Market News

Kenya and Ethiopia dynamic economies lift regional GDP

ICAEW's Middle East, Africa and South Asia regional director Michael Armstrong. FILE PHOTO | NMG
ICAEW's Middle East, Africa and South Asia regional director Michael Armstrong. FILE PHOTO | NMG 

Economic dynamism has lifted eastern Africa’s growth despite harsh political climate witnessed in Kenya and Ethiopia, the biggest contributors to the region’s gross domestic product (GDP).

A report by a UK-based accountant’s body, the Institute of Chartered Accountants in England and Wales (ICAEW), said the regional powerhouses had political problems in the year without which their economic performance would have been better.

“East Africa is forecast to show very strong real gross domestic product (GDP) of 5.9 per cent over the full year 2017. The biggest contributor to this expansion was Ethiopia (accounting for a full two per cent of regional GDP growth), with its stellar performance of 7.1 per cent. Another 1.7 per cent of the increase in regional output will result from Kenya’s strong performance of 4.6 per cent growth,” said ICAEW.

Middle East, Africa and South Asia regional director Michael Armstrong said: “Without the political uncertainty, the two East African countries would have seen better growth.”

The report noted Kenya’s disputed elections and subsequent repeat presidential election delayed some investment decisions while protests in some areas hampered business.

In Ethiopia overall economic dynamism resulting from large-scale investments and modernisation continues but severe foreign exchange liquidity constraints will weigh on economic activity going forward.