Kenya Becomes Third-Largest Economy is Sub-Saharan Africa

Kenya is now the third-largest economy in sub-Saharan Africa behind Nigeria and South Africa in dollar terms.

Kenya, previously ranked at position four, toppled Angola to jump to third place, according to fresh data released on Friday by International Monetary Fund (IMF).

Since 2016, Angola’s economy has been on a descending trend due to a decline in oil output, and its currency (Kwanza) was devalued last year while the Kenyan shilling remained steady, Bloomberg reports.

Further, Angola’s gross domestic product (GDP) is expected to shrink by 1.4 percent in 2020 as a result of the Covid-19 pandemic and restrictions imposed by the government to combat the spread of the virus.

On the other hand, Kenya’s GDP is projected to grow by one percent in the period under review, the IMF report shows.

IMF noted that Angola’s parliament recently approved a package of revenue and expenditure measures to combat Covid-19 and reduce its negative impact on the economy. This saw the health sector allocated an additional $40 million, humanitarian aid and donations were exempted from tax, and delays on filing taxes for selected imports were granted.

Kenya on its part set aside an extra $400 million for health expenditure and funds for expediting payments of pending bills to maintain cash flow for businesses during the pandemic, among other tax relief incentives.