East Africa Economic Report

 T hese questions will be robustly answered come the end of this month when Tanzania re-bases her GDP accounting period to 2007. Tanzania will re-base her GDP accounting year to 2007 from 2001. The re-base will rope in new sectors and is expected announce a new larger GDP. Economists estimate that Tanzania's GDP  is between 20 and 25 per cent larger than current estimates.  According to Daily News , at the end of 2013, Tanzania’s GDP stood at US$33.26 billion. Economists therefore estimate the GDP to have been anywhere between US$39.5 billion and $42 billion by the end of 2013. This will be confirmed at the end of this month when a new base year and new GDP are announced. Re-basing of the national account series (which includes the GDP) is the process of replacing an old base year with a new and more recent base year. The base year provides the reference point to which future values of the GDP are compared. Re-basing is meant to reflect recent develo...

THE FAST PACED NEWS  of oil discovery -after -discovery is making Kenya the hottest oil scene in Africa. And investors are trooping in. Not even the specter of a spillover of Islamic extremism from Somalia can dampen the atmosphere in Kenya, where commercial oil production is expected to begin in 2016 . When it comes to new oil and gas frontiers, today it's all about Africa. And more specifically, it's all about the eastern coast, with Kenya the clear darling--not just because it's outpacing neighboring Uganda by leaps and bounds, but also because despite some political instability hiccups and the threat of militant al-Shabaab, it's still one of the safest venues in the region. Six of the last 10 biggest finds have been in Africa, where—all told--there are some 130 billion barrels of crude oil waiting to be tapped by more than 500 companies, according to a  recent report  by PricewaterhouseCoopers. Topping this list are Kenya's Anza and South Lokichar ...

  KENYA is now a middle-income country.   Its GDP is US$55.2 billion, 25 percent higher than the previous estimate of US$44.1 billion, says the national statistics office. The Office carried out a rebasing of the GDP accounting period from 2001 to 2009. The exercise established that the Kenya economy was larger than office data since 2006. Further, the rebase established, the economy more than doubled in the eight-year period to December 2013, rising from US$25 billion in 2006 to $55.2 billion in 2013- a 214 percent increase.   The previous estimates indicated that the economy grew by 196 percent over the same period from US$22.5 billion to US$44.1 billion.   Consequently, the rebasing found that GDP per capita has risen to US$1246, catapulting the country into a middle-income economy. The World’s bank entry into the middle-income economy is US$1035, meaning that Kenya has just passed the threshold.   Although t he findings of the rebasing vary f...

THREE YEARS AGO, South Sudan, then the world's youngest country, was born. It was a nation full of hope and whose prospects were bright. It had functioning oil fields which pumped 375,000 barrels per day, she also enjoyed the good will of the world. Everything was going for her. Investors trooped into the country seeking for opportunities. Soon, South Sudan was receiving proposals for such mega project as the US$3 billion Juba-Lamu oil pipeline.  All those prospects evaporated In December last year when a civil war broke out. The civil war pitted the government of President Salva Kiir against Rebels led by Riek Machar, his former vice president. Oil wells have been damaged while the meagre revenue from the little oil available is being squandered on war. A nation that sits on Sub-Saharan Africa's third biggest reserves of crude is now a beggar nation staring at a potential famine. Oil Output has declined to 165,000 bpd from 375,000 bpd before the war broke. With ...

A REPORT published by the Standard Bank of South Africa last month is dishonest.   The report , Understanding the African Middle Class should be renamed Distorting the African middle class. It proposes that, nearly two decades of economic growth in Africa has had little effect on poverty reduction.   This is the antithesis of the “Africa rising narrative,” whose thesis is that robust economic growth in the continent over the last two decades has reduced poverty and widened the middle income class. The Africa rising is an accepted narrative world- wide.  The Understanding ….Africa report  states that, of the approximately 110 million households studied across 11 countries, 94 million (or 86 per cent) of them were located in the low-income category, suggesting poverty levels are as much as two times the figures shown in official records. It defines Low-income people as those spending less than $5,500 in a year or $15 per day while the lower middle class s...

KENYA  is now the leader in geothermal power generation in Africa. Her capacity now stands at 400 MW and will  rise to 680 MW by the end of this year when KenGen, the state owned power generator commissions all 280 MW from its Ol karia wells.  Such an increase will stamp further Kenya's position as the runaway leader in geothermal electricity generation in Africa. Since the new capacity will be used to retire the expensive thermal capacity, the cost of electricity is expected to decline by up to 47 per cent before the end of this year.  This has raised expectations of a general price decrease come 2015. Already, the price of electricity is down 9 per cent on last month's prices  following the commissioning of 140Mw geothermal power in July. The decline is expected to pick momentum after the commissioning of another 280MW of geothermal power later this month. This will increase the supply of geothermal power to 680MW from 260MW just two months ago. Of th...

KENYA HAS AWARDED the first of several tenders for the development of coal-fired power stations in the country. The Lamu coal-fired project was awarded to a consortium led by the Oman based Gulf Energy LLC and Centum investment, a local investment firm. The project will produce 960MW of coal-generated power on 25 years power purchase agreement. Apart from being the first coal-fired power generator in Kenya, the project is also the first major independent power producer in the country.  It is thus a curtain raiser as far as PPP in power generation is concerned. It will increase the supply of electricity by almost 50per cent.  As of now, the country produces 1668MW a majority of it is generated by Kengen, the largest generating company in Kenya.  KenGen will add another 280MW to the national grid later this month thus raising the total capacity to 1948 MW. The Lamu project will add 960MW which is 49.3 percent of the capacity at the end of September 2014. Th...