The Eastern Africa region has remained resilient despite numerous challenges, with the average gross domestic product (GDP) growth rate projected at 5.8 per cent in 2024, a decline from the 6.3 per cent growth registered in 2023.

According to a report by the United Nations Economic Commission for Africa (UNECA), launched at the ongoing Intergovernmental Committee of Senior officials and experts in Central and Eastern Africa (ICSOE) in Cameroon, economies in the region have faced numerous headwinds.

Macroeconomic conditions in the region have been marked by heightened volatility in inflation and exchange rate movements, with several countries experiencing pronounced pressures from currency depreciation.

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As a result, monetary policies were tightened to control inflation in many countries, with the report calling for more efforts to stabilize currencies and protect against future fluctuations.

Before the Covid 19 pandemic that brought global economies to a halt, a few countries in Africa, including Rwanda, were registering double digit growth. Achieving the pre-pandemic growth levels is, however, proving elusive for most countries in the region.

According to Andrew Mold, Acting Director of the sub-regional office for East Africa at UNECA, the contribution of the industrial sector to overall growth must increase.

"East Africa continues to be a fast-growing region, but the caveat is that the capital incomes are still relatively low. So, to recover growth and achieve double digits, the region will need a more vibrant manufacturing sector,” he said.

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For Adama Ekberg Coulibaly, UNECA's Lead Economist at the Sub-Regional Office for Central Africa, the continent needs to minimise the effects of the global economic environment that adversely affects many African countries.

"One of the ways of cushioning African countries is by implementing the African Monetary Fund which will serve as a pool for Central Bank reserves and AU Member States national currencies,” Coulibaly told The New Times.

He also noted that African countries will need to have a good command of their exchange rate policies adding that trade on the continent is dependent on the exchange rate.

Research & Development

Research and development (R&D) has been identified as a key driver of economic diversification and growth, as well as wealth creation and self-reliance in Africa.

However, spending in R&D on the continent remains low.

"Africa’s gross expenditure on R&D as a proportion of GDP stands at about 0.5% compared to the world average of 2.2%," Mold said.

Emphasising on the importance of R&D, Mold noted that economic diversification can only be achieved through investments in new products and new markets and not by exporting high volumes of the same products, as is the case currently in Africa.

African heads of state had committed to raising their national gross expenditure on R&D to at least 1 per cent of their GDP to increase innovation, productivity, and economic growth. However, this has remained a pipe dream for many of the African countries.

Jean Luc Mastaki, the Director of the Sub-regional office for Central Africa UNECA, told The New Times that the continent will need to find alternative means of financing for R&D.

"Public-Private partnerships are key to unlocking financing needed in R&D,” he said, adding that researchers need to be trained to translate their ideas into entrepreneurship.