Deteriorating diplomatic strife casts ominous shadow on Morocco-Algeria trade

Deteriorating diplomatic strife casts ominous shadow on Morocco-Algeria trade

Diplomatic strains between Morocco and Algeria have caused significant economic repercussions, severely impacting trade between the two neighboring countries.

Recent data from Morocco’s Foreign Trade 2022 report reveals a staggering 60% decline in trade exchanges, with the value falling to 2.5 billion dirhams. This worsening situation is a direct result of strained political ties and is casting a shadow over both nations’ economies within the Maghreb region.

A closer examination of these figures reveals a striking asymmetry. Rabat’s exports to Algeria dwindled by nearly 22 percent, with a value totaling 806 million dirhams.

On the flip side, Morocco’s imports from its eastern neighbor witnessed a colossal drop of more than 71 percent, settling at approximately 1.7 billion dirhams. This marked reduction in imports from Algeria over the course of 2022 was unearthed by data extracted from various sources, including the MoroccoLatestNews electronic newspaper.

Analyzing the trade balance figures further illuminates the enduring sway of Algeria’s economy over Morocco during the four-year period from 2018 to 2021. This four-year span clearly showcased Morocco’s exports to Algeria consistently falling short of its imports, thereby granting the Algerian economy a conspicuous edge.

Delving into the specifics of Moroccan exports to Algeria, it’s evident that the pinnacle of this trade interaction, within the four-year period, was reached in 2018, where exports totaled 2 billion dirhams.

In stark contrast, Morocco’s imports from Algeria during the same year soared to a peak of 6.9 billion dirhams, the highest recorded value.

The subsequent years saw a marked decline in the volume and value of bilateral trade, persisting until 2022.

The rupture in diplomatic relations between the two nations became acutely apparent in the summer of 2021, as Algeria’s unilateral decision to sever ties with Morocco sent seismic shockwaves across the region.

The repercussions of this decision materialized in the form of the non-renewal of the Maghreb-European gas pipeline contract, a conduit traversing Moroccan terrain. Notably, natural gas formed a significant component of Moroccan imports from Algeria.

As the trade landscape evolved, the decline in intra-regional commerce between Morocco and Algeria offered an opportunity for Tunisia to ascend in prominence.

The year 2022 witnessed Tunisia securing its position as the “primary trading partner of the Kingdom of Morocco” among the five members of the Maghreb Union. Following closely, Mauritania claimed second place, while Algeria slipped to third.

In terms of numerical values, Morocco’s intraregional trade with Tunisia burgeoned to exceed 4.3 billion dirhams, concurrently revealing Algeria’s descent to a distant third with a trade volume of 2.5 billion dirhams.

Mauritania solidified its position as the runner-up, boasting a trade volume with Morocco nearing 2.9 billion dirhams. Notably, Libya occupied the fourth position, with a trade volume of 1.8 billion dirhams.

In summation, Morocco’s trade activities with the Arab Maghreb Union countries, established under the Marrakesh Agreement in 1989, culminated in a trade volume of approximately 11.6 billion dirhams by the close of 2022.

Economic growth rate of each of the Maghreb countries continues to suffer, with an annual decline of 1 percentage point attributed to missed opportunities for economic integration and collaboration, particularly on the commercial front.

This stark reality was underscored by a comprehensive study conducted by the International Monetary Fund in 2019. The study, titled “Economic Integration in the Maghreb,” highlighted the glaring fact that the Maghreb market’s potential remains largely untapped, with less than 5 percent of the total trade volume among its countries comprising intra-trade.


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