unusual relations between the various displays of national accounts ,
GDP has "jumped" from 91 million''L £ in 1963 to 334 and 4°8 in 1964
and in 1965"-fespectivelyo Moreover? the estimated, capital formation^.in . I964 was '33'3-toillioh.--1jSt, 'almost.^.-per cent .of.1 GDP which was: 930'million, US$* This -.figure whicii is: an extraordinaryz-high-one3;probably;.caused.-by
the :huge investments' in oil development =. This is also reflected in the : origin of GDP^-'Since 196'4- mining has l>Qen the source of more::than 5°
cent of GDP, .
Construction value added has remained at a normal level, fluctuating be.twe.en J}.B£.jfco...Jbl...P.£.$*W*- ...?*s rel,a^ive. ■ share, has been getting^slightly. ; lower as.G3)P- ris.e^.. (mainly due to oil production)! , - ^ r.
Table", LI Show's the GDP and its construction val^.a:added0.;;' . ...
Table-■■--Xil-:--;--G-I?P-3^-iLl-bya. and -its .Construction. .Value. Added...at-.jsurrent factor cost
1958 1959 I960 1961 1962 1963
TotalJQI^r ■{■ 52^1^1 61,070V0
"adde^L'Tn 1T8" ~Z«0 " 2 construction
Share of construction
in GDP$ 3=5 3*6 ? -f>- . 3O
Source: Historical data on the macro-economic structure and d^v-:
of the North African sub-region 1967*
a/ Estimates of the IDCA ^-^Tn^::.-:;."/z^
Page 27
■■' GDFCF" haV'beenI:'q.tiiie steady during the last three*.years, as can be: seen in "Tat>le'rL2i" '/"'* ; i'v'"1 " ■ .■■■<■ r^'u? $r. ■■ ■" ■
Table L2 ; GDFCFand its Construction Component in millroa USf current market
Source s Estimates .of the
Investment in
construction ''. 0: ■
98 "■'.-■■
119 :
177
ECA secretariat.
Cons truotXdrf Tri 1 percentage
29 32 48
The relative share of construction investment? which was unsually low in 1964 because of higher investment in oil production equipment, increased towards a more normal share in 1965 and 1966 and can be expected to grow higher from year to year until it will reach a .more conventional level.
Investments . :. .:
In 1963/64? extensive development in communications (roads? tele communication , harbours, airfields, and meteorological installation)? in public works (including water supply, power drainage, slaughterhouses)?
in the reconstruction of earthquake damage to 20,000 dwellings strengthened the impact of investment in construction. It amounted to 16.2 million
£» L? comparable to 10,2 million £ L in. 1964/65* Private capital contri buted almost half (49 per cent) of the total investment* The drop in investment from 1963/64 to I964/65 was due mainly to the lack of developed
projects and the shortage of qualified labour force for its implementation.
In facts it is not the lack of funds that restrains investments in construction but mainly the long process needed for the formation of qualified cadres of labourers as well as the creation of an efficient generation of private enterprises.
Building Materials Demand and Supply
Libya is still relying on imports of cement: in I965 almost half a million tons. (23-7 US$ worth of imports are needed for each square metre of building floor area).
At present, cement consumption of the country is met by import, but a cement factory in Benghazi is nearing completion. It will have a capacity of lOOyOOO tons a year. Another factory with the same capacity is planned at Horns. This will still leave a great part of the country's demand to be satisfied by imports (I5O-3OO thousand tons). Fifty-six enterprises were
Page 28"
producing, in ^964^some.14 million units of various cement products. That
same year neariy 4000 ions "of asbestos cement products'"'.toe're imported. There
is no local asbestos cement production. Only two 6f the above-mentioned enterprises are .working on a semi-industrial basis,.the rest, are of artisan typeV-*""-- ■■-■'■ ■■■----^■-".,.-:..-::.iJri ,....L;:..,, ,;. ,,;.; .,....,... ^^l^;. ■ ■-."■ . ' .
Table L3 g. ■■■Cement ..Consumption..in Libya, in, 1000 tons ■ _.
