MARKET DYNAMISM ACROSS THE MENA
THE MIDDLE EAST AND NORTH AFRICA (“MENA”) region is synonymous for the Arab World comprising 375 million people in 22 diverse countries. It stretches from western Africa’s Atlantic coast to the Gulf of Oman at the eastern tip of the Arabian Peninsula. Strong growth in the tech sector is fueled by favorable demography, market integration and widespread economic reforms.
The region as a whole has one of the youngest populations in the world, with median ages of 22 (Middle East) and 28 (North Africa) years respectively. Other growth drivers include rapid urbanization, rising disposable incomes and burgeoning consumer markets fueled, in part, by technology. With rising purchasing power, the size of the region’s middle class is expected to exceed 230 million comprising consumer markets valued at over $2B by 2030.
Millions of middle class people are seeing incomes rise, and tens of millions more are entering the middle class for the first time. The net effect is an aggregate economy among 11 nations worth $3.3 trillion — one of the world’s fastest growing emerging economic blocs, larger than the “ASEAN-5.” Despite the region’s natural advantages, there are clearly headwinds at play. In addition to political instability and sectarian strife, the region’s persistent economic barriers include poor access to finance, lagging education and a patchwork of outdated regulatory restrictions.
Parts of the region are in flux as governance challenges, economic pressures and sectarian divisions roil the hot spots. Declining oil prices mean shrinking government spending on social programs including education and healthcare. But the private sector is booming and most countries in the MENA are on a stable, upward trajectory.
A new generation of Arab youth is more cosmopolitan, tolerant and enterprising than their parents. Their rapid adoption of mobile technology has transformed the region accelerating its economic vitality.
Emerging tech companies all across the region are reaching new milestones in delivering innovative products to match soaring consumer demand. The sector outlook is promising due to a raft of recent big-ticket exits, waves of venture capital, and talented entrepreneurs across the region’s flourishing ecosystems.