1. Economic Commission for Africa Office for North Africa Twenty Third Meeting of the Intergovernmental Committee of Experts (ICE) - Rabat, Morocco 10-13 March 2008 1 ECONOMIC AND SOCIAL CONDITIONS IN NORTH AFRICA IN 2007

2. Economic Commission for Africa Office for North Africa Twenty Third Meeting of the Intergovernmental Committee of Experts (ICE) - Rabat, Morocco 10-13 March 2008 2 World Economy: Accentuation of globalization -Oil prices higher and higher -Unprecedent increase in cereals prices in the world market - Increase in the weight of emerging countries -Crisis of risky credits which affected a larger number of countries -Low economic growth performance in USA

3. Economic Commission for Africa Office for North Africa Twenty Third Meeting of the Intergovernmental Committee of Experts (ICE) - Rabat, Morocco 10-13 March 2008 3 African Economies: Continuous Growth, Concentration of Trade and Foreign Direct Investment (FDI) Growth with controlled/contained inflation Reduced consolidated budgetary surpluses from the equivalent of 3.5 % of GDP to 0.7 % Trade balance deteriorating from a surplus equivalent to 3 % of GDP to zero in 2007 Stagnation of FDI flows in Africa in 2007, but increase in the share of North African Countries and of the Republic of South Africa Conflicts and disputes limiting security and deteriorating the investment environment

4. Economic Commission for Africa Office for North Africa Twenty Third Meeting of the Intergovernmental Committee of Experts (ICE) - Rabat, Morocco 10-13 March 2008 4 Economic Integration and Cooperation in North Africa: events and major initiatives Launch of Maghreb Bank for Investment and Foreign Trade (MBIFT) Maghreb Union of Employers (MUE) Organization of the General Assembly of the Union of Maghreb Bank (UMB) Progress achieved in the implementation of the «Agadir Agreement» Actions taken by Arab Maghreb Union for the implementation of the Maghreb Free Trade Zone Other sectoral events/activities

5. Economic Commission for Africa Office for North Africa Twenty Third Meeting of the Intergovernmental Committee of Experts (ICE) - Rabat, Morocco 10-13 March 2008 5 Economic Performances GDP growth driven by hydrocarbon producers Algeria: 6,5 % for non-hydrocarbon sectors Libya: 4.9 % for non-hydrocarbon sectors Egypt: growth of manufacturing industries, construction and service sectors (tourism in particular) Morocco: low performance of agriculture Mauritania: technical problems in the oil site of Chenguetti Sudan: high level of growth (oil program) Tunisia: growth driven by the high performance of agriculture following good rainfalls

6. Economic Commission for Africa Office for North Africa Twenty Third Meeting of the Intergovernmental Committee of Experts (ICE) - Rabat, Morocco 10-13 March 2008 6 Inflation Global inflation driven/induced by the world economy / international environment Morocco: role of compensatory board/funds Sudan: control of intern prices and imports

7. Economic Commission for Africa Office for North Africa Twenty Third Meeting of the Intergovernmental Committee of Experts (ICE) - Rabat, Morocco 10-13 March 2008 7 Exchange rates Impact of the depreciation of the US$ compared to Euro Fluctuating exchange rate vis-a-vis a basket of currencies, including Euro (Moocco) Free foreign currency market in Sudan Depreciation in the other countries, but dissimulated by the depreciation of US$

8. Economic Commission for Africa Office for North Africa Twenty Third Meeting of the Intergovernmental Committee of Experts (ICE) - Rabat, Morocco 10-13 March 2008 8 External exchanges/Foreign Trade Growth in 2007, despite adverse international environment Increase of exports and imports compared to 2006 in relation with the increase in primary commodities prices and oil in particular Decrease in regional trade surplus

9. Economic Commission for Africa Office for North Africa Twenty Third Meeting of the Intergovernmental Committee of Experts (ICE) - Rabat, Morocco 10-13 March 2008 9 Share of oil in exports Exports in M$US 94,5 % of total exports in Sudan Exports multiplied by 2 in Mauritania despite the problems faced in the Chinguetti oil site Exports earnings from hydrocarbons stagnating in Egypt in 2006-2007, their share decreasing in the total Main exports in Algeria and Libya

10. Economic Commission for Africa Office for North Africa Twenty Third Meeting of the Intergovernmental Committee of Experts (ICE) - Rabat, Morocco 10-13 March 2008 10 Public Finance Affected/Influenced by Oil prices and Policy Reforms Surplus in oil exporting contries and deficits in oil importing countries Morocco: improvment due to expansion of the tax base and increase of the transactions in contruction Mauritania: depreciation/deterioration of the budgetary situation following technical problems in Chenguiti oil site

