Mohamed Sharki
Big budgets and major projects in Morocco and Algeria aim to help the region return to rates of expansion seen before inflation and global geopolitical turbulence hit
Hopes are brighter for North Africa’s economies as the calendar flips into 2024, with the region seeking to put a bleak year behind it.
Geopolitical turbulence increased levels of uncertainty in 2023 when ripples from the pandemic were still being felt, and the impact of climate change worsened.
The worst drought the area has ever seen hit agricultural production. A devastating earthquake shook the Atlas Mountains in Morocco, catastrophic floods inundated Derna, Libya, recurring forest fires broke out in Algeria, and a food shortage sparked a wave of hunger in Tunisia.
And so, the bar for improvement is set low for the year ahead, but there is a sense of determination that progress will be made.
Members of the Arab Maghreb Union have allocated substantial financial budgets and investment projects for 2024. These allocations are considered the largest in their history as part of an effort to regain economic momentum.
Not long ago, the region – situated between the Middle East and the European Union, historically known as the intersection of the Arab-Islamic East and the Christian West – had precisely that.
In 2021, there were economic growth rates of up to 8% in Morocco, 4.3% in Tunisia, and 31.4% in Libya in 2021. But in 2022 and 2023, inflation stoked record-high prices and brought growth crashing down. Youth unemployment rates in North Africa exceeded 13%, exacerbating poverty and vulnerability.
The region spans over 6 million square kilometres within a triangle defined by the Mediterranean to the north, the Atlantic to the west, and the Sahara Desert to the south.
The faster the economy grows, and the higher per-capita income is achieved, the more jobs are created, offering a path out of poverty and higher living standards.
That is the aim. But it will not be easy.
According to a report from the International Labour Organisation in Geneva: “Middle-income countries in the Middle East and North Africa are unlikely to recover to pre-pandemic unemployment rates before 2019. The average unemployment rate is projected to remain 11.2%.”
Going for growth
Nonetheless, North Africa’s countries aim for growth, at 3.7% in Morocco, around 4% in Algeria, and 3% in Tunisia.
The International Monetary Fund (IMF) expects Libya to achieve the highest growth rate in the region and the wider Middle East, of 7.5%, fuelled by global oil prices, even after the impact of the devastating floods in the country’s northeast last autumn.
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Mohamed Sharki – Moroccan writer and journalist specializing in economic affairs and sustainable development in North Africa – Rabat
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