Kenya and Burundi to Have Slowest-Growing Economies in East Africa – World Bank

The World Bank has projected that Kenya and Burundi will have the lowest economic growth in East Africa in 2026.

In an economic outlook report by the global lender, both countries are expected to grow at about 4.9 percent, placing them at the bottom of the regional growth rankings at a time when several neighbouring economies are posting significantly stronger expansion.

The outlook represents a notable shift for Kenya, which for years has ranked as East Africa’s second-fastest-growing economy after Rwanda. 

Rwanda is projected to remain the region’s growth leader in 2026, with the World Bank forecasting economic expansion of 7.2 per cent. 

The country’s strong performance is supported by sustained public investment, a favourable business environment, and continued recovery in services and tourism. 

Uganda is projected to follow Rwanda closely with economic growth of 6.4 per cent in 2026. The World Bank attributes this outlook largely to the anticipated commercial exploitation of Uganda’s oil reserves.

The country is preparing to begin crude oil exports through Tanzania, with shipments expected to start later this year. Oil-related investments, infrastructure development, and increased export revenues are expected to provide a significant boost to Uganda’s economy.

Tanzania is forecast to rank third in East Africa with projected growth of 6.2 per cent per year. The World Bank notes that Tanzania’s outlook is supported by low and stable inflation, continued expansion in agriculture, strong performance in mining, and increased construction activity linked to infrastructure projects and urban development.

Ethiopia, which is not part of the East African Community but remains a key regional economy, is also expected to post robust growth of about 7.1 per cent.

Since 2024, Kenya has consistently trailed its neighbours. In both 2024 and 2025, Uganda and Tanzania posted higher growth rates, while Burundi also briefly overtook Kenya in the World Bank’s 2025 projections, with growth of 4.6 per cent compared to Kenya’s 4.5 per cent.

Kenya’s weaker outlook reflects mounting fiscal and structural pressures. The World Bank cites the country’s heavy external debt burden as a key constraint on growth, noting that a large share of government revenues is now being used to service debt, limiting spending on development and social programmes. 

This reduced fiscal space has constrained the government’s ability to stimulate the economy through public investment.

The World Bank also highlights Kenya’s vulnerability to global trade shifts, stemming from its heavy reliance on the United States as a key export market.

Sectors such as apparel and textiles have previously been affected by uncertainty around the African Growth and Opportunity Act (AGOA), which allows Kenyan goods to access the US market duty-free. 

Although the US House of Representatives has recently agreed to extend AGOA for a further three years, the episode underscored Kenya’s exposure to external policy changes.