meed-logo

line1 line2 line3
SIGN IN / REGISTER

Maghreb economies battle trading headwinds

8 July 2025

 

Investors in Morocco’s stock market are enjoying a strong bull run. In the first six months of this year, the Moroccan All Shares Index gained 24%, following a 22% rise last year. It hit a record close of 18,690 points in early June this year and, after a brief dip, was growing strongly again in early July, threatening to break through the 19,000-point barrier for the first time.

A combination of low interest rates and strong performances from local companies is helping to boost the market. There is also optimism sparked by the country’s role as a co-host of the 2030 football World Cup (alongside Spain and Portugal) and all the infrastructure spending that will flow from that.

The country’s relative economic strength is also reflected in project activity. Of the 749 projects currently planned or under way across the Maghreb region, 322 are in Morocco, according to data from MEED Projects. The leading sectors are power and water, transport and construction.

There are, though, reasons for caution. While Morocco’s stock market traders may have been doing well, all the Maghreb economies are facing some tricky international trading conditions, which could become more severe in the coming months and years.

Of the 749 projects currently planned or under way across the Maghreb region, 322 are in Morocco, according to data from MEED Projects

Global headwinds

Weak economic conditions in Europe, the region’s most important trading partner, pose a particular threat. Key markets, such as France, Germany and Italy, are experiencing anaemic growth rates, which could lead to softer demand for the Maghreb region’s exports, as well as weaker tourism and investment flows across the Mediterranean.

The imposition of tariffs by US President Donald Trump is also having a negative impact. However, the chaotic way in which the policy is being enacted means it is unclear just how much pain the duties might ultimately cause. Algeria, Libya and Tunisia look set to be worst affected, with tariff rates of 28-31% on their exports to the US, compared to 10% for Morocco.

The region’s direct trade with the US is relatively limited, but if higher tariffs dent global demand, that could have a larger impact on more export-oriented economies such as Morocco and Tunisia.

Oil market trends are likely to add to the pressure on Algeria and Libya this year, as producers continue to ramp up output. On 5 July, the eight Opec+ countries – which include Algeria, Saudi Arabia and the UAE – agreed to produce an additional 548,000 b/d from August. That will put further downward pressure on oil prices.

“A sharp drop in activity in emerging markets will be a negative for global oil demand for the rest of 2025 and into 2026,” said Edward Bell, chief economist of the Dubai-based bank Emirates NBD on 7 July. “Just the fear of policy uncertainty will be enough to limit investment.”

Other issues are also hard for the Maghreb countries to control. For example, the frequent droughts of recent years have dented agricultural activity and exports.

Among other challenges, most governments are running budget deficits and are struggling to create enough jobs for their growing populations. Unemployment in Morocco remains at around 13%, according to the IMF. It is in double figures in neighbouring countries too, according to the International Labour Organisation; Libya’s unemployment rate is probably nearer 20%.

Inward FDI into Algeria rose by 18% last year to reach $1.4bn, while in Tunisia it was up 21% to $936m and in Morocco it increased 55% to $1.6bn

Rising resilience

The Maghreb region is nevertheless showing signs of resilience, despite the various negative pressures. Inflation has been easing back in most countries in recent years and foreign direct investment (FDI) has been growing strongly.

According to the latest Unctad World Investment Report, inward FDI into Algeria rose by 18% last year to reach $1.4bn, while in Tunisia it was up 21% to $936m and in Morocco it increased 55% to $1.6bn.

A few industries are attracting some large investment deals, with Gulf money often to the fore. The UAE, for example, is helping to finance a 7,000-kilometre, $25bn gas pipeline from Nigeria to Morocco. A consortium of the UAE-based Masdar, Egypt’s Infinity and Germany’s Conjuncta is also backing a $34bn green hydrogen project in neighbouring Mauritania.

More recently, albeit on a far smaller scale, the Saudi Fund for Development signed a $38m loan agreement on 27 June this year to set up the Oasis Hub Project in southern Tunisia, which includes rural housing, infrastructure and agriculture schemes.

