Invest Africa 2024 Regional Outlook Series - North Africa

Invest Africa Insights

The economic dynamics and political landscape within the framework of Africa’s North markets for the 2024 fiscal year present a nuanced scenario.

The growth in North Africa is estimated to have decreased by 1.3 percentage points to 4.1 percent in 2022. This decline was attributed to the sharp contraction in Libya, accounting for 6 percent of the region’s GDP, and the impact of drought in Morocco, constituting 13 percent of the region’s GDP. A more robust growth trajectory is anticipated in 2023–24, averaging 4.5 percent. This resurgence is underpinned by a strong recovery in both Libya and Morocco, along with the consolidation of gains in other countries.

In contrast, Egypt’s growth almost doubled from 3.3% in 2021 to 6.1% in 2022 due to greater investments in infrastructure, higher gas production and increased vessel traffic through the Suez Canal.

Among the major North African markets, Morocco is poised to experience one of the most substantial rates of growth acceleration after a pronounced slowdown resulting from drought, escalating energy prices, and a deceleration of growth in the EU, its primary trading partner. Morocco's GDP is projected to expand by over 3.1% this year, a significant improvement from the 0.8% recorded in 2022. North Africa holds immense potential to meet its energy needs and act as an alternative source for the EU’s oil and gas requirements particularly in Libya and Algeria, given its proximity to Europe and the EU’s shift away from Russia’s oil and gas.

However, concerns persist regarding the quality of growth and its sustainability in the future. Sub-Saharan Africa has witnessed an upsurge in attempts to destabilise governments through unconstitutional or violent means in recent years. Coups, violent extremism, riots, and social unrest have become more prevalent. The region remains susceptible to significant challenges, including climate shocks and the volatile political situation in Libya.

While pockets of economic resilience exist, the region confronts notable challenges related to political stability and the long-term sustainability of economic growth. Addressing these challenges will be pivotal in fostering a more stable and prosperous future in North Africa’s markets.