East Africa’s economy to grow by 5 percent in 2024

CEO Roundtable Meeting on East African Integration and Economic Outlook 2024 organized by the East African Business Council (EABC) in partnership with Kenya Private Sector Alliance (KEPSA), Kenya Association of Manufacturers, (KAM) and RSM Eastern Africa revealed East Africa’s economic growth is projected to rise to 5.1% in 2024 and 5.7% in 2025.

Kenya’s tax to GDP is at 14.3%, and Saving to GDP at 10.2%. Kenya recorded a positive trade balance with EAC Partner States of USD 408.3 said Mr. Ashif Kassam, O.G.W, Executive Chairman, RSM Eastern Africa.

Mr. John Bosco Kalisa, EABC Executive Director stated, “Share of Intra-EAC trade was at 15% in 2022, and major intra-EAC trade block is costs of non-tariff barriers.”

He stated Governments of EAC Partner States should fully implementation commitments of the Single Customs Territory to offer Green lane for EAC originating goods.

In his remarks Jas Bedi, EBS, MBS, Chairperson KEPSA & Vice Chairperson EABC stated that the Stay of Application to the EAC Common External Tariff creates unleveled playing field to manufactures in the region distorting the market making imports outside the EAC bloc cheaper.

The Chief Guest: Annette Mutaawe Ssemuwemba, EAC Deputy Secretary-General: Customs, Trade, and Monetary Affairs stated that full admission of the Federal Republic of Somalia into the EAC crates new opportunities for business. She highlightedTanzania is undertaking piloting and will soon announce full implementation of One Network Area on Telecommunication.

EAC Deputy Secretary-General Annette Ssemuwemba stated that EAC’s total trade with Africa continent continued to increase with the value of trade worth US$ 5.2 billion in 2023 Q3, representing 24.8 percent of total trade. Trade with Africa grew by eight percent on a quarter-to-quarter basis. The intra-EAC trade was valued at US$ 3.3 billion, accounting for 15.7 percent in 2023 Q3 having increased from 12.9 percent in in Q3 2022.

The panel session shared invaluable insights into the economic trajectory of the region, continent, and beyond. Mr. Anonty Mwangi, CEO Kenya Association of Manufacturers called for the need to strengthen regional value chains integration, harmonization of standards and joint initiatives to maximize natural resources such as hydropower and LNG in Tanzania make the EAC a center of green manufacturing in the globe. In her contribution, Ms. Susan Maigi, Chair Trade & Investment Sector Board of KEPSA stated EAC Partner States should complement comparative advantages, improve human capital, diversify supply chains in light of external shocks. On his part Mr. Charles Omusana, Principal Economist (Investment & Private Sector Promotion) East African Community Secretariat stated that investment policies in Kenya should offer preferential treatment to East African.

Mr. Kassam stated “tax should not act as a discriminatory factor discouraging cross-border trade in goods or services in EAC.”  These include unharmonized domestic taxes such as withholding taxes of 15-16% for professional service providers from other EAC countries and excise duties.

The RSM Eastern Africa & EABC outlook reveals Kenya’s economy grew by 5.9% in Q3 2023 compared to the same period last year. The growth was driven by a strong rebound in agriculture (+6.7%), supported by favorable weather conditions. Other sectors like finance, information & communication, and tourism also saw significant growth. Kenya’s real GDP growth is projected to remain strong at 5.2%. Inflation is expected to slow down further, averaging around 6.5% in 2024, bringing it closer to the Central Bank’s target range. The Central Bank of Kenya (CBK) is expected to keep the policy rate on hold at 13.00% over Q2-Q3 of 24, before cutting to 12.50% by year-end. Inflation will remain high over the first half of the year but will moderate sufficiently by the last quarter, allowing the CBK to begin monetary easing. The Kenyan government controls fiscal policy through various new tax rates and levies have been introduced as a result of the Finance Act 2023 including a housing levy chargeable on personal emoluments. The VAT rate on fuel was standardized to 16%, and the capital gains tax increased to 15%. The infrastructure sector is expected to slow to 4.1% in 2023, due to low public infrastructure investment and high inflation. The panel session shared invaluable insights into the economic trajectory of the region, continent, and beyond.

Illicit trade – counterfeit, Sub standards, High cost of doing business- electricity and transport and Currency depreciation are among the issues raised by the 50 business leaders during the CEO Roundtable who engaged in discussions with EAC  Officials including Director Customs and Trade Flavia Busingye.

Source: EABC


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