Some big projects have come unstuck, though. A plan by UK-based Xlinks to export power from Morocco to the UK via a 4,000km subsea cable has lost the support of the London government. On 26 June, junior energy minister Michael Shanks told the UK parliament it had decided the project was “not in the UK national interest at this time”.

There was disappointment in Morocco at the turn of events. In the short term, however, economic growth this year is expected to be a healthy 3.9% in Morocco and 3.5% in Algeria – equal to or better than last year, according to IMF data. Mauritania is expected to grow by 4.4%, which is less than in recent years, but still ahead of its neighbours.  

Tunisia is expected to lag behind, at just 1.4%, as the country’s authoritarian leadership struggles to come up with a viable economic model. A draft of the 2026-30 development plan has been promised before the end of the year by the Ministry of Economy and Planning secretary-general, Faouzi Ghrab. Libya’s outlook depends on domestic political factors that look as far from resolution as ever.

Morocco, meanwhile, is intent on solidifying its position as a regional industrial and financial hub, with its thriving stock market serving as an important lever. It is still ranked as a frontier market by index company MSCI, but is hoping for promotion to emerging market status.

The launch of derivatives trading in May is part of efforts to attract more liquidity and secure that higher ranking. Some simpler reforms might also be useful – MSCI pointed out in a June report that stock market information was not always readily available in English, which hindered its accessibility.

Yet, if the market continues to grow as rapidly as it has recently, investors are likely to find a way to address such shortcomings.

Slow year for Maghreb power and water awards

https://image.digitalinsightresearch.in/uploads/NewsArticle/14219130/main.gif
Dominic Dudley

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Gulf projects index enters 2026 upbeat

    27 January 2026

     

    MEED’s Gulf Projects Index expanded for the 10th consecutive month in the four weeks from 12 December to 9 January, rising by 1.3% or $62.5bn in value, driven by market developments in the UAE and Saudi Arabia.

    In the UAE, the market expanded by 2.8%, adding $31bn in value as a spate of new projects were initiated. These included the $8.1bn Mercedes-Benz Places real estate scheme announced by Dubai developer Binghatti and a $5bn expansion of Al-Maryah Island launched by Abu Dhabi’s Aldar and Mubadala. Dubai-based Aark Developers revealed plans for the $1.4bn Karl Lagerfeld Residences on Al-Marjan Island in Ras Al-Khaimah, while Adnoc Refining began front-end engineering and design for a $1.5bn naphtha-to-jet fuel project.

    In Saudi Arabia, the overall size of the market in terms of tracked projects expanded by 1.1% to $22.5bn – contrasting with the slight slackening of project award activity in the kingdom in 2025.

    The key projects behind the increase included an $11.6bn, 15-year commitment by China’s Xincheng Jiao Technology to invest in vehicle manufacturing in Jizan; an estimated $2.8bn solar plant to be developed by Bapco and Acwa Power; a $1.4bn Dammam data centre scheme under design by Khazna; and various other new project developments, alongside the tendering of four offshore oil and gas contracts by Saudi Aramco.

    The Bahraini market then saw the revival of the study process for the Qatar-Bahrain causeway, adding $4bn in active value to the index, while the Omani market witnessed the launch of the $4bn Muscat Marine, Art & Digital District project. 

    The other Gulf markets either recorded little change, or, in the case of Qatar and Iran, saw minor contractions. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15521064/main.gif
    John Bambridge
  • Sobha announces Sobha Sanctuary project in Dubai

    26 January 2026

    Dubai-based private real estate developer Sobha Realty has announced the launch of Sobha Sanctuary, its largest master-planned development in Dubai.

    The site covers about 37.5 million square feet and is planned to serve around 20,000 families.

    The project will include about 20,000 residential units, comprising 18,000 apartments and 2,000 villas.

    The development will be delivered in phases. The first phase includes 250 villas.

    Sobha Sanctuary is planned as a mixed-use development, with a hospital, two international schools, retail areas and a wellness centre.

