Most East African countries have a positive economic outlook, largely due to the positive performance brought about by economic diversification, Institute of Chartered Accountants in England and Wales’ (ICAEW) said in their latest report released on Thursday.The accountancy body provides GDP growth forecasts for various regions, including East Africa which is set to grow by 6%, West and Central Africa at 3.1%, Franc Zone at 4.9%, and Southern Africa at 1.3%.
The report, commissioned by ICAEW and produced by Oxford Economics, highlights how East Africa remains the fastest-growing sub-region, and the economic outlook remains favourable, underpinned by vigorous domestic demand and public investments in infrastructure.
Kenya’s tourism industry was highlighted as a key player in the country’s efforts to diversify its economy away from a dependence on agriculture as a key foreign exchange earner.
Kenya’s medium-term tourism prospects remain robust, despite the corona virus outbreak currently being witnessed globally, supported by improvements in infrastructure, better air connectivity and easing visa regulations around Africa and the rest of the world.
“Kenya’s economic diversification strategies are increasingly buffering its economy from global shocks. More African countries, including Kenya, are prioritising the promotion of tourism as part of this plan,” said ICAEW’s Regional Director for the Middle East, Africa and South Asia, Michael Armstrong.
“Ongoing investment in infrastructure projects, resilient exports and the associated benefits from regional economic integration in the subregion will reinforce growth projections,” said ICAEW’s Regional Director for the Middle East, Africa and South Asia,” he added in a statement issued in Nairobi.
The report goes on to highlight how the economic outlook in Kenya is moderately positive.
GDP growth is projected at 5.5% in 2020 amid robust private consumption, higher credit growth, and rising public and private investment. In addition, rapid urbanization and further regional integration will likely continue to open up investment opportunities.
“The East Africa regions has maintained its status as the continent’s growth hotspot in the first quarter of 2020. The region’s output, which has slightly decelerated to 6% in 2020 is being kept stable by the fact that the region boasts some of the fastest growing economies globally,” the report stated.