The International Monetary Fund (IMF) forecasts that this year, despite Ethiopia extending its lead, Kenya’s GDP will surpass that of Angola in size.
According to the IMF’s most recent World Economic Outlook, the oil-producing country of Angola’s gross domestic product (GDP) will decline during the time, allowing Kenya, whose economy is predicted to increase by 5.3 percent, to pass it and move up to fourth place behind Ethiopia.
Ethiopia, however, is now anticipated to surpass both Angola and Kenya to become the third largest economy in sub-Saharan Africa, whereas the IMF had previously predicted that it would surpass Kenya to become Eastern Africa’s largest economy in its October 2022 forecast.
After the IMF updated its earlier projection for Ethiopia’s GDP in 2023, this occurred. The fight for the economic dominance of Eastern Africa’s region between Kenya and Ethiopia has essentially been a contest for the attraction of investments especially in the agriculture and manufacturing sectors.
So far, South Africa and Ethiopia have fared better than Kenya in attracting foreign investments eyeing a population that has more cash to spend. The IMF does not expect Kenya to stay longer at the third position with Angola projected to regain the position next year before Nairobi overtakes it again in 2027.
The global lender has, however, not revised its estimates for 2022, which showed that the west African nation had overtaken Nairobi to become the region’s third-largest economy. A return to growth linked to higher oil prices saw Angola overtake Kenya last year, according to the IMF’s projections in October last year. Angola lost this position to Kenya in 2020 following years of contraction due to a slump in oil prices.
Most forecasters have projected Ethiopia’s real GDP growth at above six percent, which, although higher than last year, is still significantly below the pre-Covid-19 growth rate of 9 percent registered in 2019, according to a report by the World Bank.