East Africa continues to lead the continent in economic growth rates, yet faces persistent challenges in poverty reduction and food security, according to a new report published Sunday by African Narratives for Strategic Studies. While economic growth shows improvement and inflation rates are relatively declining, the region struggles to translate this growth into tangible improvements for its most vulnerable populations. The report highlights the significant gap between recorded growth rates and poverty reduction across East African countries. Economic growth often fails to benefit the poorest segments of society, necessitating action to ensure sustainable growth, improve productive capacities, and address food insecurity. Investment in regional infrastructure, including roads, railways, and ports, along with streamlined customs procedures, are suggested to reduce trade costs and enhance trade exchanges within the region.
East Africa in the Global Context
The African Development Bank Group's 2024 annual report projected that East Africa will lead the continent's economic recovery, with a growth rate increase of 3.4%. This follows a continent-wide slowdown in average real GDP growth from 4.1% in 2022 to 3.1% in 2023, attributed to rising food and energy prices, declining export performance, climate change, and political instability. Globally, growth is predicted to decline from 3.6% in 2022 to 3.2% in 2024, rising slightly to 3.3% in 2025.
Despite experiencing the highest inflation rate in Africa in 2023, with Sudan at 245.3%, some East African countries like Somalia have seen reductions. However, the cost of living remains high across the region. While global inflation is predicted to decrease to 3.5% by the end of 2025, inflationary pressures continue in several nations.
East Africa is the largest recipient of official development assistance allocated to agriculture, and has also seen substantial growth in microfinance fund receipts, particularly in 2020.
Economic Challenges in East African Countries
Despite abundant natural resources, internal and external factors hinder the translation of resource revenues into improved living standards. East African countries face a complex web of challenges, including climate change, political instability, and limited intra-regional trade, which remains below 15% despite the East African Community's (EAC) integration goals.
Rapid population growth, estimated to reach 647 million by 2050 from 332 million in 2023, places further pressure on resources and services. Inflation, though declining, remains a concern, impacting the economies of East African countries. While global food prices stabilised in mid-2024, some East African nations saw increases in basic commodity prices due to reduced production, conflict disruptions, and currency depreciation.
Multidimensional poverty, encompassing deprivations in education, health, and living standards, affects 1.1 billion people globally, with nearly half concentrated in Sub-Saharan Africa. Social protection systems in Africa remain fragmented, with formal systems covering only 17.4% of the population. East Africa lags behind other regions in social protection coverage, with only 11% of the population receiving cash transfers.
External debt poses a significant challenge, with many African countries facing high borrowing costs. Kenya's debt-to-GDP ratio nearly doubled between 2010 and 2019, while Somalia secured substantial debt relief under the Heavily Indebted Poor Countries (HIPC) initiative.
Armed conflicts and political instability exacerbate economic woes, particularly in Sudan, where the ongoing conflict has caused a sharp economic contraction and impacted neighbouring countries. The conflict in Ethiopia has resulted in substantial economic losses and affected vital sectors.
Recurring climate events, including droughts and floods, severely impact East Africa, particularly its agriculture-dependent population. Climate change is projected to reduce staple crop production, requiring significant climate financing to address adaptation and mitigation needs.
Hunger and Food Insecurity
Despite previous progress in poverty reduction, crises like the COVID-19 pandemic have reversed gains, increasing poverty rates across Africa. Hunger and food insecurity are worsening, with millions facing acute food insecurity, particularly in East Africa, where drought, floods, and conflicts contribute to the crisis. The war in Ukraine has also disrupted food availability and prices, further impacting food security in the region.
The report suggests several priorities to address these challenges, including increased investment in agriculture, support for small farmers, financial stability reforms, price stability-focused monetary policies, accelerated economic integration, and regional tension reduction.
African Narratives for Strategic Studies is a Pan-African non-profit policy research organisation dedicated to reshaping global understanding of Africa and addressing its challenges. Focusing on democracy, security, energy, economic development, and human rights, the organisation amplifies African voices to foster informed discourse and promote sustainable progress.
