By Business Insider Reporter
As global economic uncertainty continues to cast a long shadow over growth prospects worldwide, East Africa is charting a remarkably resilient path forward.
Meeting recently in Mombasa for the 28th session of the Monetary Affairs Committee (MAC), Central Bank governors from across the East African Community (EAC), reported encouraging economic performance in 2024 and a strong outlook for 2025, formidable global headwinds notwithstanding.
Held on May 9 and chaired by Dr. Kamau Thugge, Governor of the Central Bank of Kenya, the high-level meeting drew participants from all seven EAC central banks, including newcomers Somalia and the Democratic Republic of Congo, who attended for the first time since joining the bloc.
Navigating global headwinds
The discussions unfolded against a backdrop of persistent global shocks – from heightened trade tensions and geopolitical risks to the slow unwinding of global inflation and the growing economic toll of climate change.
Yet, the region’s economy appears to be defying the odds.
“Despite external shocks, the EAC region’s economic performance in 2024 remained relatively resilient,” the committee noted in its communiqué.
Some member states recorded robust growth, driven by strong showings in agriculture, mining, oil and services sectors.
Real GDP across the region is projected to grow by 5.8% in 2025, outpacing both global and Sub-Saharan Africa averages.
This growth is expected to be underpinned by sustained strength in the agriculture and services sectors, bolstered by government policies and relative macroeconomic stability.
Inflation eases, but risks linger
A standout development has been the moderation of inflation. The regional average dropped to 9.0% in 2024 from 11.2% the previous year.
The improvement reflects tighter monetary policy, favorable weather improving food supply, and falling global commodity prices. Still, risks remain.
Climate-related disruptions and further global economic shocks could jeopardise the positive trajectory.
“Policymakers must remain vigilant,” warned one participant, noting that while inflation is expected to continue falling in 2025, external pressures can quickly reverse gains.
Progress on monetary integration
Beyond the macroeconomic figures, the MAC emphasised solid progress on the long-term vision for deeper integration through the East African Monetary Union (EAMU), now targeted for 2031.
Efforts to harmonise monetary policies, financial regulation, payment systems and risk frameworks have gained momentum.
In particular, the increasing use of the regional cross-border payments platform – the East African Payment System (EAPS) – and growing attention to climate-related financial risks were cited as major steps forward.
Financial sector stability holds
The region’s banking and financial sector also remains stable, supported by sufficient capital and liquidity.
However, the committee flagged concerns around slowing credit growth to the private sector, heightened cybersecurity threats and anti-money laundering compliance gaps.
Despite these concerns, the overall sentiment remains upbeat.
The Governors pledged to strengthen coordination, accelerate reforms, and support the seamless integration of Somalia and DRC into the bloc’s monetary architecture.
Collective resilience
The meeting also reinforced the EAC’s collective commitment to navigating global shocks with unified, strategic responses.
With a shared vision of economic transformation and financial stability, East Africa appears poised to not just withstand global economic tremors – but to thrive through them.
