By Benon Ojiambo, KAMPALA Uganda
A study by Deloitte has revealed that the East African region growth is expected to rebound from the doldrums and shoot to 3% this year.
This will be an
improvement from the lethargic rate of 0.9% the region posted last year due to
the effects of COVID-19.
The economic growth
will be mainly driven by private consumption and domestic demand.
The report titled
'the Economic Impact of the Covid-19 pandemic
on East African economies', covered Kenya, Ethiopia, Tanzania,
Uganda, and Rwanda under the theme 'Navigating
New Realities'.
However, Deloitte
East Africa Financial Advisory Leader, Gladys Makumi noted that the recurrence
of lockdowns, slow vaccine roll-out across the region, restriction in
movements, and budgetary pressures in some of the major economies will
negatively impact the growth.
Tewodros Sisay,
Deloitte East Africa Financial Advisory Associate Director said in a statement
that despite Africa’s economy contracting by 2.1%, countries have largely
remained resilient amidst the pandemic and continue to chatter a new path
towards recovery.
“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 diversification expected to
take effect, Sisay said.
Notwithstanding,
foreign direct investments inflows into the East African region contracted by
9.6% in 2020.
As Uganda was
emerging from the ruins of the first wave of coronavirus, the country was hit
by a deadly second wave prompting another lockdown. Projections have put
Uganda’s economic growth rate at 3.3%
The World Bank has
projected growth rates of 4.6% and 6.4% in the 2022 and 2023 financial years as
domestic demand conditions improve and global recovery continues as COVID-19
vaccines are rolled out.
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