Tanzania’s economy has been tipped to record the highest growth this year out of those of the other East African Community countries.
The country’s growth will be spurred by the services and construction sectors, and increasing global demand for gold.
Two new surveys — by the World Bank and investment firm PineBridge — show that while Tanzania’s economy was currently the strongest, the EAC bloc’s economic expansion this year will largely depend on the outcome of Kenya’s upcoming General Election on March 4.
PineBridge analysts said Tanzania’s economy showed resilience to shocks in 2012 and is expected to remain buoyant, with its GDP projected to grow at seven per cent.
The Kenyan and Ugandan economies are projected to grow at 6.5 per cent and 5.5 per cent respectively. Rwanda will grow at six per cent while Burundi is expected to grow at 4.5 per cent.
According to the World Bank’s latest assessment, Kenya’s economy has the potential to achieve a five per cent growth rate this year should the elections be free and fair and the results undisputed.
“Peaceful elections in Kenya will guarantee safe and uninterrupted passage of goods, services and people within the EAC. Regional economies can achieve an average growth rate of six per cent if there is political stability and if conducive macro economic conditions prevail,” said Edward Gitahi, an analyst at PineBridge.
Kenya’s economic growth is among the lowest in East Africa, behind that of Uganda, Tanzania and Rwanda all who have GDP growth rates of above five per cent, according to data from the IMF.