materials to produce sulphuric acid when the sulphur supply decreases in

the world market because of military uses.

The Safi complex in Morocco comprises the following units :

- a sulphuric acid unit with a daily capacity

of 1,300 tons (410,000

tons per

year) of monohydrate acid which

uses

the

local pyrrotines;

(pyroxene)

a phosphoric acid factory with ^a daily capacity of

450 tons (150,000

tons a

year)5

- a factory to produce triple superphosphate or ammonium phosphate

(ï).

Two other projects are planned % one in Eastern Algeria

where the

sulphuric acid can be obtained from iron pyrites, or

from imported

sulphur. The second is in Tunisia where the gypsum, can be

used to

pro¬

duce the sulphuric acid.

(2)

The development of the mixed and compound fertilisers in the Maghreb requires about 400,000 tons of potassium

fertilizers. In

Morocco there is a potassium mine between

Rabat and Meknes where

a factory could be established to produce a minimum amount of

100,000

tons a year

(3).

Another possibility is to exploit the potassium re¬

sources on the borders of Tunisia and Libya between the two countries.

(ï)

It is expected that this capacity will be increased in 1975 to

reach

800,000

tons of sulphuric acid, and 30,000 tons of phosphoric

acid _{per year.}

(2)

It is estimated that in 1973 the three projects will reach capacity of

600—800,000

tons of phosphoric acid. This coincides with the level of ammoniac production. See Giri op.cit. p.26.

(3)

^{op. cit.}

IDEP/ET/2340

Page 55.

To sum up, the following projects are suggested to produce semi¬

manufactured fertilizers in order to develop the mixed compound ferti¬

lizer industries in the Maghrebs

(ï)

1. Arzew unit in Algeria and Zouitna unit in Libya to pro¬

duce ammoniac, "uree", nitric acid and ammonium nitrates.

2. Safi complex in Morocco, Tunisian and Algerian projects to produce phosphoric acid and ammonium phosphates.

3. A Moroccan project and a Tunisian-Libyan project to produce potassium chlor.

(2)

There is another source of economy s if the four Maghreb countries

start regrouping laboun? training in the main industrial sectors, especially for fertilizers and metal manufacturing, they would cut

down their investments in this field.

(ï)

The Maghreb's vast crude oil resources can be a useful base on which to produce compound organic chemical products. So, ^a complex

can be studied to treat about 1.5-2 million t. of crude oil,

which would comprise units to produce plastics and derived chlor products, soluble or plastic, superior alcoholics, caustic soda,

etc. This complex will surpass the Maghreb market, and should ex¬

port a considerable proportion of its products.

Another two industries suggested by the Giri report in this

field of chemical products are s

(ï)

the glass for hypodermic syringes

(2)

sweet and gaseous drinks made from tartaric acid and citrus acid

(lemon)

and their derived products.,

(The

raw materials needed exist in the

Maghreb)-

^grapes and citrus fruits.

(2)

It should be stressed again that most chemical industries need a scale of output

(and

also of

investment)

beyond the possibilities

of the individual countries of the Maghreb, and Sometimes even be¬

yond the level of the whole Maghreb. Production of ammonia, for instance, is economical only on a very large scale.

(Production

of sodium and chloride by electrolysis can be on a small

scale).

Here again, we find that the E.C.A. Commission considers that Algeria with its oil and natural gas resources should be put in the fore-front for the development of petrochemical industry, not only

for the Maghreb market but for Africa and the World market.

(There

are big chemical concerns in the Maghreb. Michelin Tyre Factory in Algeria, General Tyre Company in Morocco, and also Jacquane

Berjonneaux ana other small

plants).

2. Zinc and. Lead 'CC:

¥e have already seen in the second chapter how mineral resources in the Maghreb play or can play a decisive role in the development of the economy. Tunisia's production of lead in 1967 was.about 22,000 tons

of lead concentrates _per year. The Djebel Hallouf smelter

in Western Tunisia takes the local production of about

6,000

tons a year. The remainder is treated by the Megrine foundry in Tunis. This

latter factory works at half its capacity.

Tunisia's production of zinc concentrates is too small for local smelting

(5,600

tons in

1969)»

Algerian produces bigger quantities

(1).

So the smelting of the two countries' products in Algeria would be both possible and more economical. But the economy which would be achieved

from treating the Tunisian ore in Algeria depends on the railway charges

which can be reduced if Eastern Algerian lead concentrates

(about

5,000 t.

in

1966)

were carried as return freight to the Megrine smelter.

