The manufacturing sector remains a pillar to future growth in East Africa, African Development Bank’s lead Economist for East Africa has said.
Dr. Marcellin Ndong-Ntah said the manufacturing sector had the potential to accelerate the region’s economic growth and ultimately reduce poverty significantly.
“In order to achieve this objective, countries must continue to look for alternative sectors of economic growth, emphasise regional trade and continue to process goods for export rather than selling raw commodities,” Ndong-Ntah said.
He spoke during the launch of the East Africa Regional Economic Outlook report in Nairobi, Kenya.
Growth across East Africa is expected to be around 5.9 percent in 2019, higher than the continental average growth rate of 4%, thus making it a promising investment and manufacturing destination, according to the 2019 East Africa 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% followed by Rwanda next at 7.8%; Others are Tanzania at 6.6%; Kenya 6%, Djibouti 5.9% and Uganda 5.3%.
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 five landlocked countries and presence of small island states such as the Comoros and Seychelles also offer opportunities for integration.