The manufacturing sector will hold the key to future growth in East Africa, the African Development Bank’s Lead Economist for the Bank’s East Africa Regional Office has said.
Dr Marcellin Ndong-Ntah said the manufacturing sector’s potential to accelerate regional economic growth, generate more job creation, and ultimately reduce poverty was significant.
"In order to achieve this objective, countries must continue to look for alternative sectors of economic growth, emphasize regional trade and continue to process goods for export rather than selling raw commodities,” Ndong-Ntah said.
Mr. Gabriel Negatu, Director General of the Bank’s East Africa Regional Development and Business Delivery Office East Africa Regional Office, said robust economic growth was possible in countries taking steps to move their economies away from reliance on the export of raw commodities like tea, coffee, minerals and oil.
Economic growth across East Africa will remain robust at 5.9 percent in 2019, higher than the continental average annual growth rate of 4 per cent and making it a promising investment and manufacturing destination, according to the 2019 East African Economic Outlook Report
The report puts Ethiopia in the lead as the fastest growing economy in the region with an average annual growth rate of 8.2 per cent followed by Rwanda next at 7.8 per cent; Others are Tanzania at 6.6 per cent; Kenya 6 per cent, Djibouti 5.9 per cent and Uganda 5.3 per cent.
Overall, most of the economies in East Africa are expected to continue on higher growth trajectories, with an expected average annual economic growth of 6.1% in 2020. This will be driven by the high investment rate, robust private consumption from the demand side; and agriculture recovery, and expansion of industry and services from the supply side, the report noted.
Dr. Abraham Mwenda, Lead Economist at the Bank’s East Africa Regional Office noted that despite rising debt levels across the continent, there is no systemic risk of debt crisis yet. He also noted that even though many African countries are recording robust growth rates, the growth is still insufficient to address the employment challenge across the continent.
On regional integration, the regional report noted that there are numerous opportunities for fostering monetary unions, cross-border transportation, and regulatory bonds to increase the ease of movement of goods, services and people.
The region’s 5 landlocked countries and the presence of small island states such as Comoros and Seychelles also offer opportunities for integration.
This is consistent with the key findings of the Continental Economic Outlook Report.
In fact, the continental report emphasizes that regional integration is imperative for African economies because it increases market size and boosts trade among members by removing trade barriers, helps to exploit economies of scale, enhances competition and increases cross-border investments, and at a deeper level, fosters peace and security.
editor@newtimesrwanda.com