HUSTLE MAG MARCH 2020 FINAL

Hustle briefs
TOURISM
Growing tourist numbers, economic diversity steady Kenya
GDP growth
Most East African countries
have a positive economic
outlook, largely due to
the positive performance
brought about by economic
diversification. This is according to the
Institute of Chartered Accountants in
England and Wales’ (ICAEW) latest report,
Economic Update: Africa Q1 2020. The
accountancy body provides GDP growth
forecasts for various regions, including
East Africa which is set to grow by 6%,
West and Central Africa at 3.1%, Franc
Zone at 4.9%, and Southern Africa at 1.3%.
The report, commissioned by ICAEW and
produced by Oxford Economics, highlights
how East Africa remains the fastest-growing
sub-region, and the economic outlook
remains favourable, underpinned by
vigorous domestic demand and public
investments in infrastructure.
Kenya’s tourism industry was highlighted
as a key player in the country’s efforts
to diversify its economy away from a dependence
on agriculture as a key foreign
exchange earner. Kenya’s medium-term
tourism prospects remain robust, despite
the corona virus outbreak currently
being witnessed globally, supported by
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HUSTLE EAST AFRICA
improvements in infrastructure, better air
connectivity and easing visa regulations
around Africa and the rest of the world.
Michael Armstrong, ICAEW’s Regional
Director for the Middle East, Africa and
South Asia, said: “Kenya’s economic
diversification strategies are increasingly
buffering its economy from global shocks.
More African countries, including Kenya,
are prioritising the promotion of tourism
as part of this plan. Ongoing investment
in infrastructure projects, resilient exports
and the associated benefits from regional
economic integration in the subregion will
reinforce growth projections.”
The report goes on to highlight how the
economic outlook in Kenya is moderately
positive. GDP growth is projected at 5.5%
in 2020 amid robust private consumption,
higher credit growth, and rising public
and private investment. In addition,
rapid urbanization and further regional
integration will likely continue to open up
investment opportunities.
“The East Africa regions has maintained
its status as the continent’s growth
hotspot in the first quarter of 2020. The
region’s output, which has slightly decelerated
to 6% in 2020 is being kept stable
by the fact that the region boasts some of
the fastest growing economies globally,”
the report stated.
The sluggish performance of the
Nigerian economy continues to weigh on
West and Central Africa’s prospects, with
regional growth seen rising only marginally
to 3.1% in 2020, while North Africa’s
growth is projected to pick up more
strongly, rising from 3.1% in 2019 to 3.7%
in 2020. Tunisia, in particular, faced significant
challenges, with growth estimated at
a mere 1.3% in 2019. Aside from a marked
slowdown in agricultural growth, frequent
protests and weaker external demand
contributed to a slump in industrial activity.
This was, however, partly offset by a
strong rebound in tourist arrivals.
Regional powerhouses South Africa
and Angola continue to weigh heavily on
Southern Africa’s prospects: the region’s
growth remains sluggish at 1.3% in 2020,
with risks firmly stacked to the downside.
Power outages are taking a toll on the
South African economy, and fiscal pressures
mean the country could well lose its
investment-grade credit rating. Angola’s
real GDP, meanwhile, looks to have contracted
for a fourth straight year in 2019.