GDP Official Exchange Rate and GDP Purchasing Power Parity Comparison: East African Community (EAC): A Comparative Study

Abstract

The strength of the book is that it is comprehensive, well written and accessible to students who don’t have an in depth- understanding of formal economics.”(Matthew Cole, Birmingham University)

The main objectives of this Review paper is to answer three questions in easy and soft language for an in depth understanding. which country is more advanced in East African community (EAC) using comparison of GDP Official exchange rate (GDP OER) and GDP Purchasing power party (GDP PPP), Is Rwanda contributing more to global Economy than other countries member of EAC, and the last one is the average person income or wealthier in Rwanda compared to other countries member of East African community, all these issues are being addressed in this review paper. 

The methodology used in this paper was a Descriptive study, where EAC members where described based on historical data published from world bank, IMF, NISR, and then compared where comparison was based on GDP official exchange rate, PPP, expenditures partners, Trade per capita, exports, imports and worldwide governance indicators. 

The result showed that Kenya is the most advanced country in EAC members, with highest Nominal GDP in US dollar, times more than one point five of Tanzania, two point five times of Uganda, seven times of Rwanda and twenty times of Burundi. Even though country like Kenya is one step ahead of Tanzania in terms of GDP per capita, Tanzania had spent much in gross fixed capital formation compared to Kenya and all other EAC members. And in terms of governance Rwanda is a head of its counterparts EAC members. Kenyans are wealthier in EAC and Kenya contributes more in global economy in terms of exports and imports.  

Key words: GDP OER, GDP PPP, EAC, Global economy, Governance and Advanced.