East Africa: Kenya to Report Slowest GDP Growth in 2020

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Global accounting and consulting firm Deloitte (Kenya) has stated that Kenya will be recording its worst growth performance in 2020.

The slow growth, at one percent from 5.7 percent will be the result of a Coronavirus outbreak which has disrupted the economy severely with a decline in tourism activity, export revenues, and a disruption in the supply chain.

Deloitte researchers say Kenya’s GDP growth averaged 5.4 percent in 2019 and had been projected to grow at about 5.7 percent in 2020 amid robust private consumption, higher credit growth, and rising public and private investment.

“Further, as the COVID-19 pandemic hampers revenue base collections, the negative outlook on Kenya’s financing risks becomes exposed,” they note.

Their report, ‘Economic Impact of the COVID-19 pandemic on East African economies’ focus on in Ethiopia, Kenya, Tanzania, and Uganda as well as various measures proposed by their governments to mitigate the impact upto 8 May 2020.

Key highlights 

In Ethiopia, the country is expected to grapple with high unemployment, and GDP growth has been revised to 3.2% from 6.2% in 2020. 

Similarly, the outlooks in Tanzania and Uganda show a similar trend with GDP growth being revised to 2% and 3.5% respectively (decline in 3.3% and 1.8% percentage points). 

Tanzania is showing waning demand for mineral exports considering global supply chain interruptions. 

The economy in Uganda is also faced with the disruption of supply chains and weakened global demand for goods.

Africa’s projected GDP growth of 3.2% for 2020 is now expected to fall to -0.8%. This is due to the enforced partial or total lockdown of economies brought on by the pandemic.

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Kenya’s cumulative total number of positive cases stands at 715.The number of fatalities at 36 and successful recoveries at 259 as of Tuesday (May 12).

Confirmed Covid-19 cases in Uganda are 126. Fifty-five recoveries with no death reported.

In Ethiopia, 194 cases of COVID-19 have been confirmed since the outbreak was first reported on March 13. A total of 95 patients have recovered, four have died.

Tanzania’s official cumulative Covid-19 cases stand at 509, recoveries at 183, while active cases are 305 with 21 fatalities.