East African economies are outperforming the rest of the continent, but investor bullishness is in stark contrast to public discontent.
Despite positive economic indicators, high unemployment and the rising cost of living have sparked public outpourings of frustration in countries including Kenya and Uganda.
Speaking at the Semafor Fall World Economic Summit, Equity Group CEO James Mwangi attributed the acceleration in East Africa’s economic growth to regional integration, which had boosted cross-border trade, as well as investments in infrastructure and energy.
“If the global markets supply the region with adequate capital, then we can see the region leading Africa in terms of development,” he said. Mwangi, however, noted that the growth momentum was yet to be felt by consumers, revealing that non-performing loans were still “unreasonably high.”
In his assessment of the continent’s economies at the Semafor Fall WES, Sim Tshabalala, CEO of South Africa-based Standard Bank also acknowledged East Africa as the fastest growing region saying it was “likely to continue to grow at about 5%”.
“Generally the East African region has been acting increasingly on an integrated basis, reducing tariff barriers and non-tariff barriers, making it easier to move stuff in that region – resulting in faster growth,” he said.
The East African Community bloc will see economic activity grow at 4.7% in 2024 and 5.7% in 2025–26, according to the Africa’s Pulse report published by the World Bank in October. Overall growth in sub-Saharan Africa, on the other hand, was revised down to 3% in 2024 from an earlier forecast of 3.4%, but steady at an average of 4% in 2025–26. Kenya, Rwanda, Tanzania, and Uganda were the largest contributors to the region’s performance.
The positive forecasts seem far detached from their realities for many, including in the subregion’s largest economy, Kenya. This year the country was gripped by massive youth-led protests over tax hikes, corruption, and police brutality. Uganda was also rocked by protests over alleged government corruption.
According to a poll by InfoTrak published in October, 73% of Kenyans think the country is headed in the wrong direction, with the cost of living, corruption and poor governance the biggest concerns for most.
Abdulmajid Nsekela, chief executive of CRDB, Tanzania’s largest bank by assets, told the World Economy Summit audience that accelerated development of digital financial services infrastructure as a key enabler of economic activity. He highlighted increased integration of telcos and banking services in Tanzania for enhancing financial inclusion. Tanzania’s economy, he said, “has recovered very well.”
Multiple small business owners in Nairobi told Semafor Africa that business had been slow and decried the state of the economy — saying they were yet to feel the growth.
“Money has not been circulating Iike it used to,” said James Ouma who runs an eatery in the South C neighborhood. “The things we buy like sugar and oil are more expensive, we’re having less customers, and more customers are taking credit.”
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