Ethiopia continues to widen its lead as the fastest growing economy in East Africa, taking advantage of Kenya’s economic challenges to post record growth.
Latest economic data by the Institute of Chartered Accountants in England and Wales (ICAEW) showed Ethiopia as the region’s largest contributor to growth during the turbulent fourth quarter period of 2017.
Ethiopia recorded a massive 7.1 per cent growth in GDP over the last four months of 2017 against Kenya’s 4.6 per cent that was adjusted downwards to reflect challenges arising from a long drought and a general election.
This subsequently saw Ethiopia emerge the biggest contributor to growth in East Africa - accounting for two per cent of regional GDP growth against Kenya’s 1.7 per cent.
“Despite having experienced tough political environments, Kenya and Ethiopia posted good growth margins,” explained Mr Michael Armstrong, regional director, ICAEW Middle East, Africa and South Asia.
“Without the political uncertainty, the two East African countries would have seen better growth,” he added.
Kenya’s lengthened electoral process took the better part of the last six months and was marked by protests leading to loss of life and property across several parts of the country.
This dampened investors’ appetite and production.
Last year, Ethiopia overtook Kenya for the first time to become the fastest growing economy in East Africa.
Data from the Kenya National Bureau of Statistics (KNBS) indicates that in the last calendar year Kenya exported Sh121 billion worth of goods and services to her four EAC neighbours.
The report indicates while Kenya continues to be a strong regional pillar, Ethiopia’s output in trade and manufacturing will eventually start crowding out Kenya’s exports.