Featured Image via Flickr/Mark Souther
Recently, Ecobank published a report in its East African category on its flagship financial website, AfricaFICC. Ecobank is a parent company of the leading, independent pan-African banking. It has a presence in 36 African nations.
Kenya, Ethiopia, Tanzania and Uganda are the economic powers of the East African region. The nations have experienced significant economic growth. According to JoyOnline, the previously mentioned nations have experienced a growth in their forecasted GDP between 5.2% and 8.5% this year. The GDP growth has been supported by improvements in commodity prices and ongoing reforms in the nations’ infrastructures. This has increased their export revenues.
Dr. Edward George, Ecobank’s Head of Group Research explained, “The countries in East Africa, most of them members of the East African Community (EAC), make up one of the most dynamic commercial and economic regions in Africa. East Africa is a leading exporter of tea, coffee, cut flowers and minerals to world markets, is a financial, logistics and services hub, and has some of the most diverse intra-regional trade flows in Africa.
Additionally, the region is heavily reliant upon its agriculture sector. So, there is much economic optimism as the region has experienced increased productivity and export earnings from its agricultural crops and commodities. There is room for further growth in their economies through the combined effects of further improvements in infrastructure, industrialization, major oil discoveries, export diversification, and growth in commercial services.
Ecobank’s Kenya Managing Director and Regional Executive of Central of Eastern and Southern African (CESA) countries, Samuel Adjei stated, “The East African nations look set for continued and sustained economic growth, assisted by commodity prices and the prospect of significant oil production. The region is a world leader in disruptive Fintech, illustrated by the resounding success of mobile money and Kenya, together with Rwanda, Tanzania and Uganda, represent a regional powerhouse for global commercial services.”
More specifically, the East African nations such as Ethiopia are benefitting from foreign direct investment in industrial and infrastructure. Additionally, nations like Tanzania and Kenya are specializing in diversified commodity exports including tea, coffee, gold and crude oil. Both Kenya and Uganda have plans in place for oil pipelines to increase oil production.
However, there still exists factors that are stifling economic growth in the region. For one, the ongoing conflict in South Sudan has severely slowed economic growth and development of the nation and its infrastructure. Despite the turmoil, the nation still has fertile soil, significant oil reserves and a growing population that could form the foundation for future economic growth.