By Elie Mutangana
The African Development Bank (AfDB) has unveiled insights that East African countries have collectively experienced a decline in economic growth (GDP) from 4.7 percent in 2021 to 4.4 percent in 2022.
However, despite the slowdown, the region surpassed Africa’s GDP average of 3.5 percent.
According to the report, the slowdown was attributed to various factors that weighed down on the region, including global economic setbacks, commodity and energy price hike due to Russia-Ukraine war, unfavorable weather conditions, political concerns, lingering effects of COVID 12 and debt burden among the governments.
The report showed that countries like Ethiopia, Kenya, Rwanda, Sychelles, Tanzania and Uganda were embraced as the best performing countries, while countries like Burundi, Comoros, Djibouti, Eritrea, Somalia, S.Sudan and Sudan recorded lower growth rates.
Contrary, countries like Sychelles and Rwanda, particularly estimated the highest growth of 9.5 percent and 9.0 Percent, respectively.
For instance, Rwanda recently generated $9 million from hosting, Basketball Africa League (BAL) according to Rwanda Develop Board (RDB).
It also earned revenues from hosting international and continental conference and events as it substantially embraced strides in the hospitality sector.
Sychelles earned tremendously from its growing fishery sector.
However, the region generally encountered considerable pressure from debt and funding squeeze, with the average total public debt as a share of GGP remaining at 57 percent in 2022.
Eight East African countries from 13 experienced a deterioration in their current account balances due to high import bills, weak export recovery and increased external debt service.
East Africa had also nine countries listed on the highly indebted poor countries (HIPC) list, namely Burundi, Comoros, Eritrea, Ethiopia, Rwanda, Somalia, Sudan, Tanzania and Uganda.
Domestically, risks like; substantial infrastructure gaps, escalating domestic conflicts and political instability is continuing to hinder the region.
Indeed, the current clashes between Sudan’s military and the Rapid Support forces (RSF) has also posed threat to regional stability and has threatened the potential growth rates.
Furthermore, the region had a rise in services demand due to increase of urban population and the rise of middle class population which actually accounting 22.6 percent collectively.
However, despite those challenges, economic growth in the region is expected to grow to 5.1 percent in 2023 and 5.7 percent in 2024.
Moreover, the region’s inflation rate is has decreased from 40.7 percent in 2021 to 28.8 percent in 2022. It is also projected to reach to 24.2 in 2024.
The decrease is attributed to tighter monetary policies implemented by most of the countries of the region.
