East Africa: EAC Economy On Recovery Track After Covid-19 Impact

Arusha — The East African Community (EAC) region will register a three percent growth this year compared to 0.9 per cent last year when it dropped following Covid-19 outbreak.

The anticipated growth will mainly be driven by the private sector consumption and domestic demand, according to a report released by Delloitte, a global think tank. The report, released in Nairobi yesterday, titled ‘ Economic Impact of the Covid-19 pandemic on East African economies surveyed the impact in Tanzania, Uganda, Kenya, Rwanda and Ethiopia.

It delves deeper on the macroeconomic insights and government mitigation measures against the pandemic which wreaked havoc on the multimillion dollar travel industry in the region.

“We expect the East African economic activity to pick up in 2021 with a three percent growth,” said Deloitte East Africa Financial Advisory Leader Gladys Makumi in a report accessed by The Citizen. Last year when the eastern Africa was subjected to various lockdowns and travel restrictions because of coronavirus, the region registered a mere 0.9 percent growth.

Besides the lockdowns and restricted movements, the eastern African region was subjected to slow vaccine roll out and budgetary pressures in some of the major economic activities. Globally, Covid-19 pandemic has taken more than four million human lives but has seen economic stimulus packages across the economies surplus $ 13 trillion.

The stimulus packages,according to the region, was four times more than the response to the 2008-2009 financial crisis which gripped the world. Considered the black swan of 2020, the Covid-19 pandemic ravaged through economies both globally and at an East Africa level, with far reaching effects witnessed across several sectors.

The pandemic is now considered part of the new normal, though navigating through this new reality is expected to be bumpy and slow with full recovery and rebound in 2021 still largely uncertain.

Tewodros Sisay, Deloitte East Africa Financial Advisory Associate Director noted, “This past year has truly shown that we are in a new reality.

Despite the pandemic taking more than 150,000 lives in Africa and the continent’s economy contracting by 2.1 percent, countries have largely remained resilient amidst the pandemic there are signs of recovery.

He said recovery would l be driven by tourism, agriculture, and manufacturing sectors.

Subsequently, it will also be driven by an uptick in investment activity in the private sector with long-term effects of foreign direct investment (FDI) diversification expected to take effect, notwithstanding the 9.6 percent reduction in FDI inflows into the East African region in 2020.”


Source link : https://allafrica.com/stories/202107150950.html

Author : Citizen

Publish date : 2021-07-15 16:58:30

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