Taking the Pulse of North Africa
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The Operational Section (chapters 5 and 6) of this 2015 Annual Report of the African Development Bank’s North Africa Regional Department was prepared by Amine Mouaffak (Regional Program Officer, ORNA) and Vincent Castel (Chief Country Economist - Morocco). This work benefited from contributions from Hervé Lohoues (Principal Country Economist - Algeria), Tarik Benbahmed (Country Economist) and Malek Bouzgarrou (Principal Country Programme Officer - Algeria and Mauritania) for Algeria, Prajesh Bhakta (Chief Country Programme Officer - Egypt) for Egypt, Samia Mansour (Country Economist - Libya) for Libya, Olivier Brétéché (Principal Country Programme Officer - Morocco) and Vincent Castel (Chief Country Economist - Morocco) for Morocco, Marcellin Ndong Ntah (Resident Chief Country Economist - Mauritania) and Malek Bouzgarrou (Principal Country Programme Officer - Algeria and Mauritania) for Mauritania, Abdourahamane Charaf-Eddine (Chief Country Programme Officer - Tunisia), Philippe Trape (Principal Country Economist - Tunisia ) and Mickaelle Chauvin (Economist, ORNA) for Tunisia. The Thematic Section (chapters 1 to 4) of this 2015 Annual Report of the African Development Bank’s North Africa Regional Department was prepared by Kaouther Abderrahim Ben Salah (Economist, ORNA), Vincent Castel (Chief Country Economist - Morocco) and William Shaw (Economist, AfDB). The chapters are based on the African Economic Outlook of the six countries of the North Africa region, written by AfDB’s economists : Hervé Lohoues (Principal Country Economist - Algeria) and Tarik Benbahmed (Country Economist) for Algeria, Prajesh Bhakta (Chief Country Programme Officer - Egypt), Diarra-Thioune Assitan (Regional Economist, ORNA) and Inji Amr (Consultant, ORNA) for Egypt, Samia Mansour (Country Economist - Libya) and Sahar Rad (Former Senior Country Economist - Libya) for Libya, Samia Mansour (Country Economist - Libya) and Vincent Castel (Chief Country Economist - Morocco) for Morocco, Marcellin Ndong Ntah (Resident Chief Country Economist - Mauritania) for Mauritania, Philippe Trape (Principal Country Economist - Tunisia) and Mickaelle Chauvin (Economist, ORNA) for Tunisia. The authors would like to thank for their contributions: Assitan Diarra-Thioune (Regional Economist), Leila Mokadem (Resident Representative - Egypt), Yacine Fal (Resident Representative - Morocco), Boubacar Traoré (Resident Representative - Algeria), Yasser Ahmad (Chief Country Programme Officer - Egypt, Libya), Thouraya Triki (Chief Country Economist) and Yasmine Moustapha Eita (Principal Country Programme Officer). Projects Briefs were also reviewed by various Operations Officers from Sector Departments : Mr. Mohamed Ould Tolba (Chief Agricultural Economist, OSAN), Mrs. Audrey Chouchane (Chief Research Economist, EDRE), Mr. Mamadou Yaro Chief (regional Financial Management Coordinator, ORPF), Mr. William Coovi Firmin Dakpo (Chief Regional Procurement Coordinator, ORPF), Mrs. Selma Ennaifer (Chief Financial Management Specialist, ORPF), Mr. Riadh Belhaj (Principal Risk Officer, FFMA), Mrs. Blandine Wu Chebili (Principal Procurement Officer, ORPF), Mr. Mouhamed Gueye (Principal Education Economist, OSHD), Mrs. Laurence Lannes (Principal Health Economist, OSHD), Mr. Fernando Rodrigues (Senior Investment Officer, OPSD), Mr. Oussama Ben Abedelkarim (Senior Education Economist, OSHD), Mrs Sonia Barbaria (Consultant), Mrs. Charlotte Karagueuzian (Consultant, EDRE), Mohamed Labben (Consultant, ORPF), Mr. Ali Kies (Consultant, OITC), Mr. Emmanuel Diarra (Principal Financial Economist), Mr. Adama Moussa (Principal Electrical Engineer), Mr. More Pierre Ndong (Senior Transportation Engineer), Mr. Driss Khiati (Agricultural Expert), Mr. Mohammed El Ouahabi (Water and Sanitation Specialist), Mrs. Leila Kilani-Jaafor (Social Development Specialist), Ms. Gehane El Sokkary (Senior Socio Economist), Mr. Tarek Ammar (Principal Private Sector Specialist), Mr. Khaled El Askari (Senior Infrastructure Specialist) and Mr. Yasser Alwan (Senior Irrigation Engineer). This report was prepared under the guidance of Mr. Jacob Kolster (Director, ORNA). The African Development Bank (AfDB) This document was prepared by the African Development Bank (AfDB). Designations employed in this publication do not imply the expression of any opinion on the part of the institution concerning the legal status of any country, or the limitation of its frontier. While efforts have been made to present reliable information, the AfDB accepts no responsibility whatsoever for any consequences of its use. Published by: the African Development Bank (AfDB) Headquarters Immeuble du Centre de Commerce International d’Abidjan CCIA Avenue Jean-Paul II 01 B.P. 1387 Abidjan 01 CÔTE