit of the people of this continent,” he said.
Source link : https://www.theeastafrican.co.ke/tea/business/east-africa-economy-defies-climate-shocks-conflict-to-triple-growth-4642962?view=htmlamp
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Publish date : 2024-06-01 06:21:16
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