Introduction – Promising Economic Growth and Green Priorities
North African countries are set to experience a slight increase in economic growth, with projections of 4.6 percent in 2023 and 4.4 percent in 2024, according to the African Development Bank’s latest report.
The pan-African institution unveiled its 2023 North Africa Economic Outlook report on July 27 in Tunis, shedding light on the theme
“Mobilizing Private-Sector Financing for Climate and Green Growth in Africa.”
Diverse Growth Drivers and Challenges
Service Sector Dominance and Fluctuating Growth
The Bank Group highlighted that the region’s growth is primarily driven by the service sector, particularly trade and tourism. However, growth in North Africa saw a dip in 2022, recording 4.1 percent compared to 5.4 percent in 2021.
Notably, significant disparities exist between countries concerning growth rates, as explained by Audrey Verdier-Chouchane, Bank Group Regional Economist for North Africa.
“To sustain inclusive growth, the region should implement structural reforms that support the development of the private sector, improve productivity and employability, and create job opportunities,”
stressed Ms. Verdier-Chouchane.
Managing Inflation, Budget Deficit, and Balance of Payments
Addressing Inflation and Fiscal Gaps
The region’s inflation is projected to reach double digits at 14.2 percent in 2023, gradually decreasing to 6.9 percent in 2024. At the same time, the region should maintain the regional budget deficit at around 3.5 percent of GDP in 2023 and 3.2 percent in 2024.
Moreover, the balance of payments deficit is expected to decline to 0.5 percent of GDP in 2023 and further to 0.2 percent in 2024.
The African Development Bank attributes the region’s external position to global economic factors, including fossil fuel prices, trade structures, tourism, and foreign direct investments.
The African Development Bank recommends coordinated monetary and budgetary policies to tackle inflation and safeguard small businesses and populations through targeted public spending.
Ensuring Food Security and Strengthening Resilience
Additionally, ensuring food security remains a critical objective, with investments in agriculture, improved varieties, water, and soil management strategies being essential.
Green Growth and Investment Opportunities
Embracing Green Priorities and Capitalizing on Natural Resources
North Africa must capitalize on its abundant natural resources while making green growth an urgent priority. Encouraging private sector financing, particularly in green energy infrastructure, energy efficiency, sustainable agriculture, and land restoration, is crucial.
The private sector can bring much-needed expertise, technology, and management skills to execute green development projects effectively.
Advancing Sustainable Management of Natural Capital
Hence, North Africa faces a dual challenge of leveraging its abundant natural resources while prioritizing green growth. It calls for encouraging private sector financing, especially in green energy infrastructure, energy efficiency, sustainable agriculture, and land restoration. The private sector’s involvement is vital, as it brings valuable expertise, technology, and management skills to effectively implement green development projects.
The Role of Development Partners and Institutions
Collaborative Efforts for Climate Actions and Green Growth
The report emphasizes the vital role of the African Development Bank Group and other development partners in optimizing the role of the private sector and natural capital in financing climate actions and green growth in North Africa.
The African Development Bank Group presented the North Africa Economic Outlook report at its regional headquarters. This report has been a flagship publication of the bank since 2003.
The launch event gathered senior figures from government, national and regional institutions, the private sector, researchers, academics, and the media. The event was also accessible via videoconference, ensuring broad engagement with the report’s critical insights.
Fostering Engagement and Informed Decision-Making
Looking ahead, the North Africa Economic Outlook report holds a pivotal position as a flagship publication of the African Development Bank Group since 2003.
The Bank Group recently unveiled the report at its regional headquarters, drawing senior figures from government, national and regional institutions, the private sector, researchers, academics, and the media.
The event’s accessibility via videoconference further ensured broader engagement with the report’s essential insights, fostering informed decision-making and collective efforts for green growth priorities and sustainable economic growth in North Africa.
Sources: THX News & African Development Bank Group.
