Akinwumi Adesina, president of African Development Bank.

The African Development Bank (AfDB) has urged East African countries to accelerate structural transformation through digitalization, industrialization, economic diversification and consolidation of peace, and security in order to accelerate recovery from the Covid-19 pandemic.

In a report titled ‘Debt Dynamics in East Africa: The Path to Post-Covid Recovery,’ published on October 28, 2021, AfDB said COVID-19 has had diverse impacts across the region.

The report says Covid-19 containment measures and global supply and demand disruptions hit businesses and livelihoods hard and increased poverty, while political fragility in some countries and limited economic diversification in others were significant impediments to growth.

It adds that countries that are highly dependent on tourism have been hit hardest while those with a more diversified sectors such as Kenya experienced fewer adverse impacts.

For commodity exporters like Tanzania, they have been slightly more resilient due to rising prices for commodities particularly.

The report reviews the socio-economic performance of 13 countries in the region including; Uganda, Burundi, Comoros, Djibouti, Eritrea, Ethiopia, Kenya, Rwanda, Seychelles, Somalia, South Sudan, Sudan and Tanzania.

“A mix of policy interventions is needed to accelerate East Africa’s economic recovery and build post-Covid-19 resilience,” said Nnenna Nwabufo, the AfDB’s Director General for East Africa.

Nwabufo said some of these interventions include scaling up vaccinations, designing and implementing economic stimulus packages and stabilizing public debt by dealing with debt related to state enterprises.

The report notes that much as East Africa is the only region that avoided a recession in 2020, thanks to better performance in agriculture, sustained public spending on large infrastructure projects and increased economic integration, political fragility in some countries and limited economic diversification in others were major hurdles to growth.

But, the report also notes how East Africa is experiencing a progressive change in the composition of GDP, from predominantly agriculture to services. Still, the transition to higher value-added economic activities—which signals structural transformation has been slow. COVID-19 has also had diverse impacts across the region.

Marcellin Ndong Ntah, a lead economist at AfDB, warned that the risks to the region’s positive outlook remain substantial due to the uncertainties surrounding the longevity and severity of the pandemic, the slow uptake of vaccines, rising global oil prices, the slow pace of structural transformation, conflicts and civil unrest, and weather-related shocks.