Angola and Ethiopia are set to overtake Kenya as sub-Saharan Africa’s third-largest economy, undermining the East African country’s power to attract investors drawn to a population with more money to spend.
Faster GDP growth in Angola and Ethiopia will push Kenya down to fifth in sub-Saharan Africa’s economic rankings, according to International Monetary Fund (IMF) forecasts, which see Nigeria as the continent’s largest economy.
According to the International Monetary Fund, Angola returned to growth coupled with rising oil prices, overtaking Kenya last year after the country, which is the continent’s second-largest oil producer after Nigeria, ended years of stagnation.
This year, Ethiopia is on the verge of ousting Kenya from fourth place as armed conflict in the country eases and ambitious economic reforms aimed at opening up one of Africa’s most closed and fastest-growing economies continue.
The International Monetary Fund forecasts that the economies of Ethiopia and Angola will grow 13.5% and 8.6% in dollar terms this year, respectively.
However, Kenya is expected to post slower growth of 2.4% over the period as the country grapples with the aftershocks of the Covid-19 pandemic, drought, electoral tensions and disruption to global supply chains due to the war between Russia and Ukraine is struggling.