EAST AFRICA REGION TO GROW AT 5.2% IN 2015

NAIROBI, Kenya - East Africa’s Growth Domestic Product (GDP) is expected to rise from 4.6 per cent to 5.2 per cent in the 2015/16 fiscal year despite an unexpected weaker global growth, a new World Bank report reveals.

The Africa’s Pulse Report, however, paints a grim picture of the manufacturing and agriculture sectors, whose output shares are declining across the region. 

This is despite most workers, and almost 80% of the poor still deriving the bulk of their income from farming.

“Commodity prices are either stable or declining while African economies continue to expand at a moderate rapid pace,” says the report.

World Bank Lead Economist for Africa and a co-author of the report Punam Chuhan-Pole said growth in agriculture and the services sector in Africa has been more effective in reducing poverty than growth in industry.

“In the rest of the world, by contrast, industry and services have a larger impact on reducing poverty,” he said. 

The Africa Pulse Report is done twice-yearly, to analyse the issues that shape Africa’s economic prospects.

According to the report, significant public investment in infrastructure, increased agricultural production and expanding services in retail, telecoms, transportation, and finance, are expected to continue to boost growth in the region.

This pick-up in growth is expected to occur in a context of lower commodity prices and lower foreign direct investment as a result of subdued global economic conditions, says the report. Commodity prices remain highly significant to Africa’s outlook since with primary commodities accounting for three-quarters of sub-Saharan Africa’s total goods exports.

The share of the region’s top five exports in total exports has climbed to 60 per cent in 2013 from 41% in 1995. World Bank’s chief economist for Africa Francisco Ferreira said Africa is generally forecast to remain one of the world’s three fastest growing regions.

East African Business Week