BDC Snapshots: Intra-regional economic integration would boost Maghreb economies

The economic implications of the coronavirus pandemic have raised questions about the prospects for economic integration within the Maghreb, which has one of the lowest percentages of intra-regional trade in the world.

In 2019, trade between Mauritania, Morocco, Algeria, Tunisia, and Libya stood at 2.8 percent of the group’s total, compared to 57.4 percent with the rest of Africa, and 97.2 percent with the rest of the world. This was the second lowest intra-group percentage of six major blocs in Africa (see Figure). The Maghreb also underperforms compared to the Gulf Cooperation Council (10.7 percent). Lack of economic integration within the Maghreb is a long-standing issue that can be attributed to hostility between Algeria and Morocco and logistical constraints, such as trade protection, that make it difficult for Maghreb companies to do business across the region. Yet, Maghreb states have the required economic structures and resources to boost intra-regional integration by reforming investment and trade policies, liberalizing services, and implementing free movement of goods. Deeper economic integration would make the bloc a more attractive and stable trade partner, allow it to enter into tripartite trade agreements with European and Sub-Saharan African countries, and could open the door for intra-regional cooperation in other important areas such as counterterrorism and migration.

^{Source: United Nations Conference on Trade and Development, “Merchandise: Intra-trade and extra-trade of country groups by product, annual, 2019,” accessed March 3, 2021, https://unctadstat.unctad.org/wds/TableViewer/summary.aspx.}