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Tunisia:
Tunisia’s underdeveloped financial markets protected it from direct impact by the
global financial crisis. The external tumult, especially the onset of a deep recession in
Europe—the destination for three-quarters of Tunisian exports and the source of nearly
all inward FDI—had a significant negative impact on Tunisia’s trade and industrial
production in 2009. GDP growth rate was at 6.3% in 2007, 4.5 % in 2008 and 3.1% in
2009, before rebounding to an estimated 3.8% in 2010.
Tunisia’s exports have performed better than expected in the first ten months of
2010, owing to strong demand from the EU. In spite of strong export growth, increased
demand for imports has led to a widening trade deficit. This caused the current-account
deficit to more than quadruple in the first nine months of 2010. The recent depreciation
of the euro could boost global exports from the euro area, with feedback effects on
Tunisian export sectors such as electrical and mechanical industries. Unlike other
countries in the region, Tunisia’s revenues from tourism and remittances from Tunisians
abroad have remained broadly stable. On the negative side, performance of the
agriculture sector has been poor in the last half of 2010 and is expected to continue.
According to the EIU, 2010 had an estimated unemployment of 14%, and is
projected to hover around the same figure for the next 5 years, even though Ben Ali’s
development plan the plan targets a reduction in the unemployment rate to 11.6% in
2014, based on the assumed creation of more than 400,000 new jobs by 2014. The
unemployment rate is even higher for people under 25, coming in at an estimated 25%.
Algeria:
With oil and gas earnings expected to decline in 2011, despite a recovery of oil
prices since early 2009 and an anticipated rise in gas prices next year, the need for
diversification is again becoming apparent. Unfortunately, rather than renewing its
embrace of liberal reform, the government is instead adopting an increasingly adversarial
posture vis-à-vis foreign investors. The state of the economy will remain heavily
dependent on the performance of the hydrocarbons sector. The increase in oil and gas
revenues, while lower than projected, will nevertheless be sufficient to power real GDP
growth of 4% in 2010 after staying around 2.4% in 2008 and 2009, but the pace of
expansion will slow slightly after 2010, reflecting the negative impact of a projected
decline in oil output and an anticipated weakening of economic growth in Europe.
Exports have recovered on the back of higher oil sales, while the growth of
imports has been slowed by the strengthening of the local currency against the euro and
the implementation of measures aimed at dampening demand for foreign goods, resulting
in a significant widening of the trade surplus. The fall of global demand for
hydrocarbons has exposed Algeria’s vulnerabilities. Despite the recent recovery of oil
prices and the improvement of medium-term financial perspectives, the economy remains
too dependent on hydrocarbon exports, unemployment is still relatively high, and
productivity and the business climate lag behind main trading partners.
With lower hydrocarbon revenues, external and fiscal balances deteriorated, but
economic growth continues to be strong, with low inflation, sizable reserves and minimal
external debt. In the short term, growth will continue to be sustained by large public
spending. Output in the hydrocarbon sector should improve with the international
economic recovery, contributing positively to overall growth for the first time in many
years.
Concerning unemployment, one in five people in the 16-24 age group were
unemployed as of end-September 2010, and 22% of graduates were out of work. In
2010, the estimated unemployment sits at 9.9%, well down from its high of 30% in 2000.
Niger:
Niger's economic performance has improved over the last decade. Political
stability, sound macroeconomic policies, and structural reforms have resulted in higher
economic growth. In recent years, the favorable developments have also facilitated the
return of external financial support, and extensive debt relief under the HIPC (Heavily
Indebted Poor Countries) and MDRI (Multilateral Debt Relief Initiative) has substantially
reduced the external debt burden and increased fiscal space. In spite of this progress,
Niger remains one of the poorest and least developed countries in the world, ranking
182nd, bottom, out of 182 countries in the 2009 United Nations Human Development
Index. The landlocked economy is heavily dependent on subsistence agriculture, which
is vulnerable to adverse weather conditions. Nevertheless, the country is rich in minerals
and is a leading producer of uranium. Oil production is expected to start in 2012 and
uranium exports will pick up gradually after 2013. As such, ensuring that the
developments of the oil and mining sectors translate into higher growth and faster
poverty reduction is the major challenge for Niger in the years ahead.
Niger’s economy has largely been spared from the global economic and financial
turmoil. Non-agricultural growth is buoyant and inflation is coming down from its 2008
peak. The sizeable current account deficit, reflecting high imports linked to ongoing
projects in the oil and uranium sectors, is largely financed by foreign direct investment.