    The development will also include a central park, as well as a community mall with retail and dining outlets. The park will include facilities such as football grounds, running tracks, padel courts and a skate park.

    Green corridors will connect the park to the wider site. A 6-kilometre (km) loop will run through the community, connecting to a larger mobility loop and a 9km wellness loop around the perimeter.

    The latest announcement follows the launch of two other projects in the UAE, as MEED reported in October last year.

    The developer announced the launch of Sobha AquaCrest, its second residential development within the Downtown Umm Al-Quwain masterplan.

    The development, located in the northern emirate of Umm Al-Quwain, comprises five residential towers with a mix of one-, two- and three-bedroom apartments and duplexes.

    Sobha is also planning to build a 450-metre-tall residential tower called Sobha SkyParks on Dubai’s Sheikh Zayed Road.

    The tower will have 109 floors and will be the tallest development in Sobha Realty’s portfolio.

    The development will offer more than 684 residential units.

    READ THE JANUARY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Saudi Arabia courts real estate investment; EVs and battery production are key regional tech themes; Muscat holds a steady growth course despite headwinds

    Distributed to senior decision-makers in the region and around the world, the January 2026 edition of MEED Business Review includes:

    > ECONOMIC ACTIVITY INDEX: UAE and Qatar emerge as markets to watch
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/15512604/main.jpeg
    Yasir Iqbal
  • Winter Games delay raises uncertainty for Saudi construction

    26 January 2026

    Commentary
    Yasir Iqbal
    Construction writer

    Saudi Arabia’s decision to postpone the 2029 Asian Winter Games at Trojena can be viewed as the first officially acknowledged crack in the kingdom’s gigaproject ambitions.

    Although the delay may be nothing more than pragmatic schedule management, in a market already sensitive to signals, an official postponement could have wider repercussions.

    The Asian Winter Games is an international event that requires a greater level of transparency than many other projects in the kingdom. The award of the games, and the decision to postpone it, was made following a formal process involving the Olympic Council of Asia, meaning what might otherwise have been managed quietly and internally becomes a global announcement. 

    The delay raises questions about the future of projects already under execution at Trojena. This includes projects from dams, tunnels and other major infrastructure works to high-profile assets such as the Vault. A postponed anchor event does not automatically mean construction stops, but it will trigger uncertainty across the supply chain that some packages could be deferred, resized or, in a worst-case scenario, cancelled.

    For the broader Saudi construction market, the delay heightens uncertainty about the future of other projects that may also be delayed. If investors and contractors start assuming that postponements are the new normal, bidding appetite, pricing and delivery risk premiums can all shift.

    The fear is that delaying the Winter Games will trigger other high-profile cancellations. While that might not necessarily be the case, it could accelerate a sorting process. Projects that are less central to the national interest may find themselves competing harder for capital.

    The industry will also point to the broader backdrop. According to data from regional project tracker MEED Projects, the value of contracts awarded on the kingdom's gigaprojects dropped by over 62% last year, from about $35bn in 2024 to $13bn in 2025, thus making the rescheduling feel more consequential.

    Many in the industry will also argue that the decision is logical when other major events to be hosted by Saudi Arabia are considered. When Trojena was selected as the venue for the Asian Winter Games in 2022, Saudi Arabia had yet to secure the rights to host Expo 2030 and the 2034 Fifa World Cup. Those two large-scale events are much more high profile than the Winter Games, and also reset national priorities along with plans for capital allocation.

    Ultimately, the Asian Winter Games are peripheral compared to the global weight of Expo 2030 and the 2034 World Cup. If confirmations on those two events had come before 2022, it is likely that Saudi Arabia would not have bid to host the event in the first place.

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15512027/main.jpg
    Yasir Iqbal
  • UAE firm withdraws Yemen solar operations

    26 January 2026

     

    UAE-based Global South Utilities (GSU) has completed the handover of the Aden and Shabwa solar power plants to Yemen’s Public Electricity Corporation, following an official request by Yemeni authorities for the withdrawal of all UAE companies from the country.

