Consumer spending and investments will help lift EAC’s economic growth
The East African countries economy is expected to be driven by both consumer spending and investments as more firms from the services sector continue to pour in while foreign direct investments in the telecom industry, mining and oil sector as well as manufacturing sector is on the rise on the back of the region’s improving competitiveness despite its high cost of power and doing business. Regional growth will be lubricated propelled by consumer and investments and with that we will grow strongly. Both consumption and investments will be on a parallel track in supporting the individual country domestic economy’s growth and overall it will be consumption led economy because the improved economy of East African countries will power more spending power for the majority of estimated 137 million population. In fact, had it not for the high costs of power, researchers have been claiming that the regional economies should be growing between 8 to 15 percent annually. The manufacturing sector has been performing well but others have been disappointing.
An analyst who works for McKinsey global, a consultant told me that regional manufacturing and services sectors expansion are rather broad-based where he noted several investments going into mining industry in booming oil and gas sectors, rail and shipping, medical and cosmetic products, agriculture, and finance sectors among plenty others. East African countries are seeing a shift taking place and into an investment led economies with respectable and growing foreign direct investments inflows into the mining sectors and that is expected to set a long term vision for the mining sectors and help sustain the growth. EAC secretariat based in northern Tanzania city of Arusha is expected to undertake policy interventions through the crafting of various roadmaps in the manufacturing sector to identify the gaps in the value chain and where domestic and foreign investors can come in.The region’s improving competitiveness and its standing in Africa will make investors come as East African countries of Kenya, Uganda and Tanzania have some of the top notch labor force, competitive and investor friendly labor wage rates, better economic fundamentals and incentives and region’s policy of improving governance as a key investment driver.