NAIROBI, Dec. 14– Countries in the East African region could experience modest economic growth in 2024 after surviving some headwinds in 2023, says a report launched Wednesday by Deloitte, an international auditing firm, in Nairobi, the Kenyan capital. Themed “Cautious optimism amid economic turbulence,” Deloitte’s report provides a comprehensive overview of the current economic landscape in the region, characterized by multiple shocks including currency depreciation, high cost of living, drought, elevated public debt and geopolitical tensions. Tewodros Sisay, Deloitte Africa Economic Advisory leader, noted that economic growth in East Africa is expected to rebound in 2024, increasing by an average of 6.5 percent, almost Africa’s double gross domestic product (GDP) growth rate of 3.3 percent in the same period. “This will be supported by a full recovery of the service sector, improved export performance and a recovery in private consumption,” Sisay said. “However, we remain cautiously optimistic as debt sustainability, rising debt service costs because of currency depreciation and the global economic slowdown could affect the region’s expected economic growth.
” According to Deloitte’s publication, which covers six countries including Kenya, Ethiopia, Rwanda, Tanzania, Uganda and the Democratic Republic of the Congo (DRC), the four themes shaping the macroeconomic outlook for the East African region include trade and investment; global inflation; monetary policy and financial stability; fiscal policy and debt sustainability. The average inflation in the region rose from 13 percent in 2022 to 14.5 percent in 2023, driven by high food and energy prices, currency depreciation, lingering impacts of the COVID-19 pandemic, and climatic shocks, the report says. Inflationary pressures are expected to ease in 2024, as global supply chain disruptions subside, says the report, adding that East African countries may still require fiscal adjustment policies to manage debts sustainably next year. Gladys Makumi, Deloitte East Africa Financial Advisory leader, said the region has the potential to overcome economic headwinds through increased trade and investments. “Regional integration will continue to play a key role in East Africa’s economic growth,” Makumi said. She added that the implementation of an East African Community (EAC) customs and monetary union will boost recovery in the export of goods and services, even as the region reaps from enhanced integration. The region will also benefit from the African Continental Free Trade Area (AfCFTA) since trade growth is expected to spur demand for higher production capacity and investments in cross-border infrastructure, Makumi said.
Xinhua
