MENA Enterprise Survey Report Working Papers: Volume 2 - Jobs, access to credit and informality in the Middle East and North Africa

Description

The economic environment in the Middle East and North Africa (MENA) region is characterised by a long-lasting stagnation in job creation. Over the period 2016-2019, employment growth was about 1.4%, well below the performance of lower-middle- and upper-middle-income countries. One crucial determinant of employment growth is finance, with recent evidence documenting the positive effect of access to credit on employment and investment. Yet, an obstacle to the virtuous role of the financial system in the region is the disconnectedness of private firms from the banking sector.

Another important feature of MENA economies is informality. Data from the Enterprise Surveys show that 29% of MENA firms say they are exposed to competition from informal firms, which poses a possible threat to the proper functioning of the economy and to the operation of formal firms.

The Enterprise Surveys, conducted by the EIB, EBRD and the World Bank, provide insight into what lies beneath the region’s relatively slow growth, with a focus on the reasons for stagnating productivity and inadequate accumulation of human and physical capital in the private sector. This working paper is the second of nine supporting the full report: Unlocking sustainable growth in the Middle East and North Africa private sector.