So far as the cooperation between Algeria and Morocco in the ex¬

tracting and processing of lead and zinc is concerned, we find that these

ores stretch across the borders between the two countries, although

the geological formation contains rather more ore on the Algerian than

on the Moroccan side. There are four mines of lead and zinc on both sides of the border. There is no coordination of production or treat¬

ment of these ores between the two countries. It would be useful for the two countries to _{agree on a common} management of the mining of these ores, and on the treatment and smelting operation.

(ï)

^{About seven} times the Tunisian production.

IDEP/ET/2340.

Page 57»

According "to the study of ECA mission

(1 )

the pooling of mining

and concentrating facilities would he of mutual benefit to both countries,

if the area was treated as one project ignoring the political frontier.

It also recommends that a smelter -should be located on Algerian terri¬

tory, to benefit from the cheap energy and

suitable

poivt

facilities (liemoura

^or

Oran).

This location is also justified on the ground of the big ^reserves of ores in the Algerian territory, as already mentioned

(2)..

A factory to treat the zinc and lead with, electrical current is possible to use the Maghreb resources of these matériels» It seems that Algeria decided to construct a factory of this kind» It is reported

that Morocco will cooperate with Algeria in this field, and this co¬

operation should be extended to ^cover the whole Maghreb»

Another factory to treat copper with electrical current with a capacity of 10,000 tons ^{a year} is also suggested by an

ECA mission.

The Maghreb market would absorb most of its

productsi(1 )

3» Clay

Clay is another mineral which is shared across the Algerian-Moroccan

borders where substantial deposits occur on either side

(the

coastal region around

Oujda).

Morocco produces about 40,000 4. ^per year,

while

(ï)

Report of the ECA industrial coordination mission, op.cit. p.34

et seq.

(2)

The possible coordinated production is estimated at 5O9OOO tons

of zinc and 15-20,000 tons of lead annually-. —

(3)

An alluminium industry depending on the Libyan and Algerian cheap

energy of natural gas would be possible if bauxite can be imported

from the African countries and manufactured near the ports. Al¬

though the minimum capacity of such a project is 100,000 tons per year, and although the Maghreb capacity of such a project is

100,000 tons per year and the Maghreb would net absori more than

8,000

tons, the Giri report suggests such an industry mainly for export, especially if an agreement is reached between the inter¬

national cartels of these industries and Libya or Algeria.

the Algerian production per year is ahout 100,000

tona.(l)

There are two small plants to prepare this material for the market s

near Melila and Oujda respectively. Here again we find that it might

prove profitable to establish a single management for production, treat¬

ment and shipping covering the entire region which could produce a more valuable product more efficiently. This is ^{an area} of cooperation

in which the Libyan Petroleum industry would.be a substantial customer.

The locations of this management should take into consideration the optimum economic conditions, which are certainly of crucial importance,

but should also take into consideration the fair or equitable distribu¬

tion of benefits and losses between the member countries, of an integrated scheme. The equitable or semi-equitable distribution of industries

among the member countries is one of the most important factors in any successful attempt at economic integration.

4. Energy

In the second chapter we exposed the vast resources of crude oil and natural _gas in Libya and

Algeria.(2)

There is no need to stress the importance of oil for Libya, ^nor is

it necessary, in these lectures to survey the existing oil fields. But

it is relevant to our subject to point out that the petroleum development

in Western Tripolitania could play an important role in the future in¬

dustrial cooperation between Libya and Tunisia. There is an oil re¬

finery at Mersa le Brega to cater for Libya's requirements

(3)

^{with a}

small capacity of 35^3 000 t.

(/.)

(ï)

These figures are for production "■until 1982.

(2)

^{While the} Maghreb represents of the world population, its re¬

sources of oil constitute

5%

of the total world resources of oil

and

10%

of the natural ^gas.

(3)

Regular gasoline, premium gasoline, Kerosene, diesel oil and heavy

fuel.

(4)

This is a very small refinery compared with others of several million tons per year.

IDEP/ET/2340.

Page 59.

Tunisia has no natural gas except a small deposit at Cap.Bon.

Its potential needs for natural gas are about 100 million of cubic meters.

It would be very costly if a pipeline from the known fields in Libya

or Algeria is constructed to obtain gas. It would be more convenient

to Tunisia if a transmission line for export of gas could be laid either through her territory, or near enough to allow a take-off from the main pipe-line.

