EA to grow by 5.8pc, above Africa’s average

Wheat farmers in Uasin Gishu County, Kenya. The economies of East Africa are expected to grow, boosted by the agricultural sector. Photo/FILE Wheat farmers in Uasin Gishu County, Kenya. The economies of East Africa are expected to grow, boosted by the agricultural sector. Photo/FILE NATION By SCOLA KAMAU Special Correspondent In Summary New data from the African Development Bank (AfDB) show the five economies — Kenya, Uganda, Tanzania, Rwanda and Burundi — could grow by at least 5.5 per cent in 2013 and 5.8 per cent in 2014. This is above Africa’s average of 4.8 per cent in 2013 and 5.3 per cent in 2014. Latest projections by the International Monetary Fund and the World Bank independently project improved economic conditions in the remaining part of the year, riding on easing inflation across the region. East African economies are expected to pick up in the remaining part of this year into 2014, riding on a strong showing in the agricultural, mining and energy sectors. New data from the African Development Bank (AfDB) show the five economies — Kenya, Uganda, Tanzania, Rwanda and Burundi — could grow by at least 5.5 per cent in 2013 and 5.8 per cent in 2014. This is above Africa’s average of 4.8 per cent in 2013 and 5.3 per cent in 2014. Latest projections by the International Monetary Fund and the World Bank independently project improved economic conditions in the remaining part of the year, riding on easing inflation across the region. AfDB said the Kenyan economy is expected to reach 4.5 per cent growth in 2013 and 5.2 per cent in 2014, slightly below the latest projections by the country’s Treasury, which sees the economy expanding by six per cent in 2013. Kenya’s Treasury said last week the country will grow at a faster rate than in the past two years riding on renewed investor confidence following a peaceful general election and favourable weather conditions that are expected to boost agriculture. Data shows agriculture accounted for 25.9 per cent of Kenya’s GDP in 2012, up from 23.8 per cent in 2011. READ: Agriculture's strong growth spurs Kenya economy to 4.6pc Tanzania’s medium-term growth prospects are around 6.9 per cent and will rise to seven per cent in 2014, through a significant boost from natural gas discoveries. “The boom in natural gas production may eventually result in an even higher rate of growth in Tanzania,” said economists at the World Bank in their latest outlook on the economy. Projections for Rwanda’s economy however remain bleak. AfDB said while Rwanda’s real GDP was on course to grow by a robust 7.7 per cent in 2012, driven by services and industry, growth was projected to slow down in 2013 and 2014, due to foreign aid suspension, tight fiscal and monetary policies and weak global demand. “Growth is expected to be sustained at 7.6 per cent in 2013, driven by an expansion in services and construction, and to stabilise at around seven per cent over the medium term,” said the IMF on May 20. According to AfDB, Uganda’s growth could reach 4.9 per cent in 2013 and 5.5 per cent in 2014 but could be lower if the suspension of budget support, announced by several donors in November 2012 is maintained. “Resource-rich countries continue to benefit from relatively high commodity prices, although easing of global demand has reduced price levels. Good harvests have boosted agricultural production in many countries and also helped to mitigate adverse effects of high international food prices on consumers,” said AfDB president Donald Kaberuka. Burundi is likely to stagnate at four per cent although the mining sector could lift the economy. The economy has grown at an average of four per cent a year from 2005 up to 2012 but is still fragile.