Ethiopia expected to topple Kenya as East Africa’s top economy this year

Ethiopia’s economy is expected to surpass Kenya’s economy this year due to its immense investment on infrastructure and huge government spending that has seen Ethiopia for the last ten years in the group of the world’s fastest economies reports the East African.


Ethiopia’s gross domestic product (GDP) is expected to grow to 69.21 billion dollars this year from 61.62 billion last year, giving it a slight edge over Kenya’s GDP of projected 69.17 billion dollars from 63.39 billion according to latest statics released by the International Monetary Fund (IMF).
The last five years have seen Ethiopia’s economy grow drastically; from a GDP of 8.23 billion dollars in 2000 against Kenya’s GDP of 14.1 billion dollars in the same year.

The horn of Africa nation intends to maintain the position of largest economy in East Africa as it improving as an investment destination.

Mega Public sector investment similar to Chinese model which elevated the Asian country to world’s second largest economy in two decades is the same strategy being witnessed in the African country.
“Public investments are expected to continue driving growth in the short and medium term with huge investments in infrastructure and the development of industrial parks, prioritised to ease bottlenecks to structural transformation, which will still have to take shape with industry playing a significant role in the economy,” the IMF report says.

Some of the huge projects Ethiopia has undertaken include the $5 billion Grand Renaissance Dam with a generation capacity of 6,000 megawatts, expected to earn the country $1 billion annually from electricity sales. In addition the country has invested in a railway linking its capital Addis Ababa to the Red Sea port city of Djibouti, fast-tracking the movement of goods and people across its vast territory.

According to the East African the IMF’s GDP forecasts are based on several assumptions such as that established policies of national authorities will be maintained and that the average price of oil will be $42.96 a barrel in 2016 and $50.64 a barrel in 2017 and will remain unchanged in real terms over the medium term.