Kenya’s economy powers ahead to overtake Angola, as Ethiopia stretches its lead

The size of Kenya’s economy will overtake that of Angola, Africa’s leading oil producer, this year even as Ethiopia stretches its lead, according to the projection presented in the International Monetary Fund’s (IMF) latest World Economic Outlook.

The IMF projects Angola’s gross domestic product (GDP) to shrink during the period, hence catapulting Kenya, whose economy is expected to grow by 5.3%, to the fourth spot behind Ethiopia. While the IMF projected in its October 2022 outlook that Ethiopia would soon overtake Kenya to become Eastern Africa’s largest economy, the Washington-based lender has now revised its earlier forecast on Ethiopia’s GDP in 2023 from $126 billion to $156.1 billion and expects the country to overtake both Angola and Kenya to become the third largest economy in sub-Saharan Africa. The region comprises 46 of the continent’s 54 countries, excluding giants such as Morocco and Egypt.

According to the IMF’s latest Outlook, Nigeria remains the largest economy in the region with a GDP, in current prices, of $506.6 billion followed by South Africa ($399 billion), and Ethiopia ($156.1 billion). The Washington-based institution has now also revised slightly upwards the size of Kenya’s economy from it October 2022 projection of $117.6 billion to $118.1 billion in the April 2023 outlook. 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. For example, both countries are major producers of coffee, tea and flowers; they are also keen to shore up their value-addition by rebooting their textile and apparel sectors.