AN OVERVIEW OF THE EAST AFRICA ECONOMY
Over the past decade, the average economic growth in the East African countries was consistently strong, and is seen to continue to perform strongly. Kenya, Tanzania, Uganda and Rwanda specially, have managed to keep their growth high despite global economic conditions.
According to the African Economic Outlook (AEO), East Africa recorded the fastest growth on the continent in 2015 (5.6%) and is expected to grow 6.7% in 2016. This is due to each country’s investment in positive institutional reforms and policies. This makes the region the most attractive on the continent compared to others.
EAST AFRICA’S OIL AND GAS INDUSTRY
Amid the East Africa region’s foreseen continued economic growth, special focus is placed on its energy sector.
Since the discovery of enormous oil reserves in Uganda in 2006, major oil finds in Mozambique, Tanzania, Kenya, Sudan and Ethiopia have caught the attention of some of the largest independent global oil and gas exploration companies. Over the last six years, international oil and gas majors from UK, China and India have entered the investment market; however, most investments are currently coming from the private sector.
These discoveries have sparked optimism among business experts and investors that East Africa will become a world oil hub. These are also “expected to drive billions of dollars in annual investments in the coming years as the world seeks to tap more fossil fuels.” (PriceWaterhouseCoopers-PWC, September 2014)
EAST AFRICA’S PETROCHEMICALS INDUSTRY
Following the increasing exploration and production activities in the East African countries and the continued surge in downstream demand, the petrochemicals industry’s long-term prospects are bright, with the sector likely to become a major economic engine in the coming years.
The increased demand for refined products in the region has spurred the need to fill the supply gap and improve its refining infrastructure. An approximate US$ 60 billion is projected to be spent on infrastructure developments, focusing on the northern East Africa trade corridor, where now current infrastructure is focused on the southern corridor. This boost is seen to add 3% to Kenya’s nominal GDP by 2020.