The East African region is one of the fastest growing economic zones in the world. Despite the fluctuation in international oil prices and the trade war between the US and China, the region continues to expand. The expansion is primarily driven by a strong performance from the leading economies; Kenya and Ethiopia.
The Institute of Chartered Accountants in England and Wales (ICAEW) projects that the region will grow at 6.1 per cent in 2019 compared to a global growth rate of 3.3 per cent. Kenya is expected to grow at 5.5 per cent as per the UK based organization. ICAEW credits the solid economic growth to a dynamic banking industry. The two largest banks in Kenya have subsidiaries throughout the East African region. The lenders have also digitized their businesses, therefore, leading to improved performance.
Due to development in the Banking sector, big national brands are merging to improve their performance in the competitive market. Big names such as KCB Group and National Bank, and NIC Bank and CBA Group are set to merge their operations before the end of the year.
“As a global trade war rages, East African economies have minimal fears of contagion from lower commodity prices. Their diversified economies will be best placed to weather the storm caused by the instability of oil prices. This, in addition to a well regulated, mainly private banking sector, are key to financing the economies,” ICAEW’S Regional Director for Middle East, Africa, and South Asia Michael Armstrong notes.