This archive report was first published on 1 October 2019.
East Africa's economic diversity is proving to be a vital shield against global economic fluctuations, with the region set to grow by 6.3% in 2019, according to the latest report from the Institute of Chartered Accountants in England and Wales (ICAEW) - Economic Update: Africa Q3 2019, published on October 1, 2019.
While most African countries are struggling with the impact of the US-China trade war and a slump in commodity prices, East Africa's economic diversity is helping to cushion the region from these shocks. The report highlights the strong performances of Kenya and Ethiopia, which are driving East Africa's growth.
Kenya, in particular, has recently joined the league of oil-exporting nations after a cargo of 200,000 barrels of oil from Turkana was shipped from Mombasa. This development gives Kenya a chance to enhance its economic diversity and include oil exportation as a foreign exchange earner.
Speaking during the launch of the quarterly report, Michael Armstrong, ICAEW's Regional Director of the Middle East, Africa and South Asia, noted that Kenya's strong service sector is shielding its economy from the trade war and global commodity price slumps. He added that the country's diversity has played a key role in helping it weather the storm caused by oil price instability.
East Africa's growth is expected to be boosted by the entry of Uganda and Tanzania into the league of petrochemical exporters within the next few years. However, the region's growth rate is projected to be slightly lower than in 2018, at 6.3%.
Other regions in Africa are facing different challenges. Southern Africa is forecast to struggle with a growth rate of 1.3% in 2019, due to policy uncertainty, concerns over debt-laden parastatals, and high unemployment. Central and West Africa are expected to grow at 3.4% in 2019, while the Franc Zone is forecast to grow at 4.7%. North Africa's real GDP growth rate is expected to slow to 2.8% in 2019, due to oil production disruptions in Libya and weak Eurozone demand.
