Is East Africa Taking off Economically ?

tomar

Ad Honoris
Jan 2011
12,781
#1
GDP in 2005

Sudan $26.5 bio
Kenya $18.7 bio
Ethiopia $ 12.4

GDP in 2016

Sudan $95.5 bio (multiplied by about 3.5 in 12 years or about 11% yearly growth)
Kenya $70.5 bio (multiplied by about 4 in 12 years or about 12% yearly growth)
Ethiopia $72.3 bio (multiplied by almost 6 in 12 yearsor about 16% yearly growth)
 
#4
GDP in 2005

Sudan $26.5 bio
Kenya $18.7 bio
Ethiopia $ 12.4

GDP in 2016

Sudan $95.5 bio (multiplied by about 3.5 in 12 years or about 11% yearly growth)
Kenya $70.5 bio (multiplied by about 4 in 12 years or about 12% yearly growth)
Ethiopia $72.3 bio (multiplied by almost 6 in 12 yearsor about 16% yearly growth)
Yes and no..

Here's what your missing (I'll leave out Sudan for now since that's a more messy picture with the war and all.)

Population in 2005
Kenya: 35 million
Ethiopia : 74 million

Population in 2016
Kenya: 46.5 Million (growth of 32%)
Ethiopia : 100 million ( growth of 35%)

So a lot of that growth is actually just a population boom , in practical terms the per capita increased about 20% ish for both over the decade which is still decent but in the same context China's nominal GDP per capita doubled in the same period (aka a 100% increase) while in PPP terms the disparity is even larger.

The big change in the last decade of course has been China, who's really investing heavily in Africa and changed it's trading landscape completely . ( it went from an insignificant trading partner to by farrrrrrrr the biggest trading partner in the region during this decade.)

In 2005 Trade with Kenya China totaled around 200 million USD (which is paltry. ) today it's well over 1500 million USD.

There is however obviously two sides to the coin , the affordable Chinese import has really helped in many ways ( no matter how bad you think Chinese products might be, if you can't afford the alternative and went without your almost certainly worse off. ) the problem is that these two East African states aren't actually heavily blessed with natural resources (especially relative to population size.) and they have very little to export back to China.

The trade deficit is a significant risk going forward.


( as you can see, Kenya's import has soared mostly due to China but it's export has been stagnant .. )

On the plus side the Chinese have heavily invested in these places with clear aims of improving their infrastructure / connectivity and there's a real aim of building an industrial base there going forward.







The railways replacing nearly defunct colonial era railway built a century ago is a pretty symbolic sign of the times.

( And the railway building is really just getting started. this is the plan , only the Mombassa to Nairobi part is complete so far .)

There is the hope that the connectivity improvement and much more affordable access to basic equipment can start fundamentally shifting productivity in the region .

Nairobi , Kenya's capital has also become a hub of international (and Chinese ) media outlets and Chinese venture in general.

( CGTN Africa , the African wing of China's government news agency, has the largest staff of international outlets in Africa and is based in Nairobi, with about 100 staff of mostly Kenyans. )

So there's hope on the horizon, as long as we can avoid massive political instability sabotaging the effort ... (never an easy ask in Africa. )
 
Jun 2012
7,067
Malaysia
#6
Yes and no..

Here's what your missing (I'll leave out Sudan for now since that's a more messy picture with the war and all.)

Population in 2005
Kenya: 35 million
Ethiopia : 74 million

Population in 2016
Kenya: 46.5 Million (growth of 32%)
Ethiopia : 100 million ( growth of 35%)

So a lot of that growth is actually just a population boom , in practical terms the per capita increased about 20% ish for both over the decade which is still decent but in the same context China's nominal GDP per capita doubled in the same period (aka a 100% increase) while in PPP terms the disparity is even larger
I wud consider that kind of sustained growth respectable, in fact quite solid, if not fantastic. Not everybody can grow & keep growing as fast as China.
 
#7
I wud consider that kind of sustained growth respectable, in fact quite solid, if not fantastic. Not everybody can grow & keep growing as fast as China.
Yeah but how sustainable is it is a big question, with big population boom your infrastructure will be put under more stress, if you don't build fast enough to compensate sooner or later political stability would drop out from the bottom ( a common theme in Africa. ) this year Kenya had a pretty serious drought and the election situation came within inches of turning into a full blown civil war.

The real danger is that jobs are often not increasing as fast as the population, in the last decade Kenya's unemployment rate has hovered consistently around 11-12% and many more people are underemployed.





( here's a 3 part documentary on the Kenya railway project, if you listen carefully to some of the detail of the story some signs are quite worrisome, such as a girl who got an engineer job... but it was really her first job at like age 28, and the man who also had an engineering degree but was driving cabs for decades until he finally got a job on the rail etc...)
 
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VHS

Ad Honorem
Dec 2015
4,283
Brassicaland
#8
Yeah but how sustainable is it is a big question, with big population boom your infrastructure will be put under more stress, if you don't build fast enough to compensate sooner or later political stability would drop out from the bottom ( a common theme in Africa. ) this year Kenya had a pretty serious drought and the election situation came within inches of turning into a full blown civil war.

The real danger is that jobs are often not increasing as fast as the population, in the last decade Kenya's unemployment rate has hovered consistently around 11-12% and many more people are underemployed.





( here's a 3 part documentary on the Kenya railway project, if you listen carefully to some of the detail of the story some signs are quite worrisome, such as a girl who got an engineer job... but it was really her first job at like age 28, and the man who also had an engineering degree but was driving cabs for decades until he finally got a job on the rail etc...)
I read somewhere that China was able to sustain such growth because of the massive demands of the developed world; currently, the demands are not as great as they were during the tremendous Chinese growth.
With a less hospitable land and a larger population, Ethiopia should be even more troubling than Kenya.
 
Sep 2009
1,256
#9
I read somewhere that China was able to sustain such growth because of the massive demands of the developed world; currently, the demands are not as great as they were during the tremendous Chinese growth.
With a less hospitable land and a larger population, Ethiopia should be even more troubling than Kenya.
Yeah but Ethiopia's government is also more authoritarian which at least for the upside potential of development is probably a plus, meaning they can push through stuff much more quickly .

I am reasonably optimistic on the region overall though, at least from an economics POV, the danger is and has always been that the political situation is sabotaged . But I think we've finally reached the point where most of the region has stabilized politically. and the African Union etc are a useful tool for at least keeping the worst scenario from getting out of hand.
 
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VHS

Ad Honorem
Dec 2015
4,283
Brassicaland
#10
Yeah but Ethiopia's government is also more authoritarian which at least for the upside potential of development is probably a plus, meaning they can push through stuff much more quickly .

I am reasonably optimistic on the region overall though, at least from an economics POV, the danger is and has always been that the political situation is sabotaged . But I think we've finally reached the point where most of the region has stabilized politically. and the African Union etc are a useful tool for at least keeping the worst scenario from getting out of hand.
Someone gave the example of Malawi already; when it was authoritarian, it was relatively orderly and prospering; after democracy, it is quite chaotic and stagnating (if not regressing).
 

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