Published On : Tuesday, May 10 2016
Rwanda and Kenya are the only economies in the region that saw growth rates rise last year, as currency depreciation, falling commodity prices and high interest regimes hurt various sectors in the other economies.
Rwanda’s economy grew to 6.5 per cent last year up from 6 per cent the year before, while Kenya recorded a 5.6 per cent up from 5.3 per cent, buoyed by expansion in the agriculture, construction and real estate sectors.
READ: Kenya's economy grew 5.6pc in 2015
Uganda recorded the sharpest drop in growth, from 5.9 per cent in 2014 to 5.2 per cent growth last year, while Tanzania saw a 0.3 percentage point drop to 6.9 per cent — but it still recorded the highest growth within the region.
READ: Juba, Dar to bear brunt of steep drop in oil prices
Burundi, hit by political turmoil since its disputed elections a year ago, recorded negative growth. The country’s economy shrank by 7.2 per cent.
According to the World Bank, the region was one of the brightest spots for growth in sub-Saharan African last year.
“There were some bright spots where growth continued to be robust such as in Cote d’Ivoire, which saw a favourable policy environment and rising investment, as well as oil importers such as Kenya, Rwanda and Tanzania,” the World Bank said.
Rwanda’s economic growth was buoyed by construction, services, agriculture and manufacturing, but mining exports slowed. According to the International Monetary Fund, poor demand and prices for minerals, and low capital inflows pulled down the country’s growth last year.
In November, Rwanda’s Finance and Economic Planning Minister Claver Gatete said the services sector, which contributes 47 per cent of GDP, had grown significantly, adding that the country has increased its exports of coffee, horticultural products, tea and vegetables.
READ: Rwanda struggles to tame growing trade deficit
Kenya’s was supported by a stable macroeconomic environment and significantly improved performance in the agriculture, construction, finance and insurance and real estate sectors, according to Zachary Mwangi, the director general of the Kenya National Bureau of Statistics (KNBS).
Data from KNBS showed that agriculture, which contributes nearly a quarter of Kenya’s economic output, grew 5.6 per cent in 2015 from 3.5 per cent the previous year. Exports from tea, coffee, as well horticultural produce, however recorded mixed fortunes. Tea earnings rose to $1.22 billion while horticultural production increased by 8 per cent to 238.7 million tonnes, which saw its earnings rise to $1.01 billion.
Coffee earnings rose to $210 million, up from $200 million the previous year. The building and construction industry registered a growth of 13.6 per cent in 2015 compared with a 13.1 per cent in 2014.
According to Mr Mwangi, this growth was partly attributed to the ongoing standard gauge railway construction and road works by both national and county governments.