East Africa will record the fastest growth on the continent in 2015 and 2016, the African Economic Outlook (AEO) shows.
The outlook classified the continent into five regions; Central, North, South and West Africa.
Thirteen countries were placed in East Africa, including the five that make up the East Africa Community bloc.
According to the report, launched by Ivorian Prime Minister Daniel Kablam Duncan, Africa’s average Gross Domestic Product (GDP) will strengthen this year, to 4.5 per cent and 5 per cent in 2016, a rebirth from 2013’s subdued growth of 3.5 per cent and 3.9 per cent in 2014.
East Africa’s growth in 2015 will be 5.6 per cent, according to the outlook, and increase to 6.7 per cent in 2016. The prospect make the region the most attractive on the continent when compared to others.
The average 2015 growth for Central Africa will be 5.5 per cent, 5.0 per cent for West Africa, 4.5 per cent for North Africa and 3.1 per cent for Southern African.
Speaking at the report’s unveiling, Steve Kayizzi Mugerwa, the AfDB acting Chief Economist and Vice President, said African countries have continued to show considerable resilience in the face of global economic adversity.
“For future growth to be sustainable and transformative, it will require that the benefits are shared more equitably among the population and that governments continue to pursue policies that promote economic stability,” Mugerwa said.
Threats to EAC growth
Generally, although Africa’s forecast looks promising, the report shows that there are threats to keep an eye on such as lower oil and commodity prices, uncertain global conditions, the consequences of the Ebola outbreak and political uncertainties that could thwart growth.
As a result of these threats, Mario Pezzini, director of the Organisation of the Economic Cooperation and Development (OECD), which partnered with the AfDB on the AEO report, urged countries to exploit their untapped potential.
“African economies could benefit from mobilising the wide and extra-ordinary untapped potential of their diverse regions; putting people and places at the centre of policy making may improve Africa’s competitiveness and well-being of Africans,” Pezzini said.
And in spite of the continent’s fast growth, the AfDB outlook underlined the area of human development levels, noting that although it has increased since 2000 with 17 out of the 52 African countries reaching high and middle levels of development, more efforts are needed.
Abdoulaye Mar Dieye, Director of the regional Bureau at the United Nations Development Programme (UNDP), said inclusive and sustainable growth is the way to go to attain reasonable human development levels.
“We need to invest in building economic opportunities, including at local levels, especially for the young women and men who’re the architects of tomorrow’s Africa,” he said.
EAC Growth Factors
The Minister for Finance and Economic Planning, Amb. Claver Gatete, who was also speaking from Ivory Coast, said growth is strong in East Africa because individual countries in the region have invested a lot in positive reforms and policies.
“For instance, you notice that the countries in the EAC are especially looking good in the outlook, that’s because of the reforms that individual governments have in place,” Gatete said.
Indeed, the AfDB outlook points out that Kenya, Rwanda, Tanzania and Uganda, four of the five EAC partner states, have managed to keep their growth high even given the fact that they have small mining sectors and weak manufacturing bases.
During the report’s launch, Minister Gatete asked the African Development Bank to work out a robust plan of developing stock markets in Africa in order to enable private sector to mobilise the much needed capital.
“It’s important that we address the needs of small and medium enterprises that don’t have access to the AfDB funding, we need to invest in development of African Capital Markets as a more viable alternative through which private investors can mobilise investment capital,” he said.