IMF: Angola and Ethiopia Economies to Overtake Kenya

The International Monetary Fund (IMF) projects that Kenya will slide from the third to the fifth largest economy in Sub-Saharan Africa in 2023.

Faster GDP Growth

The increase in GDP growth in Angola and Ethiopia means that Kenya will get pushed to number 5 is Sub-Saharan Africa’s economic ranking.

Angola’s rise is attributed to the higher oil prices. The country is the second largest producer of oil after Nigeria and with the few years of recession; they are projected to bounce back.

On the other hand, Ethiopia is set to replace Kenya in the fourth position. This is due to the armed conflict easing that threatened to plunge the country into the abyss.

The Economies of Ethiopia and Angola will grow by 13.5% and 8.6% respectively. This is in dollar terms.

Kenya’s Slow Growth

Kenya will experience a slow growth of just 2.4% according to the IMF. This is because of the ripple effects of the General Elections, the Covid-19 Pandemic, drought and the effects of the Ukraine-Russia war. They have all had an impact on the supply chain in the country and the effects have been felt hard.

Effects on Kenya’s Economy

The movement of Kenya to position five will have an effect on foreign direct investment (FDI). Foreign investors have mainly targeted South Africa and Ethiopia because they have more cash to spend.

Multinationals that produce and provide cars, food, phones, clothes, financial and entertainment services, etc are all looking for the African markets.

The IMF indicates that Kenya’s GDP will cross $117.6 billion this year. The following are some of the projected GDP’s of some African countries.

Sub-Saharan Africa GDP ($BN)

The Sub-Saharan countries account for 46 out of the 54 African states.

While Kenya is struggling to keep multinational manufacturers, it has turned out to be a hotbed of technology companies and financial service companies.