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
  • Emaar appoints contractor for Dubai Creek Harbour tower

    22 August 2025

     

    Register for MEED’s 14-day trial access 

    UAE firm Engineering Contracting Company has won a contract to build the Palace Residences Creek Blue residential development at Dubai Creek Harbour.

    The 50-storey tower is located in the second phase of the development's Bridge District and covers an area of over 98,000 square metres.

    The contract was awarded by Dubai-based real estate developer Emaar Properties.

    Dubai-headquartered Mirage is the project consultant.

    Construction work has started, with local firm Dutch Foundation carrying out the enabling works.

    The project is scheduled for completion by 2028.

    In March, MEED reported that Emaar Properties was set to relaunch its efforts to build Dubai Creek Tower – which was once touted to become the world’s tallest tower – along with a mall in Dubai’s Creek Harbour area.

    According to local media reports, the firm has earmarked a budget of about AED14bn ($3.81bn) to develop both projects.

    The developments are fundamental to Emaar’s plans to spend about AED65bn ($18bn) over the next five years.

    Dubai’s heightened real estate activity has led to record-breaking announcements from several UAE-based real estate firms. 

    In February, Emaar reported a total revenue of AED19.1bn ($5.2bn) in 2024, a 61% increase from 2023. It said it recorded a net profit before tax of about AED10.2bn ($2.8bn), a 20% rise compared to 2023.

    According to a report published by Emirates News Agency (Wam) earlier this year, the total value of real estate transactions reached AED893bn, with over 331,300 transactions recorded in the UAE last year.

    UK analytics firm GlobalData forecasts that the UAE construction industry will register an annual growth of 3.9% in 2025-27, supported by investments in infrastructure, renewable energy, oil and gas, housing, industrial and tourism projects.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14521666/main.png
    Yasir Iqbal
  • Kuwait to meet with UN for oil project approvals

    22 August 2025

     

    Register for MEED’s 14-day trial access 

    State-owned upstream operator Kuwait Oil Company (KOC) has scheduled a meeting with the UN in the second week of September as it seeks approvals to extend two oil remediation projects.

    The contractors involved will be given an additional volume of polluted soil to clean and an extra 18 months in which to complete processing, according to industry sources.

    The two Kuwait-based contractors that have been provisionally awarded contract extensions are Khalid Ali Al-Kharafi & Brothers Company and Heisco.

    The contract extensions are each worth about $30m and have already been approved by KOC.

    They also need approval from the UN as the project is being funded through money that was awarded to Kuwait by the UN Compensation Commission (UNCC) to allow Kuwait to address ecological damage resulting from the 1990-91 Gulf War.

    The contract extensions are for contracts that were awarded though the Kuwait Environmental Remediation Programme (Kerp) in 2021.

    Kerp is the world’s biggest project to clean up oil pollution.

    More than 30 years after the UNCC was created to ensure restitution for Kuwait following the Iraqi invasion of 1990, the reparations body announced in February 2022 that it had processed its final claim, amounting to $52.4bn in total.

    Kerp itself is understood to be deploying about $3.5bn of the reparation funds, cleaning up the damage caused by oil spills related to the war.

    The project to clean up all of the crude that was spilled as a result of the war stalled for decades due to the unique challenges that the clean-up project poses, but in recent years there has been a surge in activity, with major tenders and contract awards.

    The project has been divided into three main project areas, which are known as North Kuwait Excavation Transportation Remediation (NKETR), South Kuwait Excavation Transportation Remediation (SKETR) and South Kuwait Excavation Transportation Remediation 2 (SKETR-2).

    The original contracts that were awarded to Khalid Ali Al-Kharafi & Brothers Company and Heisco were:

    • NKETR A – Sabria: Kharafi (Kuwait)/Lamor (Finland) – $194m
    • SKETR A – Greater Burgan: Kharafi/Lamor – $197m
    • SKETR B – Greater Burgan: Heisco (Kuwait) / Zaopin Hangzhou (China) – $185m

    The extensions are being added to existing contracts after additional volumes of polluted soil were discovered by Kuwait last year.

    In October 2024, MEED revealed that KOC had discovered an extra 5 million tons of contaminated soil.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14519954/main.jpg
    Wil Crisp
  • Frontrunner emerges for Dorra gas project offshore package

    21 August 2025

     

    Based on an initial evaluation of bids by Al-Khafji Joint Operations (KJO), a frontrunner to win the main contract for an offshore engineering, procurement and construction (EPC) package of the Dorra gas field facilities project has emerged.

    KJO has divided the scope of work on the project into four EPC packages – three offshore and one onshore.

    The scope of work on offshore package one covers the EPC of seven offshore jackets and laying of intra-field lines.

    Contractors submitted bids for the first offshore package by a deadline of 2 June, it was previously reported.

    Indian contractor Larsen & Toubro Energy Hydrocarbon (L&TEH) has pulled ahead in the race to win the contract for package one of the Dorra project, according to sources.

    L&TEH has emerged as the favourite based on “early bid evaluation”, and the situation could change “in the coming days” as KJO engages in further discussions and negotiations with the bidders, one source said.

