East Africa’s economy is set to outperform other African regions in 2023 and 2024

[Deeq A.]

The 2023 African Development Bank Outlook reveals that East Africa is poised to be the continent’s economic frontrunner, with growth rates surpassing 5% in 2023 and 2024.
The services sector takes the lead in propelling East Africa’s GDP growth, accounting for half of the increase in 2022.
The report emphasizes the urgency of embracing eco-friendly transformation in East Africa, highlighting private sector financing as a key driver.
According to the recently released African Development Bank 2023 East Africa Economic Outlook, East Africa would have the greatest regional economic performance on the continent in 2023 and 2024, with growth rates of above 5%.

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East Africa’s economy is set to outperform other African regions in 2023 and 2024
CHINEDU OKAFOR
August 4, 2023 2:00 PM

East African Community
East African Community
The 2023 African Development Bank Outlook reveals that East Africa is poised to be the continent’s economic frontrunner, with growth rates surpassing 5% in 2023 and 2024.
The services sector takes the lead in propelling East Africa’s GDP growth, accounting for half of the increase in 2022.
The report emphasizes the urgency of embracing eco-friendly transformation in East Africa, highlighting private sector financing as a key driver.
According to the recently released African Development Bank 2023 East Africa Economic Outlook, East Africa would have the greatest regional economic performance on the continent in 2023 and 2024, with growth rates of above 5%.

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The analysis, which was released on Thursday, July 27, predicts that the region’s mid-term economic growth will increase to 5.8% in 2024 from 5.1% in 2023, outperforming all other African areas. Growth in Rwanda, Uganda, Ethiopia, Kenya, Djibouti, and Tanzania will be a major contributor to this.

The paper claims that the services sector in East Africa drove the region’s real GDP growth, accounting for about half of the increase in GDP in 2022. Compared to the average of 2.5 percentage points for the years 2015–2021, the sector’s contribution to GDP growth was just 2.0 percentage points. Due to the region’s natural and cultural features, there is a high demand for services including lodging, dining, and entertainment.

However, the East Africa area is exposed to a number of local and international downside risks that might derail the region’s promising economic prospects. These include a slowing in the world economy, rising commodity prices, the Russian invasion of Ukraine continuing, rules governing international commerce, worsening financial conditions worldwide, exchange rate depreciation, and a rise in COVID-19.
The domestic risks include gaps in infrastructure, domestic conflicts and political instability, macroeconomic imbalances, and adverse impacts of climate change,” the report states.

An evaluation of the recent macroeconomic performance of the area is provided in the annual flagship Africa Economic Report of the African Development Bank. The research provides an in-depth examination of current difficulties that the area is facing and also looks at medium-term predictions and the dangers to the region’s development future.

“Mobilizing Private Sector Financing for Climate Change and Green Growth” is the focus of the 2023 study. It explores the necessity of an eco-friendly transformation for Africa as well as the function of private-sector funding. It also makes the case for natural capital as a significant source of funding for climate-friendly economic development in East Africa.

The paper lists four problems that the economies in the area frequently encounter and which support a robust, inclusive green growth goal. They consist of dependency on natural resources, energy, and water shortages, as well as reliance on agriculture for a living. It exhorts East African nations to adopt green growth strategies by focusing on important industries including forestry, sustainable agriculture, and infrastructure.

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