The economic growth of the East African region is projected to rise to 5.7 percent in 2025, increasing from 5.1 percent in 2024, a sluggish climb owing to reduced international aid and conflict.

The report, which was jointly presented by the East African Business Council and RSM Eastern Africa consulting firm, attributed it to the growth in public infrastructure investments and in the services sector.

The RSM Eastern Africa & East African Business Council (EABC) Outlook 2025 report reveals that in 2024, agriculture, manufacturing and infrastructure investments performed well across the East African Community (EAC) partner states.

The report reveals that the economies of Kenya, Tanzania, Uganda, Rwanda and Burundi showed resilience despite global challenges, high inflation rates, the war in Ukraine, the 2024 floods, Israel Hamas conflict, and Donald Trump’s re-election among other negative factors.

The report was unveiled on Tuesday during the ‘CEO Roundtable Meeting on East African Integration and Economic Outlook 2025’ organised by the EABC in partnership with Kenya Private Sector Alliance (Kepsa), and the Kenya Association of Manufacturers (KAM).“The East Africa’s economic growth has been driven by public infrastructure investments. Globalisation is declining as countries turn inward and aid flows decrease. Governments need to provide necessary incentives and an enabling environment for the private sector to lead economic growth,” said Ashif Kassam, executive chairman, RSM Eastern Africa Consulting Ltd.“Infrastructure investments of $44 million in 2024 boosted intra-EAC trade by 13.4 percent to $74.03 billion. Investments are set to rise further in 2025.”The report analysed the performance of each EAC partner state based on a number of sectors including agriculture, infrastructure investments, manufacturing, agro-processing, services and tourism, among others.

The report reveals that in 2024, Kenya’s agriculture grew by 3.0 percent, contributing 22.4 percent to the Gross Domestic Product (GDP) and employing 40 percent of the population.

Read: Kenya’s special economic zones to attract more FDIsIn 2025, it is projected to grow by 3.5 percent, with GDP contribution at 21 percent and employment at 41 percent. Manufacturing grew by 3.2percent in 2024, contributing 9.2 percent to GDP and 456,000 jobs. In 2025, it is expected to grow by 3.5 percent, with GDP at 9.5 percent and jobs at 500,000.“Kenya’s economy showed resilience in 2024, with a GDP growth rate of 4.6 percent despite facing several challenges. This growth was driven by strong performances in agriculture, services and the tourism sector,” said Mr Kassam.“Kenya’s real GDP growth is projected to remain strong at 5.2 percent. Kenya’s share of tax to GDP is at 11.5percent, inflation is expected to go down to 6.5 percent and saving to GDP at 13.5percent.”Various projects in East Africa are poised to transform the region’s economic landscape.

Tanzania’s Bagamoyo Deepwater Port is expected to become a major hub for maritime trade, facilitating greater connectivity and economic growth.

Tanzania’s agriculture sector grew by 4.2 percent in 2024 contributing 28 percent to the GDP and employing 65 percent of the population.

Projections for 2025 indicate a growth of 4.5 percent with the sector’s contribution to GDP expected to rise to 29 percent and employment to 66 percent.

In Uganda, the agriculture sector contributed 24.1 percent to the GDP in 2024. However, growth in the sector remains steady at three percent due to government support in irrigations, mechanisation and agro-processing. Exports of coffee, fish, tea and maize remain strong.

In Burundi, agriculture remains the backbone contributing around 40 percent of the GDP. The sector is dominated by smallholder farming, with coffee and tea making up the largest exports.

Despite the growth, the private sector members drawn from all the eight EAC members, by 50 business leaders, raised concerns over high cost of doing business sustainability - particularly electricity and transport.

They also raised issues of climate change to access the European Union market, intellectual property rights to scale-up digital tech businesses, consolidating laws and enforcement agencies to reduce regulatory compliance burdens.“Tax budget proposals and consultations should involve and be harmonised with a wider range of private sector stakeholders at sectoral, national, and regional levels and combating illicit trade, including counterfeits and substandard goods,” said Mr Kassam.

On the global scene the return of Trump poses both risks and gains.“The return of Trump to the White House in 2024 has disrupted economic alliances. For Eastern Africa, with all its rich untapped valuable resources, this is the time to reinvent itself rather than retreat,” said Mr Kassim.“As the world grapples with the implications of America’s inward turn, Eastern Africa must make sense of this uncertainty. It is a make or break for the region,” he said."For businesses and investors, the path forward demands a proactive and informed approach of the region’s shifting dynamics.”“For the record, East Africa countries did well in the last two years, 2023 and 2024. But the economic indicators for this year paint a different picture. The war in DRC and also South Sudan is on and off because of the political turmoil facing the country now, we can’t project the growth,” said Akol.

Read: Kenya posts slowest Q3 economic growth since Covid pandemicMr. Akol also called for the liberalisation of air transport services, finalization of trade in services liberalization, and full implementation of EAC commitments by new Partner States.“Intra-EAC exports have grown from 17 percent of total exports in 2017 to 21 percent in 2023, reaching $6.3 billion in 2023, but the share of intra-EAC trade to total trade continues to stagnate at 15percent,” said Mr Adrian Njau, Ag EABC executive director.“Governments of EAC Partner States should fully implement commitments of the Common Market and Customs Union. The EAC’s trade has a potential of $1.9 billion under the AfCFTA market.”Ms. Miriam Bomett, head of policy, regulatory advocacy & legal operations at the Kenya Association of Manufacturers (KAM), called for the implementation of the CET, the reduction of production costs for manufacturing, and the enhancement of cross-border trade through regulatory reforms and efficiency improvements.

Ms Rita Kavashe, managing director of ISUZU East Africa, stated that sourcing inputs from across the region has facilitated the development of an integrated East African motor vehicle industry, fostering regional integration.

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