    KJO is expected to select a contractor for the package by the end of August, another source said.

    The following contractors are understood to be among those bidding for the three offshore packages of the Dorra gas field offshore and onshore facilities project:

    • Lamprell (Saudi Arabia/UAE)
    • Larsen & Toubro Energy Hydrocarbon (India)
    • McDermott (US)
    • NMDC Energy (UAE)
    • Saipem (Italy)

    MEED reported in March that KJO was pushing forward with a major project to produce gas from the Dorra offshore field, located in Gulf waters in the Neutral Zone shared by Saudi Arabia and Kuwait.

    Contractors are currently working towards a bid submission deadline of 15 September for the project's other three EPC packages, offshore packages 2A and 2B and onshore package three, according to sources.

    The previous bid submission deadlines for the three packages were 30 June, 31 July and 25 August.

    The EPC scope of work on the packages of the Dorra gas field offshore and onshore facilities project is as follows:

    Package 2A – Dorra gas field wellhead topsides, flowlines and umbilicals

    • Seven gas wellhead platforms or topsides, with production routed to the central gathering platform
    • Corrosion-resistant, alloy-lined intra-field flowlines and umbilicals connecting the gas wellhead platforms to the central gathering platform and the auxiliary platform

    Package 2B: Dorra central gathering platform complex, export pipelines and cables

    • Central gathering platform
    • Auxiliary platform
    • Dorra accommodation platform
    • Flare platform
    • Bridge platform
    • Pipelines for gas and condensate transmission to each shareholder
    • Produced water pipeline from the central gathering platform to Al-Khafji field and from the planned onshore processing facility next to the Al-Zour refinery in Kuwait to Al-Khafji field
    • Recovered monoethylene glycol (MEG) pipeline from Al-Khafji field to the central gathering platform
    • Control and power system linking Al-Khafji onshore facilities to offshore units
    • Offshore central control room at Dorra accommodation platform

    Package 3: Onshore gas processing facilities

    • Buildings to be constructed as part of KJO’s Dorra project onshore package include:
      • Dorra control building
      • Operator building
      • Operations, maintenance and engineering building
      • Process interface building
      • Onshore 115/69kV substation
      • Two gas insulated substations
      • Warehouse
      • Maintenance building
      • Mosque
      • Telecommunications tower radio building
      • Beach valve substation at the planned onshore processing facility next to the Al-Zour refinery in Kuwait
         
    • Processing facilities for KJO's onshore package:
      • Produced water receiving and treatment
      • Sour water stripping and treated water system
      • Rich MEG storage tank
      • MEG regeneration and reclamation
      • Recovered hydrocarbons system
      • Lean MEG storage and supply
      • Fresh MEG storage and supply
      • Beach valve stations at Al-Khafji and Al-Zour
         
    • Utilities:
      • Instrument and plant air system
      • Nitrogen generation system
      • Diesel storage and distribution system
      • Fuel gas system
      • Closed drain and slop tank system
      • Hazardous area open drains system
      • Industrial water system
      • Drinking water system
      • Flare gas recovery system and a low-pressure flare system
      • Fire water system
      • Emergency diesel generator
      • Sewage treatment

    The Dorra field is estimated to hold 20 trillion cubic metres of gas and 310 million barrels of oil.

    Kuwait and Saudi Arabia have been working together to develop the offshore field since it was discovered in 1965. The two sides expect to produce about 1 billion cubic feet a day of gas from the asset and have agreed to split the gas output equally.

    A geopolitical tussle over ownership of the asset has hampered progress.

    Iran, which calls the field Arash, claims that it partially extends into its territory and that Tehran should be a stakeholder in any development project. 

    Kuwait and Saudi Arabia maintain that the Dorra field lies entirely in the waters of their shared territory, known as the Neutral Zone or Divided Zone, and that Iran has no legal basis for its claim. 

    In February 2024, Kuwait and Saudi Arabia reiterated their claim to the Dorra field in a joint statement issued during an official meeting in Riyadh between Kuwaiti Emir Sheikh Mishal Al-Ahmad Al-Jaber Al-Sabah and Saudi Crown Prince and Prime Minister Mohammed Bin Salman Bin Abdulaziz Al-Saud.

    KJO, which is jointly owned by Saudi Aramco subsidiary Aramco Gulf Operations Company and Kuwait Gulf Oil Company, a subsidiary of state-owned Kuwait Petroleum Corporation (KPC), is understood to have issued the tenders for the project in August 2024.

    MEED reported in September 2023 that Aramco and KPC had selected France’s Technip Energies to carry out front-end engineering and design (feed) and pre-feed work on the Dorra offshore field development project.

    The original feed work for a project to develop the field was performed more than a decade ago. However, due to changes in technology, the engineering design needed to be updated before the project could reach a final investment decision.

