On 4 February 2026 the IMF published a departmental paper with the title North Africa: Connecting Continents, Creating Opportunities, prepared by the IMF’s Middle East and Central Asia department. The publication of the departmental paper was timed to coincide with a conference in Algeria on the same subject. The study was published against the background of rising geopolitical tensions; changing trade and financial flows; reconfiguration of supply chains; and the energy transition. Also, the progress of technology, in particular the role of AI, is creating uncertainty.
These changes give North Africa an opportunity to deepen its cooperation, trade and integration with sub-Saharan Africa and Europe. The signing of Africa’s continental free trade agreement could be a driver of integration across the continent. The benefits of the agreement could spread to Europe, where countries are also looking at ways to make greater use of their resources.
Joint infrastructure projects could include digital connectivity projects or railway expansion to increase links across the regions. Economies of scale could improve logistical efficiency across the African continent. North Africa with its solar and wind resources could provide the power for industries in Africa and support Europe’s energy transition.
The integration of trade links can be supported by reducing barriers to trade. The average North African import tariffs, currently at 7%, are higher than those in many other regions, such as ASEAN and sub-Saharan African economies. Most of North Africa’s trade is with Europe, and trade between North and sub-Saharan Africa is negligible by comparison, representing only 4% of exports and 1% of imports. Lower tariffs, combined with improved transport links, could encourage an increase in trading links with other regions.
Reforms need to be implemented to strengthen the trade and business environment. A stable business and regulatory environment with strong governance is important for supporting investment and exports. This could include modernization of ports and customs systems and investment in cross-border transport corridors. The North Africa region should be a hub with a free flow of goods, services and capital.
Human capital in North Africa could be strengthened by investments in technical and vocational education. Skills could be enhanced and the workforce could be trained in the use of AI. Human capital can also be supported by investments in health.
According to an IMF report, a comprehensive package of reforms could increase North Africa’s economic linkages with Europe and sub-Saharan Africa. This could increase North Africa’s exports by 16% percent and increase the region’s GDP by over 7%. The benefits could spread to both sub-Saharan Africa and Europe as a result of greater investment and greater participation in supply-chains.
