I have never even set foot in Africa. I know little about the way their economies work, and my limited Geographical knowledge means I know shamefully little about the culture of the region, the history and even which countries are there. So, I did a little research before writing this article, and dove down the rabbit hole into a fascinating world of a culture so completely different to my own.
However, this article is about the economy. On the whole, African countries benefit from a wealth of natural resources, such as diamonds, with this often becoming a staple in their economic structures. Beyond that, East African countries are rapidly industrialising, with countries in the area enjoying some of the highest growth levels on the whole continent in the past decade. They face many issues, such as how to fight climate change, and how to fight the staggering levels of poverty that plague many of these countries.
The African Development Bank (AfDB) has done a report showing that despite the rest of the world’s economies struggling during the pandemic, East African nations economies have enjoyed a slightly better time of it. A lot of the tourist-based and oil-based economies in Africa have suffered greatly throughout the pandemic, but East African economies are largely based on commodities. In particular, the agricultural sectors and infrastructure spending plans have been cited as reasons for this, as they didn’t have to close whilst Africa fought the pandemic.
In fact, economic growth, although having dropped to 0.4% during the pandemic, is expected to rebound up to 4.1% this year, with that percentage likely to increase once again in 2022.
It is not all bells and whistles, the AfDB says that the pandemic has struck many individuals in the economy, with extreme poverty levels rising to 35%. That, alongside government corruption levels rising, means the post-Covid world will not be an easy one for the East African nations. There are also fears that their vaccination programme, which is in an earlier stage than ours in the United Kingdom, could be delayed, propelling these countries back into lockdowns and other economically harmful issues the virus has brought along. However, East Africa has proven successful in the past at dealing with economic crises, in 2014, their response to the oil crisis was widely considered to be successful, which bodes well for them being able to find solutions to the current difficulties.
Economists have begun coming up with suggestions for East Africa to once again create a period of growth. Most of them suggest a Keynesian approach of investment and high levels of public debt to try and help the countries out of their difficult times. Considering the issues they face and the fact that their economies were alternatively affected in comparison to Britain’s, this appears the most pragmatic solution. These reports seem, on the whole, positive, and these economies will, more likely than not, recover surprisingly well from the slump the world economy suffered last year.
Written by Adam Caudle
Research compiled by Kristina Njeru