With about $547bn of projects planned, the five North African markets covered in this report promise a substantial pipeline of potential future business opportunities for project investors, developers, contractors, consultants and manufacturers. And, after a decade of instability and uncertainty, there are compelling reasons to believe that the North Africa projects market is set to flourish.
The diversified economies of Egypt, Algeria, Morocco and Tunisia are delivering some of the highest levels of economic growth in the world as they continue their recovery from the dislocation caused by the 2011 political uprisings. Economic development programmes are opening up the markets to private investment, and the governments are developing their manufacturing, tourism and services sectors to create jobs and drive new revenues.
For investors, the region is rich in under-developed, world-class assets, including thousands of miles of undeveloped Mediterranean, Atlantic and Red Sea coastline, some of the most important historical and cultural treasures, and an abundance of spectacular natural assets. North Africa has close geographic, trade and economic ties to Europe and is home to the Suez Canal, the world’s busiest trade corridor. But its biggest asset is a population of about 190 million, almost four times the size of the GCC, which provides a huge consumer market, as well as a large, skilled, low-cost work force.
The large, young population is the primary driver behind the region’s project requirements and, as they struggle with weak finances, governments across North Africa are seeking to accelerate public private partnership (PPP) programmes to help them meet deliver housing, infrastructure, utilities and services. In return for reform and development commitments, they are being supported by the development bank and funding institutions.
The outlook for project contract awards growth in North Africa is strongly positive. Since 2008, about $29bn a year of project contracts have been awarded across the region. Since 2013, the average annual level of awards has risen about 10 per cent to about $32bn of awards a year. This is set to rise considerably over the coming five years as oil prices recover and the government economic programmes build momentum.
But doing business in North Africa comes with many challenges. And resilience, patience and flexibility are needed by anyone seeking to work in the region. Unlike the GCC, where the markets are similar to one another, North Africa offers five highly diverse markets, each with very distinct opportunities and risks. It is vital that anyone seeking to do business in Algeria, Egypt, Libya, Morocco or Tunisia invests time to understand exploring what is on offer. I hope that this report will be a valuable asset in that research.