11. Economic Commission for Africa Office for North Africa Twenty Third Meeting of the Intergovernmental Committee of Experts (ICE) - Rabat, Morocco 10-13 March 2008 11 Monetary situation: under the effects of the increase in foreign exchange reserves Morocco: high money supply due to availability of foreign assets/reserves Tunisia: careful monetary policy in order to safeguard the favourable position of the balance of payments Mauritania and Sudan: limited/controlled money supply in order to control inflation

12. Economic Commission for Africa Office for North Africa Twenty Third Meeting of the Intergovernmental Committee of Experts (ICE) - Rabat, Morocco 10-13 March 2008 12 Economic Policy Measures in 2007: same objectives Sustain the purchasing power of the population Promote job creation and self-employment Strengthening/decentralizing local public affairs Preservation of the environment Development of infrastructures Improvement of the business environment

13. Economic Commission for Africa Office for North Africa Twenty Third Meeting of the Intergovernmental Committee of Experts (ICE) - Rabat, Morocco 10-13 March 2008 13 Social Conditions Modest progress was made in the area of social conditions, in a context characterized by  strong growth  control of fiscal balances and inflation  increased investments and foreign trade The rate of unemployment dropped slightly Only slight improvement was registered by HDI The gap between average income and the social conditions widened

14. Economic Commission for Africa Office for North Africa Twenty Third Meeting of the Intergovernmental Committee of Experts (ICE) - Rabat, Morocco 10-13 March 2008 14 Main social development and employment measures Algeria: measures taken to address the unemployment challenge, particularly for youth and women Egypt: adoption of strategic plans and establishment of new institutions Morocco: continuation of human development oriented policy (basically in the framework of INDH) Mauritania: continuation and consolidation of poverty eradication policy Sudan: consultations and preparation of a National Social Conference Tunisia: measures taken in the area of employment and social development

15. Economic Commission for Africa Office for North Africa Twenty Third Meeting of the Intergovernmental Committee of Experts (ICE) - Rabat, Morocco 10-13 March 2008 15 Employment A declining trend in general, but slight recovery 2007 High youth unemployment Continuation of the application of measures launched by the countries  New Labour laws to strike a balance between offer and demand  Qualitative adaptation to the labour market requirements  Implementation of training programmes to facilitate mobility and adaptation

16. Economic Commission for Africa Office for North Africa Twenty Third Meeting of the Intergovernmental Committee of Experts (ICE) - Rabat, Morocco 10-13 March 2008 16 Difference between HDI and GDP per capita GDP per capita and HDI different values Only Libya has HDI rank higher than GDP per capita one This approach shows needs to improve human development in particular in Algeria, Morocco and Tunisia

17. Economic Commission for Africa Office for North Africa Twenty Third Meeting of the Intergovernmental Committee of Experts (ICE) - Rabat, Morocco 10-13 March 2008 17 Are the responses well oriented? Recently, all North African countries multiplied and deepened their interventions in favour of human development. But there is no social impact Is it because these instruments are too recent or because of their inadequacy? Very important to evaluate the pertinence of the different actions, to involve all the actors, and to share experiences with other countries

18. Economic Commission for Africa Office for North Africa Twenty Third Meeting of the Intergovernmental Committee of Experts (ICE) - Rabat, Morocco 10-13 March 2008 18 Conclusions and recommendations Existing potential to go beyond the present growth performances by: –Encouraging/promoting concertations between countries of the region and develop intraregional trade and investments Investment rates high and still increasing in some countries of the region but FDI still low: –Evaluate the impacts of the improvement of governance and the development of infrastructures on socio-economic conditions –Undertake multi-sectoral studies in order to identify areas which can absorb additional/more investments

19. Economic Commission for Africa Office for North Africa Twenty Third Meeting of the Intergovernmental Committee of Experts (ICE) - Rabat, Morocco 10-13 March 2008 19 Conclusions et recommendations Growth remains at the global level without job creation to programme studies on employment geared to relationships and reciprocal effects between growth, trends in active population, job creation by sectors and qualifications The impacts of efforts is still lower than expectations compared to other countries implementing similar policies define carefully a vision for an integrated social policy clarify the reasons of the delays encountered in social development despite the efforts deployed. Is it related to difficulties to identify the actual beneficiaries?

20. Economic Commission for Africa Office for North Africa Twenty Third Meeting of the Intergovernmental Committee of Experts (ICE) - Rabat, Morocco 10-13 March 2008 20 Action to be undertaken by the ECA Office for North Africa The office will continue to analyze the business environment in the region. With the studies on infrastructures, governance, ICT and the financial issues as well as manpower, the office could undertake a global assessment of the business environment in North Africa

21. Economic Commission for Africa Office for North Africa Twenty Third Meeting of the Intergovernmental Committee of Experts (ICE) - Rabat, Morocco 10-13 March 2008 21 Abdelilah Ouaqouaq ouaqouaq@un.org