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Covid - 19 dents EAC  economic growth

Covid - 19 dents EAC economic growth

THE Covid-19 pandemic has taken a toll on East African Community’s economic prospects, following revelations of a shrinking regional economic growth.

The bloc’s economic growth is said to have averaged 2.3 per cent in 2020 compared to an average of 5.4 per cent in 2019.

“The weak regional economic growth in 2020 was mainly due to disruption of businesses and economic activities in the region, following the outbreak of the Covid -19 pandemic for which, the first case was reported in the EAC region in mid-March 2020,” observed Adam Mohamed, the Chairperson of the EAC Council of Ministers in his budgetary speech on Monday evening.

“Containment measures put in place to limit its spread, including travel restrictions and lockdowns, led to a contraction of GDP in all the EAC Partner States,” added Mr Mohamed in the speech read on his behalf by the Chief Administrative Secretary, Ken Obura.

Mr Mohamed, who is Kenya’s Minister for EAC, informed the East African Legislative Assembly (EALA) that the most affected sectors included services and affiliated sectors, and those that are dependent on global supply chains.

The EAC Chairperson of Council of Ministers however exuded confidence that the region was likely to recover in 2021, reflecting a resumption of global economic activity with the easing of containment measures and sustained implementation of growth-supporting measures.

Mr Mohamed further gave a scorecard on the performance of the regional economy, shedding light on the Covid-19 pandemic, which he cautioned may not go away soon.

“The reality is that Covid -19 will be with us for a much longer time than earlier anticipated. The impact of the pandemic on EAC partner states’ economies has been devastating, to say the least. Manufacturing and agriculture sectors have been affected due to disruption in global supply chains and a fall in global demand for key export goods such as horticulture produce,” he explained.

According to Mr Mohamed, exports of goods shrank in all partner states, in the past year.

He further informed the EALA lawmakers that exports from Kenya and Uganda had contracted by 7.6 per cent and 1.7 per cent respectively, between March to June 2020, while during the same period, imports of intermediate goods contracted by 25 per cent, 11.3 per cent and 22.9 per cent in Kenya, Uganda and Tanzania respectively.

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Author: EDWARD QORRO

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