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Which EA state will top economic charts in post-coronavirus era?

Tuesday December 29 2020
Covid-19.

East African region is projected to record a high post-Covid economic recovery. PHOTO | FILE | NMG

By Charles Onyango-Obbo

A Monday story in The EastAfrican indicated the region is projected to record the highest post-Covid economic recovery in Africa.

East Africa is expected to post an average growth of 5.1 percent in 2021 against a continental average of 3.2 percent, Allianz SE Chief Economist Ludovic Subran said in a recent virtual presentation on “Vaccine economics, trade, China and growth in Africa.”

Kenya, Tanzania, Uganda and Rwanda will significantly rebound, he said, with Uganda and Rwanda topping the charts at 4.8 percent and 7 percent, respectively.

So, what will lead to the big rebound? A “confidence shock” triggered by the vaccination campaign, boosting consumption, investment, trade, and the resumption of tourism activity, he said.

All that, though, is still only the tip of the iceberg.

History tells us that Uganda and Rwanda, where they have succeeded, is due in large part to the fact that they mastered post-war reconstruction — Uganda after its many years of war that mostly ended in 1986 when President Yoweri Museveni and his ruling National Resistance Movement seized power, and in Rwanda in 1994 after the genocide against the Tutsi.

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Tanzania was nearly ruined by the combination of its war that ousted Ugandan military dictator Idi Amin in 1979, and wide-ranging support for southern African liberation. And in Kenya, former president Mwai Kibaki engineered a remarkable economic recovery from the ruins of Daniel arap Moi 24-year-rule from 2003.

The nature of the crises the countries faced varied, and of this group, only Uganda and Rwanda had extensive internal armed conflict that killed large numbers of people.

In common, though, their responses had similarities that are often missed. Though varying in degree and innovativeness, all these countries undertook free market reforms; opening up their economies; reforming their financial sectors; investing heavily in infrastructure; fidgeted with their education sectors; and made some smart moves in agriculture. They largely avoided the state-dominated model that Angola and Mozambique, for example, opted for.

Refugees, exiles, and the diaspora were also critical in their economic recovery. In the case of Uganda and Rwanda they returned, settling down to create a burst of production in regions with previous little activity.

In tandem, their vast relatively prosperous diasporas, either returned or invested their money at home. In Tanzania’s case the refugees left with the end of apartheid in southern Africa and the peace in Mozambique.

Kenya cashed in a democracy dividend, constitutional reform, a return to its attraction as a regional financial and economic hub, and the flourish of an entrepreneurial class freed from the predations of a parasitic corrupt regime after it was let loose on the market.

Rwanda and Uganda also undertook extensive security sector reform.

Kenya too did, although unlike Rwanda and Uganda, most of it was to bring it under democratic and civilian oversight. Uganda and Rwanda, however, then acted more geopolitically, leveraging their security forces for wider regional power politics, and harvesting the complex national security global capital that comes with it.

Obviously, many of these tools have been maxed out, but there are signs that some of this cast, especially Rwanda and Kenya, seem to still have a few tricks left up their sleeves.

Charles Onyango-Obbo is a journalist, writer and curator of the “Wall of Great Africans”. Twitter@cobbo3

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