Sylvia Chahonyo, general manager at East Africa, GCR Ratings, chaired an Invest Africa webinar entitled ‘East Africa Outlook 2021’ to discuss the region’s experience over the last year, and its prospects moving forward
The panellists shared their insights on the current and future state of the East African economy. (Image source: Invest Africa) Despite Covid-related disruptions, East Africa has retained its position as one of the fastest growing regions on the continent and with the African Continental Free Trade Area (AfCFTA) commencing on 1 January, 2021, the region holds the potential for accelerating its development even further.
James Mworia, group chief executive officer of Centum Investment Company, outlined the positive signs that underpin his belief that the East African region is in a promising position for future economic growth. He noted that when Covid-19 struck in March last year demand across all sectors initially declined, but this was sharply followed by demand expansion in Q2 and Q3. By Q4, in some sectors, revenues were actually higher than the same quarter in 2019 suggesting the disruption was caused by restrictions on movement rather than permanent behaviour. With the virus in decline, foreign tourism, travel, education and technology have all started to pick back up and this is indicative that the pandemic has caused a short-term, rather than long-term, disturbance.
Political disruption
Mworia suggested that typically in the region there is a noticeable decline in business activity immediately before and after elections due to uncertainty. With many countries in the region scheduled to go to the polls soon, he would have expected to see this trend come into effect, but so far this has not been the case.
Using Uganda as an example, Mworia commented, “Towards the end of 2020, business was actually improving despite elections in January. This suggests Covid-19 had a bigger impact on the economy than electoral uncertainty. Now people want the elected people to move on fairly and swiftly and most people are more concerned about the impact.”
Nik Arnold, managing director for East Africa, Garda World, echoed these sentiments, he said, “Uganda has been severely impacted due to Covid-19 restrictions. Now, there is a real appetite for businesses to get up and running quickly. The general sentiment is positive to have little disruptions over elections.”
Less political disruption is certainly vital for the oil and gas sector as Total draws ever closer to making its final investment decision (FID) […]
