North African countries continue to demonstrate economic resilience despite exposure to global tariff uncertainties and regional conflicts, particularly the ongoing Israel-Iran tensions, which raise concerns around regional stability and trade efficiency, potentially undermining government revenues.
Nevertheless, the region is benefiting from robust capital inflows, highlighting strong investor appetite for North African markets. For example, as of June 2025, Morocco had recorded a 60% year-over-year (y/y) increase in net foreign direct investment (FDI) inflows. Key sectors attracting investment include renewable energy, infrastructure development, agriculture, and manufacturing, especially the automotive sector, as governments prioritise these industries in their medium-term development plans.
Egypt recently signed a contract with POWERCHINA to construct a 130-kilometre, 500 kV transmission line to efficiently transport electricity from desert-based solar and wind farms to urban centres. The project aligns with the country’s target of achieving 42% renewable energy by 2030.
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