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North Africa Economic Outlook 2018
12/03/2018 13:44
North Africa Economic Outlook 2018
This <em>North Africa Economic Outlook </em>(covering Algeria, Egypt, Libya, Mauritania, Morocco, and Tunisia) examines the macroeconomic performance of the region and the outlook for 2018 and 2019 and explores the relationship between food security and rural poverty. Part I looks at the key drivers of regional GDP growth and its sectoral decomposition, price movements, scal and current account balance, domestic resource mobilization, and debt dynamics. It also identi es common structural issues facing North African countries and analyzes trends in poverty and inequality and how they relate to unemployment and growth. Part II explores food security and rural poverty in North Africa, viewing them as interlinked. It proposes a strategy to enhance food security while reducing rural poverty and rural–urban inequality by increasing farmers’ share of value added. The North Africa region has recovered strongly since the Arab Spring in 2010. Indeed, real GDP growth was estimated at 4.9 percent, up from 3.3 percent in 2016, higher than the African average of 3.6 percent and second only to East Africa. But this improved performance stems largely from the greater than expected production and export of oil by Libya, which generated strong GDP growth of 55.1 percent, thanks to an improved security situation resulting from a joint regional and international assistance effort to the country. Growth prospects for 2018 and 2019 are positive given reforms undertaken in all countries. The growth outlook for the region remains favorable relative to that for other regions (except East Africa) with an average growth projected at 5.0 percent in 2018 and 4.6 percent in 2019.Read more
North Africa - Working paper - Measuring Inclusive Growth: From theory to applications in North Africa
06/01/2017 12:55
North Africa - Working paper - Measuring Inclusive Growth: From theory to applications in North Africa
North Africa - Working paper - The Role of Nascent Entrepreneurship in Driving Inclusive Economic Growth in North Africa
29/12/2016 12:15
North Africa - Working paper - The Role of Nascent Entrepreneurship in Driving Inclusive Economic Growth in North Africa
North Africa - Working paper – Public Investment and Growth in the Maghreb Countries
30/06/2016 14:51
North Africa - Working paper – Public Investment and Growth in the Maghreb Countries
North Africa - Working paper – Agricultural Production, Food Security and Higher Value in North Africa
30/06/2016 14:51
North Africa - Working paper – Agricultural Production, Food Security and Higher Value in North Africa
North Africa - Working paper - Measuring Inclusive Growth: From Theory to Applications in North Africa
30/06/2016 14:51
North Africa - Working paper - Measuring Inclusive Growth: From Theory to Applications in North Africa
North Africa - Working paper - Procedures for the Direct Targeting of Poverty and Human Development in Morocco
23/06/2016 14:51
North Africa - Working paper - Procedures for the Direct Targeting of Poverty and Human Development in Morocco

Categories: Morocco

North Africa - Working paper - From Resource Curse to Rent Curse in the MENA Region
16/03/2016 11:01
North Africa - Working paper - From Resource Curse to Rent Curse in the MENA Region
North Africa - Working paper - Promoting North African Women’s Employment through SMEs
26/11/2015 17:40
North Africa - Working paper - Promoting North African Women’s Employment through SMEs
North Africa - Working paper - Fundamentally changing the way we educate students in the Middle East and North Africa (MENA) region
04/11/2015 11:32
North Africa - Working paper - Fundamentally changing the way we educate students in the Middle East and North Africa (MENA) region
North Africa - Working paper - Does foreign direct investment improve welfare in North African countries?
29/04/2015 11:09
North Africa - Working paper - Does foreign direct investment improve welfare in North African countries?
Economic Brief - Regional integration in South-East Asia : lessons for the southern Mediterranean Countries
07/04/2015 10:53
Economic Brief - Regional integration in South-East Asia : lessons for the southern Mediterranean Countries
North Africa - Working paper - Trade Volume and Economic Growth in the MENA Region: Goods or Services?
19/02/2015 08:46
North Africa - Working paper - Trade Volume and Economic Growth in the MENA Region: Goods or Services?
Economic Brief - Promoting crisis-resilient growth in North Africa
13/11/2014 11:40
Economic Brief - Promoting crisis-resilient growth in North Africa
ORNA - North Africa - Annual Report 2014
03/09/2014 15:11
ORNA - North Africa - Annual Report 2014

