East Africa Economic Report

GERD: The largest hydro Dam in Africa After decades of bad news, Ethiopia, like the proverbial Phoenix is emerging from its ashes, shedding off its poorest of the poor image. The nation, the former by-word for poor governance, misery, and death, has stirred to life and is now trotting to become the leader in Africa. Her GDP growth rate is the fastest in Africa at 8.5 percent. And it is not in GDP that she is the leader. Ethiopia also leads in aviation and hydroelectric generation. She is the first country in sub-Saharan Africa to complete a standard gauge railway, albeit of lower robustness compared to the Northern Corridor Line in neighbouring Kenya; she also is the first in Light Railway. It is also the first country to end 20 years of hostility with its neighbor in one week. Africa had better brace for Ethiopian dominance! The country is beginning to reap the benefits of its “daring” investment programme. We say “daring” because of the colossal amounts involved and the hu...

Menengai Geothermal Station, Kenya  Investment in infrastructure projects, particularly power and Energy, in East Africa has turned into a stampede. In 2017, five mega-projects worth $10.7 billion were under construction. Ethiopia led the pack with two hydro projects worth $6.9 billion. It was followed by Uganda whose Karuma hydro dam cost $1.6 billion. Tanzania came third with Mtwara Gas project worth US$1.3 billion. Kenya did not have a mega project.  However, Kenya boasted of a 23 infrastructure projects including energy which are worth less than a billion dollars. Ethiopia and Kenya lead in the number of projects under construction. According to the business consultancy Firm, Delloite, in 2017 the two commanded 43 projects with, Kenya leading with 23 projects and Ethiopia with 20 projects. However, Ethiopia led in terms of the dollar value of the projects. This is not surprising for Ethiopia is investing heavily in Railways and Hydro dam projects that are natura...

  Ethiopian Railways Electric  SGR train   The Rivalry between Ethiopia and Kenya in international athletics is also being played in regional economics. The countries are now the dominant economic powerhouses in East Africa. And they keep see-sawing regarding the leader. One moment Ethiopia leads the next year, Kenya leads. As in international athletics, the rivalry makes for economic good news in the region. The two countries with a combined population of more than 140 million control 64 percent of the regions GDP estimated at $251.54 billion in 2017 and they are the main drivers of robust GDP growth in the region.  Kenya’s GDP $81.2 billion at the end of 2017 following the revision of economic data for 2017 from US$75 billion to US$ 81.2 billion. Ethiopia’s GDP was $80.6 billion in 2017. This means that as at the end of 2017, Kenya’s economy was larger than Ethiopia’s by $600 million.  Both economies are one and a half times larger than Tanzania’s G...