By Elizabeth M. Adetiba
A 2014 report by the International Labour Organization projects that within the next 5 years 11 million jobs will be added to the sub-Saharan African economy. A recent economic report from PricewaterhouseCoopers also echoes these findings: population growth is expected to double in many sub-Saharan African cities, making the region home to the world’s largest labor force.
North Africa, though, faces a bleaker economic outlook, with growth projections hovering around a million new jobs in the next 5 years, a tenth of the growth expected south of the Sahara. Although Sub-Saharan Africa’s population is considerably larger than that of North Africa, the latter reveled in economic prosperity for the better part of the last 3 decades; during that era Morocco even picked up the nickname “Africa’s Banker.”
This summer I interviewed Paul Rivlin, Senior Fellow at the Moshe Dayan Center for Middle Eastern and African Studies, as well as William Lawrence, Senior Fellow at the Project On Middle East Democracy. Mr. Lawrence’s first piece of advice was to refrain from viewing North and Sub-Saharan Africa as two separate regions of the same continent. Each region has a starkly different geopolitical history. North African countries like Morocco and Algeria foster stronger ties with their premier former colonizer, France, than sub-Saharan countries like Democratic Republic of Congo and Senegal. The region is also more heavily influenced by the trade policies of the European Union.
North Africa, or the “Maghreb” as it is often referred to, is still recovering from the sting of the 2008 economic crisis. As mentioned above, the Maghreb has always facilitated strong economic ties with many European powers (primarily due to the region’s geopolitical history) so when the European Union began to suffer, naturally, North Africa followed suit. But while the crisis contributed to political dysfunction in the West, it spurred full-blown revolutions in the Maghreb. Youth were conducting massive protests in the streets; dictators that had been ruling for decades were suddenly forced out of power.
To Lawrence and other experts, these revolutions confirmed what they already believed: “Authoritarian regimes aren’t good for creating jobs.” Certainly, this was the mindset that spurred the Arab Spring.
However as the region continues to struggle with political instability due to frequent coups and power vacuums, one could easily say the Arab Spring has caused more problems than it has fixed. Six years later as the U.S. inches towards full economic recovery, the Maghreb’s economic prospects are only becoming further entrenched in stagnancy. In fact, North Africa has the second-highest percentage of youth unemployment worldwide, the first being the Middle East. Lawrence describes regional instability as a driving force behind the plummet of the region’s economy. “…investors such as the International Monetary Fund, and markets in general, know that stable environments can produce jobs in many fields, such as healthcare and education,” he says.
Libya provides a practical example. The country has not yet caught relief from the unrest that led to the overthrow of longtime dictator Muammar Gaddafi. Mr. Lawrence claims that now that power is “up for grabs”, the fighting parties are desperately trying to win control of the country’s oil subsidies in order to secure control. Yet the continued civil war has prevented Libya from producing and exporting oil in over a year. The failure to export crippled what was left of its economy.
Both William Lawrence and Professor Paul Rivlin, contend that some of the other geopolitical issues North Africa faces, such as the rise of terror groups, may be much more difficult to solve, partly because these issues are, in Rivlin’s words “now proving to be continent wide.” As Nigeria and Somalia struggle with the likes of Boko Haram and al-Shabab, North Africa faces a huge threat from al-Qaeda in the Maghreb (AQIM) and its counterpart Ansar al-Sharia. In-fighting between AQIM has spurred the creation of breakaway groups who have adopted the Islamic State’s mission of establishing a caliphate within the region, while in Libya, Ansar al-Sharia constant attacks make the prospect of an end to the civil war bleaker and bleaker.
In recent months, Morocco has called for the countries in the region to resurrect the Arab Maghreb Union to aid in remedying the region’s economic troubles. However, the Arab Maghreb Union might not yield the best results. In Mr. Lawrence’s eyes the Union is “well-intentioned” yet largely undesirable. Trade agreements between two large unions (European and Arab Maghreb, respectively) face more scrutiny and regulations than trade agreements between one large union and an individual country. In essence, each country in the Maghreb can get more out of trade individually than as a Union, which nulls any motivation to strengthen the region’s economy as a whole. The Arab nationalist sentiment that once sought to unite various nations across the Middle East and North Africa has been ousted along with prior dictators.
The only feasible solution for the region, according to Lawrence, is to “tackle the internal and external” ailments. The region must work to address the flurry of political issues that lead to rampant instability, while international investors must remain committed to their stocks in this oil-rich region. This solution is currently playing out in Egypt. Despite having the 6th largest oil reserve in the continent, Egypt’s ongoing political strife (most recently the ousting of Mohamed Morsi’s government after only a year in power) has put most of its relations with investors and oil companies on ice. However Gulf Capital, based in the UAE, is one company that has chosen to increase its role in the Maghreb’s economy by investing 25 million in Egypt’s petroleum.
When asked to predict which North African country has the best chance of overcoming its internal and external troubles and move towards economic recovery, each had similar responses Mr. Lawrence does not think there is much “to be optimistic about with North Africa right now.” Professor Rivlin echoed those sentiments, yet he sees one unlikely country edging out the rest in the quest for economic recovery: Egypt. Why? Because “it simply can’t get any worse.” And with companies like Gulf Capital holding steadfast to their investments in the countries oil, Egypt might be able to work its way out of 8% inflation and 12.3% unemployment.
Yet in all of its instability and stagnation, the Maghreb teaches a powerful lesson on the success of 21st century revolutions in bringing about economic progress. While the world expected the region to flourish once dictators and oppressive governments were overthrown, what we saw were new governments failing to establish the political and economic reforms that led the people to support them initially. This only increased political dissatisfaction and opened the door to further instability, this time coupled with rampant terrorism. The question now is when, if ever, the region will succeed in securing the economic prosperity it desperately desires.
Elizabeth M. Adetiba is a student of Political Science, with a specialization in International Relations, at the University of Chicago.