East Africa: EA Projected to Record Highest Post-Covid Economic Recovery in Africa

East Africa is projected to be the hotspot of economic recovery in sub-Saharan Africa with the region expected to post an average growth of 5.1 percent in 2021 against a continental average of 3.2 percent.

Allianz SE chief economist Ludovic Subran said economic growth in Kenya, Tanzania, Uganda and Rwanda will significantly rebound after a tough year due to the ravaging effects of Covid-19.

Uganda — which is projected to post negative growth in 2020 — and Rwanda are forecast to post the highest post-Covid recovery, with GDP growth projected at 4.8 percent and seven percent respectively.

A “confidence shock” triggered by the vaccination campaign, boosting consumption, investment and trade will be the key drivers for the rebound, with growth in sub-Saharan Africa set to rebound by 3.2 percent in 2021 after the continent went through the worst recession in its recent history recording a -4.2 percent GDP decline.

“In 2021, the recovery will be essentially driven by stronger domestic and world demand and trade, higher commodity prices and resuming tourism activity,” said Subran in a recent virtual presentation titled Vaccine economics, trade, China and growth in Africa. The projected economic recovery comes as Allianz prepares to expand its presence in the East African insurance market by building on a solid foundation in Kenya following the acquisition of the majority of shares in Jubilee Insurance, which operates in Kenya, Tanzania, Uganda, Mauritius and Burundi.

Jubilee Holdings shareholders approved the acquisition that will see Allianz acquire controlling stakes of between 51 percent and 66 percent in Jubilee’s general insurance units in Kenya, Uganda, Tanzania and its short-term general and medical insurance business in Burundi and Mauritius at a cost of $100 million.