How Solid Is Economic Growth in the East African Community?

IMF Working Papers, August 12, 2014

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Rapid economic growth in the East African Community during the past decade is examined to assess whether it is built on solid foundations.
Analysis uses a variety of newly-collected and existing data sources to assess:
- structural transformation of output and exports,
- indicators of the quality and sophistication of output and exports.
The move from agriculture to a wide range of other sectors "bodes well for continued growth," and there are "gradual improvements in quality."
However, "no clear winners on the production side seem to have emerged, to embed a durable comparative advantage in international markets."
These observations "may instill a note of caution against projecting rapid growth into the distant future."

Uses newly-collected and existing data sources to analyze:
- output structure,
- export structure,
- measures of quality and sophistication of products and exports.
Focuses on structural transformation from agriculture to a wider set of sectors and on export product diversification and export quality.

Structural diversification away from agriculture and improvements in quality are positive signs for continued growth.
Absence of clearly emerging production winners and durable comparative advantages suggests caution in extrapolating recent rapid growth far into the future.

Subjects: Agricultural sector, Economic growth, Economic sectors, Exports, International trade, Structural transformation, Transportation
Keywords: Agricultural sector, Burundi, EAC countries' economic growth performance, EAC economy, economic growth, export, export product diversification, export structure, Exports, exports product, Global, goods export category, growth rate, Kenya, product, Rwanda, Structural transformation, Sub-Saharan Africa, Tanzania, top ten export destination, Uganda, WP

IMF Working Paper No. 2014/150 — How Solid Is Economic Growth in the East African Community?