D’IVOIRE Tél. : (+225) 20 26 44 44 Fax : (+225) 20 21 31 00 Tunis Agency Avenue du Dollar, Berges du Lac 2 1053 – Tunis, TUNISIE Tel.: (+216) 71 10 20 65 Fax: (+216) 71 19 45 23 Design and Layout Yasso creation: Hela Chaouachi ([email protected]) Copyright © 2015 African Development Bank Website: www.afdb.org 2 The African Development Bank Group in North Africa - 2015 Table of contents 5 Preface 6 The AfDB at a Glance 11 Acronyms 15 CHAPTER 1 OVERVIEW – TAKING THE PULSE OF NORTH AFRICA 21 CHAPTER 2 COPING WITH THE MACROECONOMIC IMPACT OF DOMESTIC AND EXTERNAL VOLATILITY 22 Recent Developments and Prospects 25 Fiscal Policy 27 Monetary Policy 28 Economic Cooperation, Regional Integration and Trade 29 Debt P olicy 33 CHAPTER 3 CHALLENGES FACING PUBLIC SECTOR MANAGEMENT AND THE PRIVATE SECTOR 34 Private Sector 36 Financial Sector 37 Public Sector Management, Institutions and Reforms 41 CHAPTER 4 SOCIAL DEVELOPMENTS IN NORTH AFRICA 42 Building Human Resources 44 Poverty Reduction, Social Protection and Labour 46 Gender Equality 51 CHAPTER 5 THE AFRICAN DEVELOPMENT BANK GROUP IN BRIEF 53 Who We Are & What We Do 54 How We Are Financed 55 Africa’s Knowledge Bank 59 CHAPTER 6 BANK GROUP ACTIVITIES IN NORTH AFRICA 61 Regional Overview 65 Algeria 87 Egypt 121 Libya 131 Mauritania 143 Morocco 195 Tunisia 237 CHAPTER 7 STAFF & CONTACT DETAILS 3 4 The African Development Bank Group in North Africa - 2015 Preface n the wake of the Arab Spring in 2011, North Africa has women, the greatest assets of the region, to participate Igone through a period of major transition with significant in the economy to their full potential will be a priority as if very different political and social changes in the countries will addressing the economic disadvantages for men and of the region. Most countries have thus embarked on women living in disenfranchised regions. This calls for country-owned projects of economic reforms. Mostly, these improving the quality of education, access to quality health reforms have been aimed at maintaining macroeconomic care, job training, and effective policies that foster labor stability and improving standards of living—something that force participation. Removing excessive barriers to doing will require the creation of productive jobs in the private business in the private sector will also be key as will sector as well as better and fairer access to public well-targeted interventions in the poorest and most resources and economic opportunities. disenfranchised regions. Macroeconomic stability has, thus, broadly been This year’s Annual Report on North Africa reviews the maintained in North Africa except for some cases economic and social developments of North African exposed to violent conflicts. Development financing countries at a time when the most countries in the region has contributed to the upgrading of public infrastructure are seeking to improve the long-term levers for growth and basic service delivery. The structural reform agendas, and poverty reduction, as well as the efficiency of public on the other hand, remain work-in-progress with some services and the business environment in order to foster important advances made in expenditure reforms, notably private sector development. the reduction of large energy subsidies, while other areas of reform have proven to be difficult to tackle due to In chapter 1, entitled "Measuring the Pulse of North challenging political conditions. Africa", we present an overview of the situation in North African countries in light of recent experience. Going forward, and outside the countries in conflict, lower energy prices for oil-importing countries, a more favorable Chapter 2, entitled "Addressing the Macroeconomic external environment, and the impact of early reforms Impact of Internal and External Volatility", presents should underpin stronger GDP growth. However, this is the trend of North African economies and reviews fiscal unlikely to be enough to make a meaningful dent in and monetary policies, trade integration and the public unemployment. Furthermore, challenges to security still debt position. weigh on investor confidence, including in countries that have made progress in political and democratic transition Chapter 3, entitled "Challenges to Public Sector – implying that peace and stability in the region are now Management and Private Sector Development", clear pre-requisites for long-term development. reviews recent changes in private sector development incentives, financial sector intermediation and public Structural reforms are necessary to improve economic sector management in terms of the long-term challenges and social outcomes. In particular, enabling youth and facing North African countries. 5 The African Development Bank Group in North Africa - 2015 Chapter 4, entitled "Social Developments