Macroeconomic and Social Developments in Eastern Africa 2025

This report offers a timely and insightful examination of the key economic trends, social dynamics, and emerging challenges shaping Eastern Africa amidst a highly uncertain global context.
In the post-COVID-19 pandemic period since 2022, Eastern Africa has maintained relatively high economic growth, with an estimated GDP growth rate of 5.1% in 2024. However, high debt levels and external shocks have led to fiscal tightening and reduced government spending. There has been a concurrent increase in the share of multilateral financial assistance, as the IMF and World Bank have increased their influence over East African economies at a time of fiscal tightening and high debt levels. Despite the challenges, regional trade and remittances have remained resilient.
This report emphasizes the role of large and rapidly growing firms in driving economic integration and development, particularly within the framework of the African Continental Free Trade Area (AfCFTA). It examines the performance of Eastern Africa's largest companies, noting the prominence of sectors such as mining, telecommunications, utilities, transport, and agro-industry. Kenyan firms, especially in e-commerce, fintech, and agriculture, are especially prominent among the rapidly growing companies. Prioritizing the growth of larger firms is essential for advancing regional development and integration.
The report also reviews progress towards the Sustainable Development Goals (SDGs). Eastern Africa faces considerable challenges in achieving the SDGs, with regressions in areas like clean energy, decent work, sustainable cities, climate action, and life on land. Despite these challenges, there have been positive trends in terms of economic growth, poverty reduction, renewable energy, and digital innovation.
The report concludes that Eastern Africa has remained resilient despite the difficult international context. Going forward, the region will need to focus on reviving public sector investment, stabilizing currencies, managing debt levels, enhancing regional integration, and leveraging the resources of larger firms. Inclusive growth strategies and targeted social spending will also be crucial for long-term development.