Fragile but resilent, EA will post 3-5pc growth

The international market is still volatile. It could be very costly to countries to borrow funds.

My fear, though, is not so much of the cost of borrowing but the channelling of the proceeds from the bonds to the intended projects.

The countries involvement — Tanzania, Kenya and Uganda — should come up with measures to ensure the funds are used in the projects intended.

Will the projected recovery reduce unemployment and poverty levels in East Africa?

These two issues will still be critical and will have to be tackled this year and for some years to come. The recovery in tourism and remittances will be modest this year.

Therefore, human capital absorption in the labour market will be relatively low. Many countries in sub-Saharan Africa have limited social safety nets. Private consumption is projected to grow by 3.2 per cent, fuelled by higher incomes in export-oriented sectors.

What are the risks facing the East African economy?

The world economy could stagnate. This would undermine the recovery in external demand and would put pressure on East African commodity prices, undermining government revenues and possibly pushing debt to unsustainable levels.

In turn, this could force governments to implement procyclical fiscal cuts, increase taxation, or a combination of the two, with adverse implications for poverty, health, education and long-term growth prospects.

Tourism, remittances and private capital flows may also decline further.