EAC market projected to grow by 5.7% in 2025

By Phyllis KONRAD

East Africa’s economic growth is projected to rise to 5.7% in 2025 an increasing from 5.1% in 2024, according to projections by the East African Integration and Economic Outlook 2025.

The report further projects that Kenya’s real GDP growth will remain strong at 5.2%. Kenya’s share of tax to GDP is at 11.5%, inflation is expected to go down to 6.5%, and saving to GDP at 13.5%.

This comes even as figures shows that the Intra-EAC exports have grown from 17% of total exports in 2017 to 21% in 2023, reaching USD 6.3 billion in 2023, but the share of intra-EAC trade to total trade continues to stagnate at 15%.”

EAC Partner States are now urged to fully implement commitments of the Common Market and Customs Union, if the region is to meet its trade potential of $1.9 billion under the AfCFTA market.

Governments, according to the report’s drafters should eliminate persistent Non-Tariff Barriers (NTBs), ensure uniform application of the EAC Common External Tariff (CET), operationalize the EAC Trade Remedies Committee, harmonize domestic taxes, and remove discriminatory taxes, while the liberalization of air transport services, finalization of trade in services liberalization, and full implementation of EAC commitments by new Partner States should also be prioritized.

The RSM Eastern Africa & EABC Outlook 2025 reveals that in 2024, Kenya’s agriculture grew by 3.0%, contributing 22.4% to GDP and employing 40% of the population.

In 2025, it is projected to grow by 3.5%, with GDP contribution at 21% and employment at 41%. Manufacturing grew by 3.2% in 2024, contributing 9.2% to GDP and 456,000 jobs. In 2025, it is expected to grow by 3.5%, with GDP at 9.5% and jobs at 500,000.

Infrastructure investments of $44 million in 2024 boosted intra-EAC trade by 13.4% to $74.03 billion. Investments are set to rise further in 2025.