Eastern African countries average per capita income reached 740 USD in 2016, double the figure ten years earlier, according to a report by the United Nations Economic Commission for Africa (UNECA).
According to new ECA report entitled Macroeconomic and Social Developments in Eastern Africa 2018, despite the marked improvements, growth in the region is still fragile. In particular, the development of the manufacturing sector in Eastern Africa has been lagging behind, limiting job creation and holding back technological progress.
The report states that the economic performance of Eastern Africa has been impressive in recent years, with an average annual growth rate of 6.5 percent between 2012 and 2016 – much higher than the African average and even outpacing East Asia. The people of the region live longer and healthier, receive better education, and enjoy an improved quality of life compared with just a generation ago. The report further states that these positive results are largely attributable to increased state capacity, as governments in the region have rebuilt their institutions after the ‘lost decades’ of the 1980s and 1990s. Where state action has been effective, improvements have been largest.
Despite the positive developments, there are a number of challenges looming on the horizon. Amid the severe drought conditions which afflicted parts of the region, Eastern Africa recorded a marked moderation in its economic growth in 2016, down to 5.5 per cent from 7.1 per cent in 2015. According to UNECA estimates, regional economic growth was little changed in 2017 (at 5.5 per cent), with a modest acceleration to 5.9 per cent being forecast for 2018.
The report notes that other than in Ethiopia, which has implemented an ambitious programme of export-oriented industrial parks, government policies have not thus far managed to promote robust growth in the manufacturing sector.
Another important theme highlighted in the report is the need to improve the business environment in Eastern Africa. Private sector development has been relatively lackluster and the bulk of productive investments are still accounted for the public sector. Growth would be stronger and more resilient if policies were implemented to bolster private sector activity, the report argues.
“Albeit from a very low base, this is the result of sustaining rates of economic growth considerably higher than African or global averages over the period” says Andrew Mold, Acting Director the Office for Eastern Africa of ECA.
“We should not fool ourselves – the region still needs to confront some serious developmental challenges if it is to attain the Sustainable Development Goals in 2030 – but in general the people of Eastern Africa now live longer and healthier, receive better education, and enjoy an improved quality of life compared with just a generation ago”, stressed Mold.
The Eastern Africa region comprises: Burundi, Comoros, D.R Congo, Djibouti, Ethiopia, Eritrea, Kenya, Madagascar, Rwanda, Seychelles, Somalia, South Sudan, Tanzania and Uganda.
Related Stories