East Africa’s economy is the best performing in the continent, the latest report by the Institute of Chartered Accountants in England and Wales (ICAEW) dubbed Economic Insight: Africa has revealed.
ICAEW attributes the region’s strong performance to economic diversification and investment-driven growth
Ethiopia remains the region’s powerhouse, with the country’s GDP expected to grow at 8.1% owing to the recent reforms being implemented by new Prime Minister Abiy Ahmed.
The report notes that diaspora remittances (money sent from abroad) are a key economic driver for most African countries.
“East Africa’s Gross Domestic Product (GDP) will grow by 6.3% this year significantly more than the continent’s other regional economic communities,” reads the report.
The accountants’ body tips West and Central Africa’s GDPs to grow at 2.9%, Franc Zone at 4.6%, Northern Africa at 1.8% and Southern Africa at 1.5%.
ICAEW however notes that the development comes in the backdrop of economic slowdown in the region.
The report commissioned by ICAEW and forecaster Oxford Economics further reveals that diaspora remittances were Kenya’s highest foreign exchange earner overtaking tea, coffee and tourism, the country’s top foreign earners in 2017.
“The recent entry of global payment and remittance firms into the East African market has eliminated significant barriers that have hindered consumers and businesses in the region from taking full advantage of remittances,” reads part of the report.
According to the report, Nigeria’s slow economic growth has been occasioned by non-oil economic activity in the country. Ghana by contrast is the best performing country in West Africa with a forecast growth of 6.5%.
The report also states that Uganda’s economic growth recovered markedly in 2017.
The country is expected to post a surplus of about 5.6% of GDP this year, supported by project aid and remittances inflows.
“Despite the recent growth slump; all regions in Africa are projected to report a positive economic outlook, with remittance income expected to be a key economic booster in the coming months.” says Michael Armstrong ICAEW’s Regional Director for Middle East, Africa and South Asia in the report.
Ivory Coast’s GDP is expected to grow at 7.4% courtesy of heavy investment which will also boost Franc Zone’s economy.
Egypt’s GDP growth is forecast at 5.3%, owing to structural and policy reforms, which have boosted manufacturing and investment. The North African country’s tourism sector has also continued to recover after political turmoil in recent years.
Libya is expected to record a growth of 16.5%, owing to improvements in oil production after the civil conflict.
Southern Africa has been affected by continued slow growth by the regional heavyweight South Africa, forecast at 1.5%.