    The move comes amid Yemen’s ongoing political fragmentation and security challenges, which have complicated foreign commercial and infrastructure operations in the country.

    In a letter dated 22 January 2026, GSU said it had evacuated all operations and maintenance teams from the 120MW Aden solar plant and the 53MW Shabwa solar plant.

    Both facilities were handed over fully operational and placed under the authority of the state-owned utility.

    GSU operates solar power plants in Yemen with a combined capacity of 173MW. The company said the withdrawal of its technical teams was carried out to ensure personnel safety and to enable a structured and responsible transfer of assets.

    “Global South Utilities did not suspend operations unilaterally or abruptly,” the company said. “Both power plants were handed over while operating at full technical capacity, under a formal handover process.”

    GSU added that continuing to operate large-scale power facilities without specialised technical teams on the ground would pose operational risks and would not meet internationally recognised standards for energy facility operations.

    Several projects are at advanced stages of development and have been paused following the company’s exit from the Yemeni market, including:

    • Al-Mokha – phase 2 (40MW): 85% complete
    • Al-Khokha (10MW): 80% complete
    • Hays (10MW): 75% complete
    • Socotra (10MW): 35% complete (civil works and procurement)
    • Aden expansion (120MW): 35% complete (civil works and procurement)

    In November, GSU announced $1bn-worth of new energy projects in Yemen to support the rebuilding of the country’s electricity sector.

    The programme was expected to be delivered through solar and wind energy projects, battery energy storage systems and the development of distribution networks.

    According to GSU, its $1bn energy project portfolio in Yemen covers 13 projects across six governorates, with a combined capacity exceeding 1,000MW.

    In August, GSU began work on a 120MW expansion of the Aden solar photovoltaic plant, doubling its capacity to 240MW. The plant began operations last year with a 120MW first phase.

    At the time, the company said phase two would begin commercial operations in 2026.

    READ THE JANUARY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Saudi Arabia courts real estate investment; EVs and battery production are key regional tech themes; Muscat holds a steady growth course despite headwinds

    Distributed to senior decision-makers in the region and around the world, the January 2026 edition of MEED Business Review includes:

    > ECONOMIC ACTIVITY INDEX: UAE and Qatar emerge as markets to watch
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/15511888/main.jpg
    Mark Dowdall
  • Saudi Arabia postpones 2029 Trojena Asian Winter Games

    26 January 2026

    Register for MEED’s 14-day trial access 

    Saudi Arabia has confirmed the postponement of the 2029 Asian Winter Games, which were scheduled to be held at the Trojena mountain destination in Neom, in the northwest of the kingdom.

    The confirmation came on 25 January, when the Olympic Council of Asia (OCA) and the Saudi Olympic & Paralympic Committee (SOPC) released a joint statement saying that they have agreed to indefinitely postpone the event.

    The OCA and SOPC have yet to announce a revised timeline or confirm whether another country will now host the event.

    In October 2022, Trojena was chosen to host the Asian Winter Games in 2029, as MEED previously reported.

    Construction is progressing on the Trojena Ski Village project; however, the overall infrastructure required for the venue to be ready remains behind schedule.

    The most recent edition of the Asian Winter Games was held in February last year in the city of Harbin, China.

    Japan held the first edition in 1986 and went on to host four of the previous editions of the event.

    China has hosted three editions, while South Korea and Kazakhstan have each hosted the games once.

    South Korea staged the Winter Youth Olympics in 2024, using mostly the same venues built for the 2018 Winter Olympics in the eastern province of Gangwon.

    In August last year, MEED reported that high-level discussions had started regarding changing the 2029 Asian Winter Games venue, possibly from Saudi Arabia to South Korea. 

    According to reports in South Korean media, citing a senior Korean Sport & Olympic Committee official, the OCA had contacted the Korean Sport & Olympic Committee about the possibility of hosting the event.

    The report added that the meeting was followed by an official letter sent by the OCA to South Korea.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15511718/main.jpg
    Yasir Iqbal