As inflation, higher interest rates and shifting geopolitical alliances continue to weigh on the global economy, East Africa is finding room to grow where many regions are struggling. The pressures are real, but they have not stalled activity. Instead, the region is being defined by steady expansion, deeper trade ties and a series of investment decisions that are quietly strengthening its economic base.
Fresh projections from the United Nations suggest this is not a temporary rebound. In its World Economic Situation and Prospects 2026 report, the UN expects East Africa to be Africa’s fastest-growing subregion next year, with gross domestic product forecast to rise by 5.8 percent. That compares with an estimated continental average of 4.0 percent, placing East Africa clearly ahead of its peers.
The outlook is anchored by Ethiopia and Kenya, which the UN identifies as the main contributors to growth. Investment spending and expanded power capacity feature prominently in the forecast, reflecting a region that has continued to build even as financing conditions tightened elsewhere.
East Africa gains investors amid global shifts
For Sim Tshabalala, chief executive officer of Standard Bank Group, Africa’s largest lender by assets, the data mirrors what he sees in discussions with governments and companies across the region. Investors, he says, are reassessing where growth can still be found as uncertainty rises in developed markets. East Africa is increasingly part of that conversation.
“Strong GDP growth forecasts, a powerful demographic dividend, and rising economic formalization position the continent as a compelling opportunity,” Tshabalala said. He added that as global supply chains adjust, Africa’s role is becoming visible in sectors linked to minerals, manufacturing and services. Within that context, East Africa is drawing greater attention because of its location, its expanding markets and its progress on regional trade.
That attention rests on a group of economies that have kept investing through cycles. Kenya, Tanzania, Ethiopia, Uganda and Rwanda have attracted funding for roads, ports, power and digital infrastructure. Access to the Indian Ocean has long mattered, but it is now being reinforced by transport corridors that connect coastal gateways to inland markets, making trade faster and more predictable.
Ports in Mombasa and Dar es Salaam, along with road and rail links stretching inland, are reshaping how goods move across borders. Financial institutions say the combination of infrastructure upgrades and a growing workforce is also drawing interest in technology and data-related investments.
East Africa builds, reforms cautiously
The UN’s report balances optimism with caution. While East Africa’s projected 5.8 percent growth in 2026 would lead the continent, it remains below the 6.3 percent average recorded between 2010 and 2019. High debt-servicing costs, limited fiscal space and tight global financing conditions could still slow progress if left unchecked.
Ethiopia sits at the center of the current forecast, with growth projected at 6.3 percent in 2026. Construction is under way on the $12.5 billion Bishoftu International Airport, which the government has described as Africa’s largest aviation infrastructure project. Prime Minister Abiy Ahmed has said the airport is designed to support logistics, exports and regional connectivity.
The country has also introduced currency and financial-sector reforms since 2024, unlocking support from the International Monetary Fund and the World Bank. In its 2025–2026 assessment, the IMF said the changes were critical to restoring balance and confidence, while warning that the transition would require careful management.
Kenya, where growth is projected at 5.1 percent in 2026, is also moving ahead with transport upgrades. President William Ruto has said work will begin on a modern airport redevelopment at Jomo Kenyatta International Airport starting in 2026, aimed at strengthening Nairobi’s role as a regional hub.
Banks, capital back East Africa growth
Private capital is following the public spending. The Competition Authority of Kenya recently approved Zenith Bank Plc’s plan to acquire 100 percent of Paramount Bank Limited, clearing the way for the Nigerian lender’s entry into East Africa’s largest economy.
South Africa’s Nedbank Group has proposed buying a 66 percent stake in NCBA Group in a cash-and-stock transaction valued at $855.5 million. Based on Nedbank’s share price of R250, the deal would be settled 20 percent in cash and 80 percent in newly issued shares listed in Johannesburg. If completed, it would rank among the region’s most significant cross-border banking transactions in recent years.
For Standard Bank, the approach is consistent. Tshabalala says the group is focused on expanding its existing footprint and using its international network to support clients operating across East Africa. “Africa is our home, we drive her growth,” he said, describing the phrase as a guide for strategy and partnerships.
Taken together, the data and the deal flow point to steady progress rather than easy gains. Risks remain, and global conditions are far from settled. Still, the UN’s projections show East Africa pulling ahead at a time when much of the world is slowing, giving the region a measure of resilience that stands out in an uncertain global economy.
