The hospitality industry would be vulnerable to a downside scenario involving the rapid spread of the virus in urban areas
On August 14 the World Health Organization declared a Public Health Emergency of International Concern in response to the rapid growth of mpox cases driven by a new, more transmissible and deadly variant of the virus known as clade 1b. The outbreak was initially concentrated in northeastern eastern Congo (DRC) but several East African countries including Burundi, Kenya, Rwanda, and Uganda have reported multiple cases. Individual cases have also been reported in Sweden and Thailand. Governments in East Africa have not introduced travel bans, although health screening of international travelers has been implemented. Under FrontierView’s base case, lockdowns will not be implemented because public health infrastructure in countries such as Kenya, Tanzania, and Uganda will likely have the capacity to contain the spread of the disease.
Business Implications:
Most multinationals should not adjust their commercial plans in East Africa for the foreseeable future. However, firms selling to consumers should review their preparedness for disruption to the hospitality industry in the event of a downside scenario materializing, namely the wider spread of the virus in large urban areas such as Nairobi and Kampala. The uncontrolled spread of the disease would also cause international arrivals to the region’s tourist hubs of Kenya and Tanzania to slump, affecting firms selling premium consumer products such as high-priced alcoholic beverages.
What will drive economic growth in East Africa through 2025?
East Africa will continue to benefit from diverse drivers that will contribute to the region’s buoyant economic outlook. Booming activity in ICT and financial services will lead growth. Falling interest rates—facilitated by improved currency stability and slowing inflation—will support growth in the manufacturing and construction industries. Infrastructure investment, especially into renewable energy and transport projects funded by donors and development agencies, will aid performance. However, the vulnerability of the agriculture industry (the primary source of livelihoods for large swathes of the population) to weather extremes, and strained public finances present the most significant risks to the region’s growth outlook.
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