Middle East & Africa
all you need to know
In 2020, key economies in the Middle East and Africa were hit by a double shock, the pandemic and the resultant drop in oil prices. In Saudi Arabia, the state oil company Saudi Aramco saw a 44% drop in net income.
Crude exports fell by more than a million barrels a day at some points. This matters, because oil earnings account for 70% of export earnings and 50% of GDP.
Shifting to West Africa, a similar story unfolded in Nigeria. Revenues from oil and gas exports fell by 46% in 2020. Again, this is hugely significant, because oil and gas account for 86% of all of Nigeria’s export revenue. In 2020, Nigeria’s economy shrank by 2%.
The same happened in the UAE, with oil exports down 18% by the third quarter of 2020. In South Africa, which is heavily dependent on mineral rather than oil exports, the value of export earnings fell by 96% between the first and second quarters of 2020.
Looking at countries that aren’t dependent on a narrow range of commodities for their export earnings, Morocco’s GDP contracted by 7% in 2020 and Israel’s by 2.4%. In many countries, however, although the pandemic slowed the pace of economic growth, GDP never actually shrank and recession was avoided. This was the case in Egypt, Kenya, and Turkey.
By 2021, the economies of all the countries in this report were growing again. Growth rates vary from 2.5% in Nigeria to over 7% in Kenya. As with countries around the world, though, the wild card is the behaviour of the COVID-19 virus. At the time of writing, Kenya — for instance — has vaccinated just 2.1% of its population and has a population of 50 million.
As in other parts of the world, the nations of the Middle East and Africa were, as this report was being written, starting to see a rise in COVID-19 cases, following a drop in the spring of 2021. If this trend continues, and vaccination rates don’t accelerate, there is the potential not only for greater suffering but also for more economic dislocation and a delay in the recovery.
Quick facts about the region
Market conditions vary a great deal among the countries in this, very large, region. The good news is that all of the nations whose data is used in this report are growing again after a rocky 2020. Many of them have seen a significant increase in e-commerce volumes and uptake. For a merchant which is prepared to put effort into localisation, the markets in this region offer rich opportunities.