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ANALYTICAL BRIEF: Natural Resources and Economic Growth in East Africa

SOURCE: USAID Economic Analysis and Data Services (EADS)

East Africa offers unique opportunities and challenges for the management of natural resources in sub-Saharan Afri- ca. Although energy production and trade have lagged behind the rest of sub-Saharan Africa, East African countries hold considerable oil reserves and great potential for renewable energy including geothermal, hydro, solar, and wind. Many East Africans—particularly those residing in rural areas—lack access to electricity, but strengthened regulatory frameworks and the potential for increased intra-regional energy trade hold promise for expanded access in the future. In addition to energy, East Africa’s abundant biodiversity contributes to the economy through  sheries in the region’s lakes and coastal waters and through wildlife tourism. However, East Africa’s natural resources face partic- ular vulnerabilities with the threat of climate change, given the region’s high population growth, reliance on rain-fed agriculture, and recent history of extreme weather events.

This paper will examine the current state of natural resources in East Africa—with an analysis of energy, water, biodi- versity, and climate change—and investments that U.S. foreign assistance has made in these areas. For the purposes of this analysis, East Africa includes Burundi, Djibouti, Kenya, Ethiopia, Rwanda, South Sudan,Tanzania, and Uganda.