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April 27.2025
2 Minutes Read

Kenya's Economic Ascent: Surpassing Ethiopia in East Africa

Kenya Overtakes Ethiopia in East Africa's Economy symbolic graphic illustration.

Kenya Set to Lead East Africa's Economic Growth: A New Dawn?

Kenya is poised to surpass Ethiopia as the largest economy in East Africa in 2025, according to recent projections from the International Monetary Fund (IMF). This shift reflects a broader narrative unfolding in the region, with Kenya's GDP expected to hit $132 billion, eclipsing Ethiopia's estimated $117 billion. But what does this mean for stakeholders in the region's economy?

The Impact of Currency Devaluation in Ethiopia

The tipping point in this transition follows Ethiopia's significant currency devaluation in July 2024, which saw the birr drop by 55%. Though this move aimed to stabilize external accounts and secure a much-needed $3.4 billion from the IMF, it led to rising inflation and increased import costs. As a nation that heavily depended on public infrastructure and agriculture, this currency adjustment exposes Ethiopia to more significant risks amid ongoing debt restructuring and post-conflict recovery.

Kenya's Economic Resilience: A Lesson in Diversity

In contrast, Kenya's economy has showcased resilience through diversification, particularly in services, manufacturing, and regional trade. An impressive 21% appreciation of the Kenyan shilling in 2024 highlights the nation’s fiscal stability and its advanced financial systems, which effectively buffer fiscal shocks. Engendering investor confidence has allowed Kenya to attract significant foreign investments, particularly in fintech and logistics.

Lessons for Regional Stability and Growth

The divergence in economic performance between Kenya and Ethiopia underscores essential considerations for both countries. For Kenya, the challenge going forward will be balancing needed fiscal reforms with political stability. Ethiopia, on the other hand, needs focused structural reforms and debt resolution strategies to regain its economic footing and re-attract investors.

Future Trends: Navigating Global Economic Uncertainty

As both nations advance, they must navigate a landscape marked by global economic uncertainties, including fluctuating demand in international markets and potential impacts from rising U.S. tariffs. Policymakers in both nations should intensify efforts to bolster trade diplomacy and invest in innovation to sustain growth.

In conclusion, as Kenya steps forward to claim the title of East Africa's largest economy, it should do so with caution, strategically leveraging its advantages while addressing internal challenges. For Ethiopia, focusing on foundational reforms will be critical in transforming the economic landscape.

Stay informed on these developments and more by engaging with trending topics around Africa breaking news and African economy news. Understanding these shifts can empower decision-makers and investors alike to navigate the complex dynamics at play.

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Why Internet Shutdowns Are Thriving in Africa: Uncovering the Trends

Update Unpacking Africa's Rapid Increase in Internet Shutdowns As many as 193 internet shutdowns were recorded in Africa from 2016 to 2024, with an alarming surge of these incidents escalating during politically sensitive times, such as elections and protests. A recent book, co-edited by Felicia Anthonio and Tony Roberts, provides a comprehensive analysis of the motivations and implications behind this increasing trend, underscoring the use of digital blackouts as a tactic for suppressing dissent across the continent. Understanding Internet Shutdowns and Their Consequences Internet shutdowns are intentional disruptions of connectivity, often executed by state authorities in collaboration with internet service providers. These shutdowns are not just an infringement on civil liberties; they represent a substantial breach of human rights as they inhibit free expression, access to information, and participation in democratic processes. From Uganda to Zimbabwe, governments are increasingly normalizing these practices, not only as tools of political control but as instruments in times of conflict. Strategic Timing: Shutdowns as Political Tactics The research presented in the newly released book highlights how shutdowns are strategically enforced during crucial moments—particularly around elections or public demonstrations. In Senegal, for example, five shutdowns were implemented in a three-year period, radically altering citizens' access to essential online services such as education and healthcare. Similar patterns were evident in Ethiopia and Zimbabwe, where internet access was cut to stifle political opposition and curb negative media coverage. The Rising Trend: A Global Context 2024 has exemplified a record year for internet shutdowns, with 296 incidents documented globally, marking a notable international trend of governments employing digital blackouts, particularly in Africa. This reflects a broader strategy to control narratives and suppress information flow, further exacerbated by ongoing conflicts within the region, as highlighted by Access Now's report. The Role of International Law and Accountability According to international human rights law, internet shutdowns are deemed illegal, unnecessary, and disproportionate. The growing use of these tactics by regimes across Africa poses significant questions concerning accountability and the responsibilities of telecommunications companies. As these organizations comply with government orders, they inadvertently become complicit in the violation of individual rights. This dynamic raises urgent calls for a cohesive global response to ensure that access to information and freedom of expression are maintained. Future Implications for Africa's Digital Landscape The implications of these shutdowns are profound, not just for governance and free speech, but for the future of the African digital economy. As economies become more dependent on digital infrastructures, sustained blackouts could have dire consequences for business, education, and social connectivity. Policymakers must emphasize robust limitations on the use of shutdowns moving forward, ensuring adherence to international human rights practices. The continued rise in internet shutdowns in Africa poses serious implications for democratic practices and citizen rights. To empower African nations, it's crucial for all stakeholders—governments, civil society, and technology providers—to advocate for an open, secure internet. The future of Africa's socio-economic development hinges heavily on how well these digital rights are protected.

Why JKIA Modernisation and a New Airport Will Reshape Kenya's Economy

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Rwanda's Road Drainage Crisis: Environmental and Economic Impacts Unveiled

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