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IMF project Ethiopia, and Angola to overtake Kenya as the third-largest economy 

IMF project Ethiopia, and Angola economies to overtake Kenya as the third-largest in sub-Saharan Africa.

Angola and Ethiopia are projected to overtake Kenya as the third-largest economies in sub-Saharan Africa, eroding Kenya’s ability to attract investors drawn by a populace with more disposable income.

According to forecasts by the International Monetary Fund (IMF), which ranked Nigeria as the continent’s largest economy, faster GDP growth in Angola and Ethiopia will push Kenya down to number five in sub-Saharan Africa’s economic rankings.

Angola, the continent’s second-largest oil producer after Nigeria, surpassed Kenya last year as a result of a recovery in GDP tied to rising oil prices, according to the IMF.

Due to a settling of the country’s armed conflict and the continuation of the ambitious economic reform push intended to open up one of Africa’s fastest-growing but most closed economies, Ethiopia is likely to displace Kenya from position four this year.

The IMF projects that the economies of Ethiopia and Angola will grow by 13.5% and 8.6%, respectively, this year.

Kenya, meanwhile, is expected to grow at a slower rate in the review period—2.4 percent—as the nation struggles with the Covid-19 pandemic’s aftereffects, a drought, election-related anxiety, and the interruption of global supply lines caused by the Russia-Ukraine war.

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Sub-Saharan Africa accounts for 46 of the continent’s 54 countries, excluding giants like Morocco and Egypt.

Kenya’s drop to position 5 will make it more difficult for it to compete for foreign direct investment (FDI), which is essential for reducing the continent’s rising youth unemployment.

So far, South Africa and Ethiopia have done better than Kenya at luring foreign capital interested in a populace with more disposable income.

The IMF projects Kenya’s GDP to hit $117.6 billion this year, behind Nigeria ($574 billion), South Africa ($422 billion), Angola ($135 billion), and Ethiopia ($126.2 billion).

Oil-rich Angola will reclaim its third position, which it lost to Kenya in 2020 following years of contraction due to a slump in oil prices.

Angola is the continent’s second-largest oil producer after Nigeria, according to OPEC, while Kimberley Process data ranks it as the world’s seventh-biggest producer of rough diamonds.

After five years of recession, Angola’s GDP increased by 0.7 percent in 2021, according to the World Bank.

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