Growth of Private Sector in the MENA
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Growth of Private Sector in the MENA

In the Middle East and North Africa (MENA), the development of a vibrant private sector is essential for delivering the inclusive growth that is needed to meet the needs and aspirations of the people.

Over the last few years, the Middle East and North Africa (MENA) region has witnessed an unprecedented transformation. In the Arab Uprisings, thousands of young people took to the streets to voice their frustration with the lack of economic and social opportunities. These events reflected demands for improvements in living conditions, infrastructure, job quality, education, and healthcare services, as well as better governance.

The Arab Uprisings were a response to the failure of the region’s economic models to satisfy people’s needs and expectations. These models typically featured strong protectionism, lack of integration into international markets, misguided state intervention, and inadequate support for a business environment that fosters innovation, entrepreneurship, and good management practices.

Enhancing the prospects for more inclusive growth—with accessible opportunities for sustainable employment, particularly for young people and women—is vital to raise living standards, underpin stability, and offer an alternative to economic migration out of the region. There is an overwhelming consensus among economists that the development of a vibrant private sector is essential for delivering that growth. Creating an environment that is conducive to private sector development depends on a detailed understanding of the key drivers of private firms’ performance and the major challenges of the business environment in which they operate.

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Growth in MENA

Though the formal private sector represents a relatively small part of these economies, it does have the potential to become a powerful driver of job creation and rising living standards. However, creating an environment conducive to private sector development depends on a detailed understanding of the key determinants of firm performance and the major challenges that firms face. The survey provides detailed information on more than 6,000 private firms in the manufacturing and services sectors, investigating topics ranging from access to finance, employment, skills, trade, innovation, and competitiveness, as well as more general impediments to business performance.

Mounting debt and limited fiscal capacity have challenged the role of the state in the region. But challenging times provide opportunities for positive change. There is a chance for the MENA private sector to seize this moment. It remains the hope for many young people for their future and, while its role as the engine of growth has yet to be realized, the private sector has the potential to drive a greener region with a sustainable model of growth. This report sheds light on the state of the MENA private sector through surveys of over 5 800 formal businesses across six MENA economies — Egypt, Jordan, Lebanon, Morocco, Tunisia, and the West Bank and Gaza — conducted between late 2018 and 2020, largely before the pandemic.

That report shares a detailed perspective on the Growth of the Private Sector in the MENA Region:

to access detailed statistics, you can visit here.

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