<\/p>\n
The African Development Bank (AfDB) released the 2026 East Africa Economic Outlook and 2026 Kenya Country Focus Report in Nairobi earlier this week, setting out reforms needed to support growth, resilience and structural transformation.<\/p>\n
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The report found that regional growth accelerated from 4.3% in 2024 to an estimated 6.6% in 2025, supported by private consumption, stronger investment, improved agricultural output and growth in services.<\/p>\n
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Growth is expected to moderate to 5.9% in 2026 as higher energy prices, geopolitical tensions and tighter global financial conditions weigh on economic activity.<\/p>\n
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AfDB said East Africa must change how development is financed, with stronger domestic revenue mobilisation, deeper capital markets, better public financial management and greater private-sector participation needed over the next decade.<\/p>\n
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AfDB East Africa Regional Implementation Support Manager Eva Ruganzu said countries cannot build resilience in isolation. \u201cResilience cannot be achieved through isolation,\u201d Ruganzu said.<\/p>\n
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\u201cIt requires countries to strengthen their domestic capabilities, while also deepening regional cooperation, pooling opportunities, and mobilising capital at greater scale.\u201d<\/p>\n
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The report highlights varied opportunities across the region. Rwanda, Tanzania, Uganda and Ethiopia continue to record resilient growth, while Djibouti is building on logistics, Seychelles on tourism and South Sudan on renewed oil production. Somalia, Sudan, Burundi and Comoros continue to face structural and fiscal constraints.<\/p>\n
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Panellists at the launch said weak institutional frameworks remain a major constraint to transformational growth. Genesis Analytics East Africa Director Betty Maina called for stronger regional value chains and better coordination between public agencies.<\/p>\n
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\u201cWe need to grow a regional value chain mindset to achieve our greater potential,\u201d Maina said. \u201cDespite having regional ambitions to develop regional value chains, we compromise them through competition, and instead of collaborating, we compete, causing limitations and keeping markets small and fragmented.\u201d<\/p>\n
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AfDB recommends short-term reforms to strengthen tax administration, improve public spending efficiency and reduce illicit financial flows. Medium-term priorities include public-private partnerships, pension and diaspora capital, and stronger pipelines of bankable projects. Longer-term reforms include deeper financial integration and stronger local currency capital markets.<\/p>\n
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The Kenya Country Focus Report found that Kenya remains a regional hub for trade, finance, logistics and digital innovation, but faces an annual development financing need of about $14.2 billion and a projected financing gap of $12.5 billion by 2030.<\/p>\n
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Kenya National Treasury Public Debt Management Office Director General Raphael Otieno said limited fiscal space requires new financing models. \u201cThe region and Kenya face substantial financing requirements, particularly for infrastructure in areas such as energy and digital transformation, but we have seriously constrained fiscal space,\u201d Otieno said.<\/p>\n
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Otieno said Kenya\u2019s $38 billion National Infrastructure Fund, established in March 2026, is expected to reduce sovereign borrowing by mobilising private capital and proceeds from state asset sales for major infrastructure projects.<\/p>\n
<\/p>\n
–AfDB\/ChannelAfrica–<\/p>\n","protected":false},"featured_media":40605,"template":"","meta":{"_acf_changed":false},"news-type":[78,44],"class_list":["post-41219","news","type-news","status-publish","has-post-thumbnail","hentry","news-type-featured","news-type-finance","entry"],"acf":{"short_description":"East Africa remains Africa\u2019s fastest-growing region, but the region must close a $119 billion annual financing gap to sustain growth and create jobs.","published_date":"","news_description":"East Africa remains Africa\u2019s fastest-growing region, but the region must close a $119 billion annual financing gap to sustain growth and create jobs.","form_embed":"","author":"","image_caption":""},"_links":{"self":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/41219","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news"}],"about":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/types\/news"}],"version-history":[{"count":1,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/41219\/revisions"}],"predecessor-version":[{"id":41220,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/41219\/revisions\/41220"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media\/40605"}],"wp:attachment":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media?parent=41219"}],"wp:term":[{"taxonomy":"news-type","embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news-type?post=41219"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}