■' -" ,.,-uJ ' 1950"' .. ■ .■'. :'" " 9
1952 , . (30)
1953 . ...,5l
1954 f; :. ^23
I-955, ■—-- " — -■- --. ■•■.-'(50.) 1956 :,;■■■ .'.:■ ■ ■ ■ ,:■;:; .. ■;■ ', 51
1957 (60)
1958. ■-. - ,,;•,,-., ... ..-:.. 7.4,.
1959 ;.■■- ■■: ■■ ,■:;■■ fi , ;- ■ 97 ■ 1960 ,-.'■■ -.: -, w . -. : ,,., ■ .■■ 141
1961 - :■ ■■:■;" ■■:, /; ; . 157:,
1962 241
1963 ■'■ := -..-,*...■: 288
1964 "'■■■ 329
:C .;.i ,:/y.,! = ;rs".--. ■ ' 473,
TableL4«Pro.je&tionofconstructioncomponents»1964-198Q ~I9641970 US$■%of"US$%of mill....GDFCF■■mill*
.1975 %of mill;,GDFCF
'-1980■■:./■'.^ USS#of;■".-'AnnualCompound .mill.GDFCF:.rate:ofgrowth GDFCF.:;;■.'333':■. 5ha.r.eof'.■■.investmentin.....' construpfion(/o).■'■".•..29 Investment-.inconstruction,97': Shareofinvestmentin dwellings(fo)■11 Investmentindwellings■'":-3T .Shareofinvestmentinnojti— residentialbuildings-(fo)..'.6 Investmentinnon-residential buiBiings:.?20 Shar^.tof:.-investm,^nt'in- civil'1enginee;ri'ng":-(fo);12 Investmentinoivil;■■ engineering::■;<■■■40-.:
540 297 21 ■113 11
640 365 134 154
57 12 24
504 185 ■21.0
,6.0 122 73
11.6 1.9 13*5 .11.1 i-f!-■ ..H
E/CN.14/INE/163
Page 30
About twenty craftsman-type tilting of cement and mosaic workshops are satisfying the country's demand (no precise figure available';).
"Red products" are produced by 27 craftsman-type enterprises of 2-15
workers (170 ;workers were employed in 1964)? producing some 4?.OOO?O(|0 units (or estimated ll;>:200 tons), - Still, 30?000 tons' were imported !kn 1964 to satisfy a demand of more than 40,000 tons. A project'.to-- increase
production by some 90?000 tons is under way. : „ ■ ' ;
The gap :between supply'.and demand 'is filled ^successfully >by a "natural
quarry product of the white sandstone type which'""is sawn out-.into blocks
measuring 40 ;x 28 x 18 onu Present production reaches 35O thousand cubic metres, or 85,000 tons, with a value of 2,625 thousand US$. ; ;■; Employment and Productivity
Employment in construction has increased greatly since the preindependence
days. In I958 the number of-=persons engaged in construction iwas drily 5,200.
p.^T- Xea^ook 1966), According to the General Population"-"Census of;
1964:.:-some 30,000 persons were engaged in construction. Of this total, 28,456 persons were ^employees and 296 employers- Value added in construction in!;1964 was 11.6 million Z* L. Thus the value added per person e'mployed woulid be 386 h L, the equivalent of 1,080 US$,
The census is based on reports from 153 construction units employing;
five persons .or more. It is .assumed that there are 700 other "small!
establishments" with an average of two persons. The increase' an'-wages due to shortage of skilled labourers continueds causing building costs to rise significantly. Productivity did not increase proportionately. :
Correlatin
.g employment with cement consumption we. can see. that the in 1964 is reasonable. The spectacular rate of1 growth'of
annum sinoe 1958 is explained bj the "boom" caused by the 'This rapid development and growth of the labour force had great influx of foreign skilled labourers mainly1from Sudan.
