East Africa’s economy projected to grow to 5.7pc in 2025, EABC-RSM report reveals
Ashif Kassam, Executive Chairman of RSM Eastern Africa. Speaking during CEO round table meting in Nairobi. Photo by Patrick Moshi
East Africa’s economy is projected to expand to 5.7 percent in 2025, up from 5.1 percent in 2024, according to the EABC-RSM Eastern Africa Economic Outlook 2025. The report was unveiled at the CEO Roundtable Meeting on East African Integration and Economic Outlook 2025, organized by the East African Business Council (EABC) in collaboration with the Kenya Private Sector Alliance (KEPSA), the Kenya Association of Manufacturers (KAM), and RSM Eastern Africa.
Ashif Kassam, Executive Chairman of RSM Eastern Africa, noted that globalization is declining as nations adopt inward-looking policies and reduce aid flows. However, East Africa’s economic growth remains strong, fueled by public infrastructure investments. He urged governments to provide an enabling environment for the private sector to take the lead in driving economic expansion.
“Kenya’s real GDP growth is projected to remain strong at 5.2 percent. The country’s tax-to-GDP ratio stands at 11.5 percent, while inflation is expected to decline to 6.5 percent. Savings as a percentage of GDP are projected at 13.5 percent,” he stated.
According to Adrian Njau, Acting Executive Director of the EABC, intra-EAC exports grew from 17 percent of total exports in 2017 to 21 percent in 2023, reaching USD 6.3 billion. However, intra-EAC trade still accounts for only 15 percent of the region’s total trade.
East Africa’s economy projected to grow to 5.7pc in 2025, EABC-RSM report reveals
He urged EAC Partner States to fully implement the Common Market and Customs Union commitments to unlock the region’s full trade potential. He also emphasized the $1.9 billion trade opportunity that the EAC bloc can tap into under the African Continental Free Trade Area (AfCFTA).
Hon. John Lual Akol Akol, Chairperson of EABC, pointed out that despite the EAC’s status as Africa’s most integrated economic bloc, persistent Non-Tariff Barriers (NTBs), lack of uniform application of the Common External Tariff (CET), and discriminatory domestic taxes continue to hinder trade.
He urged EAC governments to operationalize the Trade Remedies Committee, harmonize domestic taxes, liberalize air transport, and fully implement trade and investment commitments by new Partner States.
Hon. Sankok Ole David, Member of the East African Legislative Assembly (EALA), urged the private sector to actively champion policy reforms at the EAC Heads of State and Ministerial Council levels to remove trade and investment barriers.
The roundtable discussions featured 50 business leaders, who raised key concerns, including: High business costs, particularly electricity and transport, climate change impacts on access to the EU market
Adrian Njau, Acting Executive Director of the EABC
At the CEO Roundtable, 50 business leaders highlighted key challenges affecting regional trade and investment, including high business costs, especially in electricity and transport, climate change impacts on EU market access, intellectual property rights, regulatory compliance burdens, tax policy consultations, and illicit trade control.
Miriam Bomett, Head of Policy, Regulatory Advocacy & Legal Operations at KAM, emphasized the importance of implementing the Common External Tariff (CET) and lowering manufacturing costs.
Rita Kavashe, MBS, Managing Director of ISUZU East Africa, highlighted the East African motor vehicle industry’s growth due to regional input sourcing. She urged the EAC to capitalize on AfCFTA’s 1.3 billion consumer market.
Ashif Kassam warned against protectionist policies, such as raising excise duties and import taxes, which create tax disparities across the region. He emphasized the need to streamline Rules of Origin and avoid double taxation to enhance intra-EAC trade
According to the EABC-RSM Eastern Africa Outlook 2025, agriculture grew 3.0 percent in 2024, contributing 22.4 percent to GDP and employing 40 percent of the population. It is projected to grow 3.5 percent in 2025, contributing 21 percent to GDP and employing 41 percent.
Manufacturing grew 3.2 percent in 2024, contributing 9.2 percent to GDP and creating 456,000 jobs. In 2025, it is expected to expand by 3.5 percent, contributing 9.5 percent to GDP and supporting 500,000 jobs.
Infrastructure investments worth $44 million in 2024 boosted intra-EAC trade by 13.4 percent to $74.03 billion. More investments are expected in 2025.
The CEO Roundtable highlighted East Africa’s resilience and growth potential, while also underscoring the challenges hindering intra-regional trade. Business leaders, policymakers, and industry stakeholders called for urgent reforms to enhance trade efficiency, reduce business costs, and unlock AfCFTA opportunities.
