Africa-Press – Eritrea. ECONOMIES in the East Africa region are projected to rebound with a growth rate of three per cent in 2021, says a new report by a global audit and financial analysis giant.
Titled ‘Navigating New Realities,’ the report released yesterday by Deloitte analyses the economic impact of the COVID-19 pandemic on East African economies, surveying Tanzania, Kenya, Ethiopia, Uganda and Rwanda.
Commenting on the region’s macro-economic environment, the Deloitte East Africa financial advisory leader Gladys Makumi said that the firm expects East African economic activity to pick up in 2021 with a three per cent growth in comparison to 0.9 per cent in 2020.
“This will be mainly driven by private consumption and domestic demand. However, the recurrence of lockdowns, slow vaccine roll-out across the region, restriction in movements and budgetary pressures in some of the major economies will have a negative impact,” she stated
The COVID-19 pandemic has taken more than four million human lives and seen economic stimulus packages across global economies surpass $13trn, four times more than the response to the 2008 – 2009 financial crisis.
“Considered the black swan of 2020, the COVID-19 pandemic ravaged through economies both globally and at an East Africa level, with far reaching effects witnessed across several sectors. The pandemic is now considered part of the new normal, though navigating through this new reality is expected to be bumpy and slow with full recovery and rebound in 2021 still largely uncertain,” she asserted.
Tewodros Sisay, Deloitte East Africa financial advisory associate director noted that the past year has truly shown that the world is in a new reality. Despite the pandemic taking more than 150,000 lives in Africa and the continent’s economy contracting by 2.1 per cent, countries have largely remained resilient amidst the pandemic and continue to charter a new path towards recovery as of the third quarter of 2021.
Recovery will be driven by tourism, agriculture, and manufacturing sectors. Subsequently, it will also be driven by an uptick in investment activity in the private sector with long-term effects of foreign direct investment (FDI) diversification expected to take effect, notwithstanding the 9.6 per cent reduction in FDI inflows into the East African region in 2020, the report indicated.
This year’s publication provides high level insights into the continued impact of COVID-19 in East Africa and dives deeper into sectoral analysis, the analyst noted. “We have also incorporated feedback from our clients and readers and have included Rwanda in this year’s publication. The publication highlights the COVID-19 sector heat maps across the East Africa countries as well as provides an outlook of the expected performance in 2021,” he added.
