Kenya’s economy is set to fall to fifth largest in the Sub-Saharan Africa region. According to an economic forecast by the International Monetary Fund (IMF), Angola will overtake Kenya to occupy the fourth position.
This comes after Kenya lost the third position to Ethiopia after years of dominance. According to the forecast by the IMF, Angola’s economy will overtake Kenya’s economy to stand at Sh. 15.3 trillion in year 2025.
The local economy on its part will expand to Sh. 15.08 trillion. However, this expansion will not be good enough to fend off the expanding economy of Angola. These projections indicate that in 2025, Angola will reclaim the position of fourth largest economy in Sub-Saharan Africa that it lost to Kenya in 2019.
Already, Kenya had lost the third position to Ethiopia. Alarmingly, Ethiopia’s economy was smaller than Kenya’s as recent as the year 2020. The forecast by the IMF comes amidst rising interests in Angola by major world powers including China and the United States.
For instance, China has over the recent past become the biggest buyer of Angola’s oil. AT the same time, Angola is set to make history as the only country that current US President Joe Biden visited on his official visit to the African continent since his election as US President in 2021.
According to the Organization of Petroleum Exporting Countries (OPEC), Angola is the second-largest oil producer in the whole of Africa after Nigeria. At the same time, Angola is ranked as the seventh biggest producer of rough diamonds by Kimberley Process.
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In January 2023, the IMF projected that Ethiopia would surpass Kenya as the third-largest economy in the region. Angola also received a similar positive outlook from the IMF. The projection by the IMF showed that Ethiopia would grow by 13.5 per cent while Angola would grow by 8.6 per cent. Kenya on the other hand was expected to grow at a rate of just 2.4 per cent.
The relegation of Kenya from the third position to the anticipated fifth position has a direct impact, especially on the flow of foreign direct investment. For instance, as at January 2023, South Africa and Ethiopia were performing way better than Kenya in the attraction of foreign direct investment.
