Outlook: Yet another cycle of uncertainty for the region

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As the armed forces and security services manage to control, to a certain extent, the terror threat, the Greater North Africa region is facing unprecedented political tension, social stress and economic despair.  Data for all countries in the North Africa zone, extending to the Sahel, look awful.  On the economic front, all nations in the region as facing growing budget and trade deficits, dangerously accumulating debts, and currencies that have consistently weakened over the past years.  All of them are having hard time attracting foreign investors and stress is on the rise everywhere.

Economically, Morocco is facing challenges that threaten its 2017 economic growth, with potential impact on broader society. For instance, GDP growth was its slowest in a decade in 2016 at 1.1%. The government insists it will do better in 2017 and expects some rubber-band effect this year. But let’s face it, with FDI down 28% and foreign debt reached $32 billion in mid-2016, what is Morocco doing to recover its lost ground. Many other statistics show the potential for a difficult year to come. Although a divided government may not mean anything since key decisions come from the King,  the difficulties of Prime Minister Benkirane to form a government are symptomatic of an executive branch poorly prepared to make coherent policy decisions and a legislature likely to be divided as well.

Algeria’s economy is perhaps in a tougher position considering its oil fortunes have dwindled rapidly these past years owing to the drastic fall in oil prices. A recent recovery in oil prices remains to be confirmed. But the country’s biggest problem is its politics. Its President’s illness, resulting in his virtual disappearance from public eye has allowed his entourage to take center stage and call the shots, constitutes the country’s biggest wildcard related to its stability.

Tunisia’s economy too is in distress.  Its budget and trade deficits have been increasing, FDI was down 7% in 2016, tourism revenues have been down by over 8%, and the country’s political leaders have been making visits to Saudi Arabia, seeking some help.  Yet the country’s biggest  security problem is the predicted return of a large number of militants from war zones in Syria and Libya. They are some 6,500 Tunisians out there fighting abroad, and their return could spell trouble.

Libya’s economy is non-existent and this year, it will be war as usual. Strong man Haftar is working to become the next Muamar Gaddafi, and has gotten support from Moscow, Riyadh, Cairo and many others whose priorities may not meet those of the Libyan people.

And then there is Trump and Theresa May, and even may be French nationalist Marine Le Pen. All of these will form the basics of yet another cycle of uncertainty for the region.

This week’s issue address a series of pain points facing North Africa.  Download the issue here, and as usual, send us your feedback at daoud@north-africa.com

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Arezki Daoud is The North Africa Journal Editor and MEA Risk LLC’s Chief Executive and Lead Analyst. At the North Africa Journal Arezki oversees content development and sets the editorial policies and guidelines. Arezki is an expert on African affairs, with primary focus on the Maghreb, Sahel and Egypt. His coverage of the region spans from security and defense to industrial and economic issues. His expertise includes the energy sector and doing business in the region. At MEA Risk, Arezki overseas all aspects of the company’s development, from the research agenda to growth strategy and day-to-day business activity. Arezki brings a wealth of skills. After college, he worked for oil company Sonatrach, then held research, forecasting and consulting positions for the likes of Harvard University, IDG and IDC. Arezki can be reached at daoud@north-africa.com, at US+508-981-6937 or via Skype at arezki.daoud