Projection ■ :
Oil extraction3 with its special structure of investment1, has affected the ratio of construction in GDFCF. It would be reasonable to assume that the extraordinarily'low figures for construction's share in capital formation will continue, to rise in the near future until they reach a more normal
relationship with GDFCF.- ■ : ;
The 1966 figures of; around 48 per cent of GDFGF is probably due;to investment in oil producing equipment. This', will probably r©ach soon a []-_ _
saturation point from which a decline must followo: O^ie^inevijjable result;
would be a steady rise-in construction's sharea Buringvthel l^.st few [years;-"' some construction schemes did not materialize ffor^the-: lack'^of plans? jcadre-s
E/CU.14/INR/163
and entrepreneurs. 'This shortage will probably continue for the next few years. Some improvement may be foreseen5 however. Therefore, it would be proper to assume, that construction might reach.a share of almost 60 per cent of investment by I98O. Thus we may assume a figure of 55 per cent in I97O
and 57 per cent in 1975 • : ; ' •
The share of dwellings in, capital formation approximated 11 per cent in I.964.., It. is estimated that it will rise .to ,22;per. cent by I98O, This rise is due mainly to the Idris Plan of 20,000.dwellings a year, ITon-residential building approximated 6 per cent in 1964S but it ,is expected to increase by I98O due to anticipated public investment in social and industrial development.
The rest will be, invested in other construction works* giving 12 per cent of GDFCF in 19^4 and growing rapidly as a result of new oil development and extensive public finance,. ■■..-...'.■
Employment :. ., ■ : ' "
The rate of growth of investment, in construction. frpm; I.964 to I98O
is estimated .to,be some 10.8 per cent. Allowing for.mechanization and improv ment in productivity, we may assume^-tiiat labour will grow, at. an average
annual compound rate of some 5 per cent. Thuss taking the X964 estimated employment figure, we get the following labour force in constructions
1970 ; 1975I98O ..
40>ooo 51>000
65/600
"■In the" absence of projected figures for value added in construction, we cbuld'not check^these estimated employment figures against the value added per person. This was :9&9.4 US$ per person1 in 1958, when the labour force in construction was only'5200 persons1^ anti as calculated previously 1^080 US$ per person, engaged in I964; Construction is developing at a quick pace, substantial imports of coiistrdetion machinery,and equipment were registered in 1966, opening new opportunities for improving productivity
and organization* - ^
:;-Page 32 ■ '
■'■■;"' :"'/ ■".■...;, ■ ■■'CHAPTER V-~'" ■ ■. ■■■ ■■- .*'■: — ■"■&>..
:;..■■. ;. . -11"-GOFSTHETCTIOil IE- TEE^MOROCCM ECONOMY ■ ?.:•■ ■ ■■' ' --:.i ■■-.-:
Construction in Gross Output 'r ;'> . ■ . ■•' :-r The gross''output Pf'construction was- 5*2 per cent of gross domestic output' in l958| :it. declined to half ■ of this ■ in 1960^ but regained1-the 5.2 per cent level in 1964. - : ' -- \ ''■■ ■■'■■' V ■ ■ ■.::. ..j. ■■■'-•-.
.'■ The .value added in.'construption reached 56 per. cent 6i*^'grpss output
in 19569 53 per cent in i960 and almost 50 per cent in'1964,- '.''!'■/■■/ ■
.rfages and salaries, including social charges, were 75 per cent of value added in 19583.77 per'cent in i960 and ;80-per cent in 1964.
gross output was slightly'lower in civil engineering1'works than in buildings? the difference between the two became almost negligible in 6
; " .In Order to understand the"development' of the construction industry it; Is imperative'"to review'the1 main figures wh-iic& characterized-the
"! especially in:-"the investment fie'13vv: ','■■'/ ■" "':-. ■'.'■■■-f ■ : ... i^-ry The pferiod between' I956 arid1- I96O, the first years of andependence ? were characterised by the mass departure of expatriates (out of 5OO3OOO Europeans who were in Morocco in 1956? 3G-JOO0 remained in i960 and only 10,000 in 1964) • As will- be- seen latery^this movement affected the
building of dwellings which in turn reduced investment in construction.