Categories: Algeria, Egypt, Tunisia, Morocco, Libya

The AfDB Group in North Africa 2014
28/08/2014 15:09
The AfDB Group in North Africa 2014
Economic Brief - Labour market reforms in post-transition North Africa
19/03/2014 11:00
Economic Brief - Labour market reforms in post-transition North Africa
Working Paper 187 - The Real Exchange Rate and External Competitiveness in Egypt, Morocco and Tunisia
23/12/2013 09:40
Working Paper 187 - The Real Exchange Rate and External Competitiveness in Egypt, Morocco and Tunisia
A real exchange rate that is broadly aligned with its equilibrium value is an important part of a country’s macroeconomic and external competitiveness framework. Persistently misaligned real exchange rates can cause a misallocation of resources between tradable and non-tradable sectors and negatively impact labor market dynamics. Reduced external competitiveness due to over-valued exchange rates hampers exports, aggregate demand, growth and job creation. Besides the longer-term implications, real exchange rate misalignment can lead to inflationary pressures and even trigger speculative attacks. When setting their exchange rate policy, countries also need to balance their goals of reaching competitiveness and macroeconomic stability. In Egypt, Morocco, and Tunisia concerns about real exchange rate misalignments have prevailed for some time given the countries’ high unemployment, stagnating global export shares, and low export diversification. External competitiveness became even more relevant in the aftermath of the global financial crisis and after the 2011upheaval, with inclusive growth and job creation once again topping the countries’ economic policy agenda. By providing accurate signals to producers, the real exchange rate can help generate competitive jobs via exports. It can also help reduce income inequalities by raising the workers’ marginal revenue product. To be effective, the aligned real exchange rate needs to be complemented by other sound macroeconomic policies and enabling business environment. As shown by their low and stagnating shares in global exports, Egypt, Morocco and Tunisia have been facing external competitiveness challenges. Low and constant (or marginally rising, as was the case of Egypt) export shares help explain why the aggregate demand growth in these countries has remained subdued and not generated enough ‘decent’ jobs in export sectors. The three North African economies are less diversified than some other emerging market economies at comparable levels of development. Europe accounts for a disproportionate share of their export destinations, reflecting geographical closeness and long-established business ties. This paper aims to find out whether the real exchange rate misalignment contributed to the weak external competitiveness (e.g., limited export value added and diversification) in the three North African countries. To this goal, it estimates the real equilibrium exchange rate for the past three decades, using the stock-flow approach. This approach differentiates between (i) the medium-term undervaluation caused by the Balassa-Samuelson effect (productivity catch up) that is unlikely to cause abrupt adjustments and (ii) misalignment caused by other factors than productivity differentials. It is particularly suitable for emerging markets that can go through structural and productivity changes impacting the medium-term path of the real exchange rate. The empirical analysis is based on annual data series from 1980 to 2009, obtained from various databases of the African Development Bank and IMF. The estimate results of the real exchange rate models, obtained using the DOLS and ARDL models. For each country, the baseline model linking the real exchange rate to productivity and net foreign assets was estimated first. Subsequently, additional control variables including the government spending ratio, openness, the investment ration and terms of trade were added one by one to the baseline model. Our results indicate that in the long run, decreases in net foreign assets, equivalent to capital inflows, result in an appreciation of the real exchange rate. Regarding the impact of productivity, the coefficient estimates are generally positive in Egypt, indicating that increases in productivity lead to real exchange rate depreciation. In Morocco the impact of productivity on the real equilibrium exchange rate is significant, but negative, indicating that the increase in productivity has the traditional Balassa-Samuelson effect. In Tunisia productivity has an ambiguous impact on the real exchange rate. Further, a greater openness would lead to a depreciation of the real exchange rate in all three countries. Finally, improvements in terms of trade would lead to real exchange rate appreciation in Egypt and Morocco, most likely via inflation differentials. Regarding the misalignment between the actual and real exchange rate and the long run real equilibrium exchange rate, the paper found that: For Tunisia, the low misalignment in recent years can be explained by the abandonment of the real exchange rate targeting and gradual introduction of the exchange rate flexibility. The real exchange rate of Egypt was overvalued from the mid-1990s until mid-2000s and in recent years, following the rising inflation rate and current account and/or fiscal deficits. In Morocco, misalignment has been low in recent years. The county experienced a short overvaluation in mid- 80s entailed by the current account deficit, followed by the devaluation in the late 1980s. Morocco’s equilibrium exchange rate’s seems to have not been affected by the global economic crises, in part due to prudent monetary policy. In summary, utilizing – for the first time for North Africa – the stock-flow approach to estimating the real equilibrium exchange rate, this paper estimated misalignments of real exchange rates in Egypt, Morocco, and Tunisia during the past three decades. While Egypt experienced protracted misalignment in the past and recent years, real exchange rates in Morocco and Tunisia stayed closer to their equilibrium values. However, in all the export growth has been lagging some other emerging market economies. The paper suggests that non-price structural factors such as labor market flexibility, skills, and investment climate are a key for unlocking the export and productive potential of the three North African countries. Intra-regional trade – both with North Africa and the rest of the continent – together with greater orientation to fast growing emerging markets could also raise countries’ external competitiveness.Read more
Economic Brief - The Search for Inclusive Growth in North Africa- A Comparative Approach
11/12/2013 16:59
Economic Brief - The Search for Inclusive Growth in North Africa- A Comparative Approach
The AfDB Group in North Africa 2013
11/07/2013 09:23
The AfDB Group in North Africa 2013
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