(ï)

Algeria's oil is evacuated by the two existing pipelines to Bougie

and Skhirra respectively. They are approaching their capacity of 31

million tons _{per year}

(2).

The Maison Claire Refinery near Algiers has

a capacity of 2 million tons a year, while the present consumption of

oil refinery products is 900,000 "t.

(3)

So there is excess capacity,

in addition to another large refinery being considered, and a field refinery of 200,000 t. capacity at Hassi Messaoud.

Gas production in Algeria amounts to about

2,160

million cubic metres

in 1967

(4).

Reserves are almost inexhaustible. The only field in pro¬

duction at present is that of Hassi R'Mel where the reserves are esti-u.tod at several hundred million tons and which is connected to the

coast by a gas pipeline.

Gas is usually exported in the form of liquid methane. These huge

reserves of gas cannot be made available at once to Algeria's

neighbours.(5)

(ï)

A refinery at Bizerta has just gone on stream with a million ton capacity. Its first year production target is

650,000

tons. The

crude oil is imported from Iraq.

(2)

A third line is planned.

(3)

Algerian oil is light. It breaks down mainly into gasoline and

fuel oil.

(4)

There figures are for 1964« Production increased to 2,315 million

cubic meters in the first eight months of 1968

(Jan.-August).

(5)

Pipelines oost $100,000 ^per km. Thus the minimum amount of gas needed to justify these costs is 1-2 million cubic meters per day,

a figure which Tunisia and Morocco could not afford.

It would "be "beneficial to both Tunisia and Algeria if the planned pipeline was directed to the port of Skhirra which is 300 km shorter

than Bone. It will make natural _gas available at low cost in the

Sfax-Gabes regions,

(l)

Morocco has meagre resources of oil. There is an old refinery

at Sidi Kassem and another at Mohammedia with a capacity of 1.2 million

tons per year

(output

in 1964 is

800,000 tons).

The total refining capacity is 1

l/2

million tons and will not be used for years. The

substantial amount of fossil oil in Morocco

(400,000

t. ^per

year)

is exploited, but subsidised by the government.

In the field of electric _power generation, priority was given until recently to the hydro-electric power, as it is combined with irrigation

works and more economical than thermal power. The oil and natural gas affect the situation as the natural _{gas reserve} is a most important re¬

source for _power generation, simply because it is clean fuel and most economical.

Libya power activities have not developed yet, and Tunisia has

limited hydro-electric energy resources

3/4

of which depend an thermal

power. The present cost in Tunis is 12 millions per Kwh., so it^■ could

obtain electric _{power more} economically from Algeria. If the former

links which connected Tunis to Bone and Thakner to Clair Fontaine, further

south are to be re-established, it will be useful to both Tunisia and Algeria. The cost then will be 7-8 millions per unit for Tunisia i.e.

2/3

of the present cost, and also Tunisia ^can save

the multimiliion dollar

investment for additional generating capacity.

(2)

In Algeria electric power is abundant : the output in 1963 was

2,700 million KWH while the consumption was only 1,000 million KWH

(less

than

half).(3)

(ï)

^See figures in chapter 1.

(2)

If Tunis could get gas transmitted from Algeria, a gas driven power

plant is feasible, but it should be borne in mind that the cost of electric transmission line _per km. is

l/lOth

of that of a pipe¬

line. ^{i ,}

(3)

Recent figure for 1967 Is

1s188

Kwh and for the nine months of 1968

(Jan-Sept.)

is

1,272

million kwh.

IDEP/ET/2340.

Page 61.

There are large plants operating near the Moroccan border in Oran,

and near the Tunisian border at Bone. ""Algeria'wi'i'h "its natural gas

can generate electric power at little more than half the cost pre¬

vailing in the neighbouring countries.

(ï)

The main source of energy in Morocco is hydro-electric power which

is combined with irrigation schemes. Without indulging in hr detailed

survey of Moroccan power production, it suffices to point out that the

industrial consumer rate is 12 million _per Kwh., a high price. The

collaboration with Algeria which has a large unused capacity would be

better for both countries. The Oran works could supply Morocco with

several hundreds of Kwh _{per year} to the frontier at 6 million per unit,

which will promote industrial development in Morocco, and Algeria would

benefit from using the idle capacity.

