According to the latest forecast by the International Monetary Fund (IMF), Kenya is set to become the fourth-largest economy in sub-Saharan Africa this year, trailing behind South Africa, Nigeria, and Ethiopia, pushing Angola to a lower position. The IMF predicts that Kenya will maintain this ranking until the end of 2029.
In 2022, Kenya’s GDP stood at approximately $108.9 billion (Ksh15.14 trillion at current exchange rates), slightly down from $113.7 billion (Ksh13.37 trillion at the 2022 exchange rate). Meanwhile, Ethiopia’s economy, once smaller than Kenya’s in 2020, has surged ahead. By 2023, Ethiopia’s GDP reached an estimated $159.74 billion (Sh21.165 trillion), widening its economic lead over Kenya.
Ethiopia’s economy is projected to surpass Nigeria’s into second-place position for the next three years, despite concerns about the accuracy of its GDP figures. The country recently emerged from a devastating two-year civil war and has defaulted on some debt obligations.
In 2023, Ethiopia recorded the fastest GDP growth in sub-Saharan Africa at 7.2%, while Kenya’s growth was more modest at 5.5%, impacted by drought and global financial market conditions due to the Ukraine conflict. Kenya is expected to release its official 2023 GDP figures soon.
Despite its economic challenges, Ethiopia’s GDP is forecast to remain higher than Kenya’s. Some experts question the IMF’s projections, especially regarding Ethiopia’s GDP calculations.
Using official exchange rates, the IMF estimates Ethiopia’s 2023 GDP at around $160 billion, compared to Kenya’s $109 billion. However, adjusting for a more realistic exchange rate, Ethiopia’s GDP could be closer to $90 billion, making Kenya’s economy relatively larger than previously thought.
The IMF defends its World Economic Outlook data, stating it’s based on information collected during their missions to member countries.
Kenya’s economic outlook remains promising, while Ethiopia grapples with economic challenges, including defaulting on a $33 million Eurobond payment and seeking debt restructuring with the G20 Common Framework.
Tanzania ranks as the third-largest economy in East Africa with a 2023 GDP of $79.44 billion, followed by the DRC ($67.3 billion), and Uganda ($51.8 billion). Rwanda and Burundi had GDPs estimated at $14.02 billion and $4.2 billion, respectively.