I am trying to think through the politics, development prospects and investment climate across East Africa between 2020-25. Beyond relatively narrow and superficial reports (IMF and EIU projections, National Development Plans) I see hardly any analysis. I would appreciate views and comments on both opportunities and challenges.
- Continued growth although slower than the last decade – still around 2-3% above population growth.
- Lots of unused or under-ulitised potential, some of which would not take much to unlock (power, infrastructure, etc).
- Initial social change – incl. growing urban middle class. Technology opens opportunities and helps drive change and accountability.
- Regional integration. While slow and marred by the same challenges faced by all regional projects, the EAC continues to make progress and open opportunities.
- Big Men, elections, politics weak institutions. Ugandan (2021), Rwandan (2024), Kenyan 2024) and Tanzanian elections during that period all getting closer to a crunch point for a variety of reasons. Apart from Rwanda – who have their own political dynamics – it’s all about increased pressure on old elite power and patronage structures – but arguably with challenges being much harder (due to earlier populist and short-term moves), especially as states and institutions continue to struggle.
- Inequality, social tensions and corruption. All inter-related and reinforced by population growth/land pressure/jobs/urbanisation challenges. Impacts on growth, stability and investment (and migration)
- Investors getting increasing realistic: many will continue to see the potential, but the easy days will be over and some of the costs of the cheap borrowing and lack of earlier reforms (which should happen now) will have to be repaid.
- Leaders in crisis or with sufficient levels of greed continue to use the nastiest tricks in the book to gain support – often around ethnicity and religion. Worryingly, the social acceptability and the faultlines remain very near the surface. Even irregular or scattered eruptions (like Rwanda in 1994 or Kenya in 2008) will have growth and social implications for years or even decades after.
- Security: At the domestic level this is closely related to the point above. In addition, East Africa is surrounded by a number of volatile neighbours. Some of those conflicts could severely undermine otherwise positive prospects.
These are just initial thoughts. Comments, ideas and views would be highly appreciated.