The International Monetary Fund’s World Economic Outlook predicts a robust 5.9 percent economic growth in the East African Community (EAC) this year. Tanzania stands out for leading the EAC in reducing inflation, with a projected four per cent, down from 4.4 per cent last year.
Uganda and Kenya follow with projected inflation rates of 5 and 6.5 per cent, respectively. The Democratic Republic of Congo (DRC) and South Sudan are tied with a projected 7.5 per cent inflation rate for 2024.
Tanzania is expected to maintain economic stability with the lowest inflation. In contrast, while experiencing a significant drop in inflation, Burundi and Rwanda project higher rates at 10 per cent and nine per cent, respectively.
Rwanda and the DRC are expected to lead the EAC states in GDP growth, with the DRC at seven per cent (up from 6.7 per cent last year) and Rwanda at seven per cent. Other EAC countries show moderate but substantial increases, ranging from four to 6.1 per cent. The collective economic resilience of the region is evident as EAC economic growth surpasses the sub-Saharan average of four percent.
The report is cautious about Somalia’s entry into the bloc, acknowledging the expansion’s strategic significance but highlighting potential geopolitical tensions and conflicts due to Somalia’s fragile security situation.
Climate change poses a significant economic risk in the region, affecting agriculture, and the report suggests diversification, infrastructure development, and technological innovations as solutions. Economic empowerment of women, youth, and small and medium enterprises is crucial for sustainable economic growth.
The 2024 African Outlook Report anticipates overall continental economic growth at four per cent, up from 3.3 per cent last year. East Africa, driven by Tanzania, Rwanda, Uganda, and Kenya, takes centre stage in this growth narrative, showcasing higher growth rates fueled by natural resources, transportation, tourism, and agriculture.
Increased investment from Gulf countries is identified as a potential catalyst for further acceleration, shaping East Africa into a model region for economic resilience and diversification, according to Fadekemi Abiru, Head of Insights at Stears, a global think-tank.