:,.;:■ .Building construction depXined to 1.5 per, cent of. GDP, whereas 2-3 :p.er .cent wpuld be, .considered. n.noxMaln,. The years l-96j.-l.964 were
.pharacrberiaed.''Ay ,an expanded.public se.Gtor devpiopmeni' .programme..with a hig-h;gi:pwth_;.;in.the.'share of .pulDiiq,.investment., . This^as naturally augmented .the;_;;share;.'Of investment, in-; publipv.wprks, thus,.bringing the share. of building .\fcQ.j -an;- ^ven-. lGwer-;.rela.tive. l:e,yel •■;-. , ..'■.;.,...., .. . '.":
Although I965 was a year of financial stability, private, investors followed the public sector only in 1966 with increased investment in tourism and in manufacture.
Construction in GUP
Value added by construction was relatively high at the beginning of the fifties. In 1951-1953 it reached nearly 9 pe*1 cent of GDP. Since then? and through the first years of independence with the departure of large numbers of foreign settlers9 it dropped steadily to 3«5 per cent in i960. In 1960?
owing to an extended public sector development programme, the declining trend reversed itself and remained during I96I-I965 at the 4.2 - 4.4 per cent level of GDP (see Table l).
»^--7^-=-*^^f'"YreiafiaM"a&i=5'*s^
Page 33
The explanation for the drop in the fifties could be partly the general fact ■■tMt---in--. the ■ independence straggle Land; in its first .^ears, construction was the most vulnerable, industry ts $he political';-GHSng-e;s■.-,:-■
and to-the reluctance of private investors. It should also be noted howe^rtHat :the' absolute figures .for GDP. and fpr the valued-added'in manufacturing industries3 continued to grow during these yearsy .this also
contributed; to; the relative fall in construction's share.
,■■■■- ■ ■ ■ '..'■■■ ■ ■ ■ ■ ■■ '' * •-,
\'■'On the other- hand, when; -the' economy regained itsbreach from I960 and on,: construction''s value added grew at a compound rate of 8.5 per cent
while manufacturing grew only by 4-8 per cent .(#DB' hj 3?5 Pe*1.cerxt) as can
be seen in Table Ml.. :
Table [ HI *■■ Gross Domestic. Prpauc-t and its. Manufacturing and Consiruction Value Added ^ in millions of US$ a€: constantvJ96O: marked prioes; r'-;,- .
Gross.domestic product, 1,796 1,755 1,95^ 2?O62 2,086 2,114 ' 3-5
Manufactured origin of "" " ' ■ ■■" ■■" ■>".' .■■.;..■■.:■ ■-'■.. v ■.'.:;. '-.■ ..■-■■■' :{
GDP 223 233 245^ ; 261 269 267 ::-■■-■■ 4*8
Construction value ad^ed 63 ,73;,. .83 .; 91 , , .91, ,-,^5 ,,,;: .- ,$•$
Construction as ^ of GDP' 3-5 "4-2 :■ "4.2 ■ -4;4 ■' '■4*3'.v: :.4«4'-i .V. L.I i1
Sources... Study on Industrial and Economic Go-operation for the North Africa fei - "Part Ha•.■,!*. " ". v.- .l'':"'.:^L:'V:i- "il^'i-l;^1.'1: ": ::■■■'-?r-:'r.
^^ for 1966 show that in...spite of a ' s'light' drop" in GDP
^^"10,580^ mllltpn;;^) ;coristX^?tion value-added -is -e-Hpected to. reach
500 million EH and 4*7 per'-csni of GDP;; ' '.-. :':/ ■■■."■■:. ',
■"'■ - ■—■■■■-. -- ■Ganstruotion in Capital Formation ■■-■ ■';;;;.,..■_■; _; ■...".;;:;.;...
Table M2 gi.yes us the composition of GDPCF of 11 years (1955-1965)>
:--Construction's 'share is generally between 60-65 per cent of GDFCF with two;.
exceptions % 19f8; with the lowest rate of 57 per cent and 1959. with the ^highest
;rate of. 69 per 6eht. A closer look shows that these two extremes are a result of drastic rise and fall of the equipment component while the construction
component remained on a steady increasing level.. ;.
Page 34