Growth in Africa is expected to average over 4% over the next five years, but is still heavily commodity-dependent, according to the Institute of Chartered Accountants in England and Wales (ICAEW).

In its report Economic Insight: Africa Q1 2016, the accountancy and finance body points to good news for African economies, but warns that manufacturing still accounts for a small share of output, adding that the old model of exporting raw materials is becoming unsustainable.

Michael Armstrong, Regional Director, ICAEW Middle East, Africa and South Asia, said: "Africa is the most commodity-dependent continent on earth. Africa's economies increasingly need to create a hospitable environment for companies in the manufacturing and services sectors to drive growth, as the old models of growth driven by exports of raw materials are outdated.”

The report notes that GDP growth in Africa is projected to average 4.3% between 2015 and 2020.

Nigeria, the largest economy on the continent, is expected to contribute significantly to Africa's economic expansion -at an average real rate of 4.8% p.a. between 2015 and 2020, contributing over 25% to the continent's forecast growth in this time-frame.

In the East Africa region Kenya's economy should to expand by around 6% during the 2017 to 2020 period.

Thanks to its relatively diversified economy and comparatively low commodity dependence bonding well with the country's economic growth outlook.

"The East African region is embracing the use of renewable energy to leapfrog older power generation technologies, while also reducing the need to extend the national energy grid to remote villages," said Armstrong.

The report notes that Kenya, for instance, is now ranked the seventh highest producer of geothermal power globally after it recently unveiled the second phase of the Olkaria geothermal plant.

However, Kenya continues to face its own unique challenges.

The country's unwarrantable fiscal situation is the primary reason why both Standard & Poor's and Fitch Ratings downgraded the country's outlook from stable to negative last year.

However, the report also points out that the Kenyan Government has taken important steps towards fiscal consolidation by preparing a supplementary budget that plans to reduce both development and recurrent public spending in the current fiscal year.

Tom Rogers, Associate Director, Macro Consulting at Oxford Economics, said: "A clear plan for preventing fiscal slippage will be needed to underpin confidence in public finances and economic stability. The government's recognition of these economic concerns will be needed to address these issues and instill some confidence in the country's economic outlook."

Oxford Economics, ICAEW's partner and accredited expert in global economic forecasting, and NKC African Economics produced the Economic Insight: Africa Q1 2016 report.