Uganda is expected to post stronger growth compared to Kenya, two of East Africa’s largest economies, according to International Monetary Fund (IMF).
The growth, despite presence of a number of economic challenges, will be higher than many sub Saharan African countries, many of which are still struggling with Covid-19 related effects, debt repayment, a slowdown in the global economy and disruption of the global supply chain.
Details released by the IMF indicate that Uganda will grow at 5.7 percent in 2024, which is slightly higher than Kenya’s 5.4 percent and South Sudan’s 4.6 percent.
However, Tanzania, which is projected to grow at 6.2 percent, will post higher growth than Uganda. Rwanda and Burundi are also expected to post higher growth than Uganda at 7.5 percent and 6 percent.
Dr Abebe Aemro Selassi, the IMF director African department, said growth across sub Saharan Africa will vary from one country to the other, with some countries, particularly within East Africa, or non-oil resource intensive countries, expected to fare better.
However, poor performance within some economies such as South Africa where growth is projected to decelerate to only 0.1 percent are likely to impact sub Saharan growth as a whole.
Growth in sub-Saharan Africa is expected to decelerate to 3.6 percent before rebounding to 4.2 percent in 2024 due to global recovery, falling inflation and a winding down in monetary policy tightening.
This is the second year IMF is recording low growth rate for sub Saharan Africa.
Sub Saharan Africa has experienced a weakened economic position with a number of economic fundamentals registering volatile movements.
For instance, the region has seen public debt and inflation grow to levels not seen in decades, with double-digit inflation present in half of countries, which has eroded household purchasing power.
The IMF said sub Saharan Africa public debt as a share of gross domestic product has grown to 56 percent, driven by widening fiscal deficits due to overlapping crises, slow growth, and exchange rate depreciations.
Elevated public debt levels, IMF said, have raised concerns about debt sustainability, with 19 of the region’s 35 low-income countries already in debt distress or facing high risk of debt distress in 2022.
This has been worsened by an increase in inflation, even as at the beginning of 2023 a number of countries within the region had started to register declines.
However, projections point to inflation staying above pre-Covid-19 levels throughout 2027, which IMF noted, will need policymakers to continue a delicate balance between keeping inflation in check while being mindful of supporting a fragile recovery.