The strong growth of trade between China and Niger, 99% of which consists of
Chinese exports to Niger, continued in the first seven months of 2010, with an increase of
57% over the same period in 2009. There was an almost fivefold increase in 2008 and a
70% increase in 2009. With rapidly growing demand for uranium for its burgeoning
electricity-generating sector, China may become a key export market for Niger. China
National Nuclear corporation made a deal with Niger’s state-owned mining company
Sopamin in September 2010, in which they plan to buy 300 tons of uranium coming in at
excess of USD $30 million.
Egypt
Egypt’s economy has been resilient to the crisis. Financial contagion was
contained by limited direct exposure to structured products and low levels of financial
integration with world financial markets. Sustained and wide-ranging reforms since 2004
had reduced fiscal, monetary, and external vulnerabilities, and improved the investment
climate. These bolstered the economy’s durability and provided breathing space for
appropriate policy responses.
Egypt enjoyed rapid growth with real GDP averaging 7 percent from 2006 to
2008 underpinned by large-scale foreign investment and the favorable external
environment. In the face of weaker external demand as a result of the global economic
crisis, the economy held up relatively well with real GDP growth declining only to 4.7
percent in 2009. Inflation picked up from 4.2 percent in 2006 to 11 percent in 2007 and
11.7 percent in 2008, reflecting rising world commodity prices and strong domestic
demand. After falling to single digit levels in the first half of 2009, inflation picked up
again later in the year mainly due to supply shocks, leading to rising inflation to 16
percent.
Egypt’s unemployment rate is around 9%, down from a high of 12% in 2005.
SENEGAL
Senegal's economy has been adversely affected by the global economic crisis,
mainly through drops in remittances, external demand, tourism, and foreign direct
investment. Real GDP growth slowed considerably in 2008 and 2009 with the industrial
and services sectors suffering from depressed demand at home and abroad. Agriculture is
the mainstay of the economy, and cotton, fish and peanuts are the major export products.
The government has implemented fiscal stimulus to cushion the impact of the
global crisis, but that has kept the fiscal deficit high. As the economy was expected to
rebound in 2010, the fiscal stimulus will need to be gradually withdrawn to ensure
medium-term fiscal and debt sustainability.
As foreign direct investment inflows, industrial and agricultural output and public
works accelerate; The EIU forecast real GDP growth of 4.3% and 4.5% in 2011 and 2012
respectively. Unreliable power supply will remain a key risk.
Uncertainties about the short-term outlook persist. Risks to growth mainly relate
to sluggish external demand, financing constraints that limit the fiscal room for
maneuver, and renewed problems with electricity supplies. Opportunistic changes in
economic policies for political reasons could also dampen growth prospects. On the
positive side, a faster than expected pickup in global activity could have positive spillover
effects.
MALI
Mali is among the poorest countries in the world. Agriculture is the mainstay of
the economy, and cotton, gold, and livestock make up nearly 90 percent of total export
earnings. Heavy dependence on the few export products leaves the economy vulnerable
to adverse weather conditions and fluctuations in world commodity prices.
The global economic crisis has had only a limited impact on Mali, and GDP
growth has remained strong, supported by good rains and buoyant gold exports. The main
policy challenge over the medium term is to address the projected decline of the mining
sector, in particular gold mining, which would constrain economic growth.
Declining proceeds from gold mining are a source of concern for the government,
as they represent around 15% of total revenue, but total revenue is nonetheless expected
to increase slightly in 2011-12 owing to a moderate improvement in tax administration,
buoyant gold prices in 2011 (although they are expected to ease in 2012) and robust
economic growth.
Real GDP growth will accelerate from an estimated 5.1% in 2010 to 5.3% in 2011
and 5.7% in 2012, supported by the construction and agricultural sectors as well as new
mining investment. Elevated gold prices will help to pare back the current-account deficit
to 9% of GDP in 2011.
NIGERIA
The global crisis has had a significant impact on Nigeria's economy, with lower
oil prices putting pressure on the fiscal and external accounts.
Arguably the greatest challenge will be to find a solution to Nigeria’s grave
electricity supply problems. Until the private sector becomes fully involved, the
government has committed itself to large subsidy payments to keep electricity prices low
for end-users.
Although uncertainty related to elections and the global economy may affect
growth levels in 2011, Nigeria is expected to enjoy a period of robust economic
expansion averaging over 6.5% per year over the forecast period. However, this is below
the double-digit levels needed if the country is to meet the goal of becoming one of the
world's top 20 economies by 2020. This is primarily a result of the dire state of Nigeria's
infrastructure, notably the electricity supply. Furthermore, continuing flare-ups of
political unrest in the Niger Deltaódespite the expectation of increased efforts by the
government to find a solution to some of the issues involvedówill constrain growth in the
vital oil and gas sector throughout the forecast period. There will, however, be some
increases in oil and gas production as new deepwater oilfields open or expand. These are
less susceptible than the onshore fields to action by militias, but they will not be immune.