East Africa is poised to reclaim its position as Africa’s fastest-growing region this year and the next, according to projections by the African Development Bank (AfDB).
The AfDB’s latest report anticipates an acceleration in the average real GDP growth for East Africa’s 13 economies, reaching 4.9 percent in 2024 and further rising to 5.7 percent in 2025. This robust growth is expected despite ongoing conflicts in Sudan and South Sudan, which are likely to experience economic contractions.
Key drivers of this growth include substantial government spending, strategic investments to enhance internal connectivity, and efforts to facilitate trade with neighboring countries. Additionally, ongoing modernization of agricultural production and increased productivity in the services sector are pivotal to the region’s economic expansion, as highlighted in the report.
On a broader scale, Africa’s economic growth is forecasted to average 4 percent both this year and next, maintaining its status as the second fastest-growing region globally, after Asia.
Approximately 40 African countries are projected to achieve higher growth rates this year, with 17 economies expected to expand by more than 5 percent. This number could increase to 24 by 2025, according to the AfDB.
West Africa is anticipated to be the second fastest-growing region with a 4.2 percent growth rate this year, followed by Central Africa at 4.1 percent, and North Africa at 3.6 percent. In contrast, Southern Africa is projected to lag with a growth rate of 2.2 percent.
However, several risks could impede this growth trajectory. Persistent inflationary pressures and rising commodity prices pose significant threats, potentially sparking further price hikes, undermining poverty reduction efforts, and delaying monetary easing. Moreover, climate shocks, including flooding in East Africa and drought in Southern Africa, represent major risks to the continent’s economic recovery, the AfDB warned.
