East Africa leads the way as continental economy rebounds

INFOGRAPHIC | BARNABAS MKWAYU

By  Josephine Christopher

Josephine Christopher is a business reporter for The Citizen and Mwananchi newspapers.

Mwananchi Communications Limitted

What you need to know:

• Tanzania is also on a positive trend as the 20th edition of the country’s Economic Update from the WB has termed its growth at 5.6 percent in 2024, with a long-run potential of around 6 percent.

Dar es Salaam. The World Bank (WB) projects that the East African sub-region will experience the fastest pace of economic growth in sub-Saharan Africa during 2024 and 2025.

According to the April 2024 edition of Africa’s Pulse, a biannual survey of African economies, the economic growth in sub-Saharan Africa is expected to accelerate to 3.4 percent in 2024 rising from a low of 2.6 percent in 2023 and further to an average rate of 3.9 percent in 2025.Within the region, the EAC countries alone are expected to be on the forefront with the community expected to grow at an average of 5.3 and 5.8 percent in 2024 and 2025, respectively.

This according to the WB is thanks to robust growth in the Democratic Republic of Congo, Kenya, Rwanda, and Uganda.

Tanzania is also on a positive trend as the 20th edition of the country’s Economic Update from the WB has termed its growth at 5.6 percent in 2024, with a long-run potential of around 6 percent.

Increased private consumption and declining inflation are supporting an economic rebound in sub-Saharan Africa.

Read: East Africa's exports to rest of the continent hit $9 billion

However, WB states that the recovery remains fragile due to uncertain global economic conditions, growing debt service obligations, frequent natural disasters, and escalating conflict and violence.

One of the key risks in Tanzania includes climatic shocks same for other eastern African countries like Ethiopia, Somalia, and Uganda where flooding due to heavy rainfalls leads to loss of lives and livelihoods and displacement—thus magnifying food security problems.

The rains also led to a surge in cases of vector- and water-borne diseases.

In a later released press statement, the WB highlighted that inequality in sub-Saharan Africa remains one of the highest in the world, second only to the Latin America and Caribbean region, as measured by the region’s average Gini coefficient.

Access to basic services, such as schooling or healthcare, remains highly unequal despite recent improvements.

World Bank Chief Economist for Africa Andrew Dabalen was quoted saying that in the context of constrained government budgets, faster poverty reduction will not be achieved through fiscal policy alone.

“It needs to be supported by policies that expand the productive capacity of the private sector to create more and better jobs for all segments of society,” he said.The data suggest that while inflation is easing in most economies, falling from a median of 7.1 to 5.1 percent in 2024, the rate remains high compared to pre-Covid-19 pandemic levels.

“…due to multiple factors including structural inequality, economic growth reduces poverty in sub-Saharan Africa less than in other regions,” it reads in part.

Co-author of a forthcoming World Bank report on tackling inequality in sub-Saharan Africa Ms Gabriela Inchauste said Inequality in Africa is largely due to the circumstances in which a child is born and accentuated later in life by obstacles to participating productively in markets and regressive fiscal policies.

“Identifying and better addressing these structural constraints across the economy offers a road map for a more prosperous future,” she said.