    ALSO READ: Saudi Arabia and Kuwait announce Neutral Zone oil discovery

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14513682/main.jpg
    Indrajit Sen
  • Project manager confirmed for Riyadh Metro Line 2 extension

    21 August 2025

     

    Register for MEED’s 14-day trial access 

    Riyadh Metro Transit Consultants (RMTC), a joint venture of US-based Parsons and French engineering firms Egis and Systra, has been confirmed as the project management and construction supervision consultant for the recently awarded Riyadh Metro Line 2 extension.

    RMTC previously served as the project management and construction supervision consultant for lines one, two and three of the Riyadh Metro scheme.

    The Line 2 extension is 8.4 kilometres (km) long, of which 1.3km is elevated and 7.1km is underground. It includes five stations – two elevated and three underground.

    The extension will run from the current Line 2 terminus at King Saud University (KSU), continuing to new stations at KSU Medical City, KSU West, Diriyah East, Diriyah Central – where it will interchange with the planned Line 7 – and finally Diriyah South.

    In July, MEED exclusively reported that Saudi Arabia’s Royal Commission for Riyadh City (RCRC) had awarded an estimated $800m–$900m contract for the next phase of the Riyadh Metro project.

    The contract was awarded to the Arriyadh New Mobility Consortium.

    According to the consortium’s official website, its members include Italy’s Webuild, India’s Larsen & Toubro, Saudi firm Nesma & Partners, Japan’s Hitachi, Italy’s Ansaldo STS, Canada’s Bombardier, Spain’s Idom and Australia’s WorleyParsons.

    In 2013, the Arriyadh New Mobility Consortium secured the Line 3 contract for $5.21bn.

    Line 3, also known as the Orange Line, runs east to west from Jeddah Road to the Second Eastern Ring Road, covering 41km.

    Riyadh Metro

    Riyadh Metro’s first phase features six lines with 84 stations.

    The RCRC completed the phased rollout of the Riyadh Metro network with the launch of the Orange Line on 5 January.

    In December last year, the RCRC started operating the Red Line and Green Line.

    The Red Line, also known as Line 2, stretches 25.1km from the east of Riyadh to the west, via King Abdullah Road, connecting King Fahd Sports City and King Saud University. It has a total of 15 stations.

    The Green Line, also known as Line 5, extends 13.3km from King Abdullah Road to the National Museum. With 12 stations, it serves several ministries and government agencies, including the Defence Ministry, the Finance Ministry and the Commerce Ministry, as well as other areas.

    In December, the RCRC started operating the Blue Line (Line 1), Yellow Line (Line 4) and Purple Line (Line 6).

    The Blue Line connects Olaya Street to Batha; the Yellow Line runs along King Khalid International Airport Road; while the Purple Line connects Abdul Rahman Bin Awf Road with Al-Sheikh Hassan Bin Hussain Road.

    King Salman Bin Abdulaziz Al-Saud inaugurated the Riyadh Metro on 27 November last year.

    The network spans 176km. Four of the stations have been designed by signature architects.

    The metro is part of the Riyadh Public Transport Project, which encompasses metro and bus systems. The project aims to relieve traffic congestion.

    The $23bn project was scheduled to open in 2018, but construction activity slowed due to disputes over prolongation and the disruption caused by the Covid-19 pandemic.

    The RCRC awarded the main construction packages for the scheme on 28 July 2013.

    In November 2022, the RCRC struck a deal with three contracting consortiums working on the Riyadh Metro scheme regarding the completion of the project’s remaining works.

    The Fast consortium won lines 4, 5 and 6, reportedly valued at $7.82bn. The Bacs consortium was awarded lines 1 and 2 for $9.45bn, while Arriyadh New Mobility secured Line 3 for $5.21bn.

    US firm Bechtel leads the Bacs consortium. Italian firm Ansaldo STS is the leader of the Arriyadh New Mobility group, and Spanish firm FCC Construccion heads the Fast consortium.

    AtkinsRealis has delivered programme management and supervision services for the operations and maintenance of the Riyadh Metro scheme.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14512676/main.jpg
    Yasir Iqbal
  • Turner & Townsend to manage Abu Dhabi plant decommissioning

    20 August 2025

    Register for MEED’s 14-day trial access 

    Turner & Townsend has been appointed by Taqa Transmission to provide programme management consultancy services for the retirement of a power-generating plant in Abu Dhabi.

    The existing plant, located in the east of Abu Dhabi, has a capacity of 1,640MW and 1,200 megavolt-amperes reactive (MVAr), and is scheduled for decommissioning in 2029. An upgraded, energy-efficient plant will be developed in its place, with a focus on integrating solar and nuclear power into the network to support decarbonisation.

    Turner & Townsend said in a statemet that it will establish a programme management office and provide strategic support to expand and facilitate the upgrade of the region’s power transmission and distribution infrastructure.

    This work will enable the construction of new grid and switching stations and substations, cable corridors and cable works, capacitor banks and high-voltage overhead lines.

    Earlier this month, the UK-based firm announced its appointment to provide project and cost management services for a hyperscale data centre project in Dubai.

    The facility is being developed by Dubai-based Emirates Integrated Telecommunications Company (Du) on a 20,000-square-metre site in the emirate.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14504637/main1637.jpg
    Mark Dowdall