(2)

It should also be noticed

that" inter-connection of the electrical grids would increase grid stabi¬

lity, reduce the necessary reserves and limit the number of ^new plants

until 1973, and hence achieve considerable economy.

(ï)

1 cubic metre of natural gas costs 350 frs. at Oran pipeline terminal Which is equal to power generating cost of 5 million

per unit.

(2)

Transmission of Algerian power to the Moroccan network, for

instance, could be effected by a 150 kv. line connecting Oran with Oujda.

(18O

km, - costs $ 2. million « can be finished in 18 months financed hy Morocco - owned by Algeria ^- guarantee a minimum amount

of electric energy - 6 million per Kwh at the frontier).

INTEGRATION INDUSTRIES EASED OP MAGHREB LOCAL DEMAND"'

Some general principles should he laid down as a guide for the

industrial investment policy for this group of industries,

NATIONAL INDUSTRIES

i. Food industries

This group is a typical example of those industries which from the

economic or technical point of view are suitable for local production.

They depend on agriculture to supply them with the inputs necessary for

their production process. The inputs needed may he perishable, such

as meat, milk, fruit, vegetables, fish etc. or less perishable such

as cereals, sugar, oil, coffee, cocoa, etc. Both kinds offer a market

for some of the basic agricultural raw materials produced by the agri¬

cultural sector. As agriculture still occupies a special place in the

economies of the Maghreb, in the GDP or in the size of employment, so the role of these industries is not only to take care of the supply

side,

i.e. to provide the local market with processed food, but to create a local demand for agricultural products.

If the underdeveloped Maghreb countries have to industrialize in order to

develop,

^so

food.

processing industries are most suitable

for

the first stage in their economic development. They offer employment,

utilize local ^raw materials, train the labour force and raise the level

of their skills, increase the contribution of industry to the growth of

the GDP and hence help in accelerating the rate of development. They

do not need a high standard of technology, ^so they can he managed re¬

latively easily. Although large enterprises may be more profitable,

small units also catering for the local national market can also be fitable and would achieve the above—mentioned _purposes. One may come to the conclusion that these industries should be left to the individual countries and should also he protected at least in their infancy

IDEP/ET/2340.

Page'

63.

2. Textile industries

The textile industry is very popular among countries starting

their first stage of industrialization. This industry established the

basis,for the industrial as well as the overall economic development of Britain, Japan and other developed countries, and it now occupies a special place in the plans or industrial programmes of nearly all the under-developed countries. Thus, from the historical and psychological

viewpoint no country would agree not to have its own textile industry simply because a neighbouring country ^may have a comparative advantage

in producing textiles.

If any economic development effort cannot achieve its objectives with¬

out industrialization then it is legitimate that the underdeveloped industrializing countries should start establishing and expanding their

textile industries to supply the national market as well as the foreign

markets as soon as their products reach the required standard to compete in the world market.

Here, also, the technology used is not as complicated as that of

a chemical industry or an iron or steel industry, etc. As the textile industries, although mechanized, employ a relatively higher number of

workers than other industries, especially in certain branches such as underwear and ready-to-wear clothes, so they would contribute to solving

the problems of unemployment.

If the textile industry uses the locally produced cotton or ether fibres ^as its main inputs, it becomes indispensable in absorbing a con¬

siderable quantity of local raw material and helps the economy to depend less on the primary exports with its price fluctuations and unfavourable terms of trade. It can serve also as an import substitute helping to

redress the external imbalance which is characteristic of the under¬

developed economy.

In the case of the Maghreb, the production of long staple cotton may reach

16,000

or 17,000 tons in 1973. The consumption of this type of

cotton is expected to be not more than 4—5*000 tons in the same year.

The rest can be exported and a cheap medium or short staple cotton could be imported to provide the Maghreb textile industries with their inputs.

Spinning and weaving enterprises, moreover, do not necessarily need

to produce on a large scale. A production unit in this field can "be profitable if it produces

2,000

or 3*000 tons per year.

That

does not

mean that cooperation between the Maghreb oountries, especially between

say, Libya and Tunisia with relatively smaller population is not useful.

, What is suggested should not be taken as a permanent strategy for the development of the textile industries in the Maghreb. It takes into

consideration the near future or the short run policy. But after every member country of the integrated Maghreb passes this initial and necessary

consideration the near future or the short run policy. But after every member country of the integrated Maghreb passes this initial and necessary

Dans le document Economic integration in the Maghreb (Page 55-66)