Kenya is on track to surpass Ethiopia as East Africa’s largest economy, buoyed by robust growth in key sectors and strategic investments.
According to the International Monetary Fund (IMF), Ethiopia’s gross domestic product (GDP) reached approximately $78 billion in 2023, overtaking Kenya’s GDP of around $72 billion at that time. This shift was attributed to Ethiopia’s significant public spending on infrastructure and strong domestic demand.
However, recent projections indicate that Kenya’s economy is gaining momentum. The IMF forecasts Kenya’s GDP to grow at a steady pace, driven by advancements in renewable energy, manufacturing, and its strategic position as a regional trade hub.
Kenya’s digital economy is also set to contribute significantly, with expectations to add Sh662 billion to the GDP by 2028. This growth is underpinned by sound fiscal and monetary policies, positioning Kenya as a leader in economic transformation.
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While Ethiopia has benefited from substantial foreign investments, particularly from China, and has implemented economic reforms to attract more, Kenya’s diversified economy and focus on innovation provide a competitive edge.
As both nations navigate post-pandemic recovery and global economic challenges, Kenya’s strategic initiatives and sectoral investments may well see it reclaim the top spot in East Africa’s economic landscape.
