A review of the contextual factors associated with the North African business environment - descriptive historical study

Abstract

This study compares the contextual factors (culture, political, legal, economic system, and stock exchanges) in three North Africa countries (Egypt, Morocco, and Tunisia). The contextual factors of these countries are very similar being Islamic culture and French law. These countries have similarities in their recent histories. They were occupied by European countries which resulted in English and French languages being spoken in this region. Dictatorial governments (regardless of the types of governments -socialist or otherwise) have also controlled these countries for considerable periods of time since independence. In line with international society, an openness policy has been adopted and many reforms have been made in the stock exchange of these countries. However, much work remains to be done. Although contextual factors are similar, each country is in a slightly different place today in regards to economic and capital markets' development. Policy-makers can learn from the experiences of these three NA countries as the obstacles and backgrounds of these three countries are similar. This is the first accounting paper of which we are aware that studies these three NA countries.

Firm characteristics and compliance with IAS/IFRS

“…This study focusses on NA because the incorporation of NA economies into the international economy, through cross-border investment, may be necessary for development. The reason behind choosing these countries (which represent more than 90 per cent of the total listed companies in the NA market) (Alnaas et al , 2013) is that they have a strategic location linking Southern Africa (a source of raw materials) and Europe (an industrial force), which makes them suitable markets for foreign investors. Foreign investor’s interest in this market can be seen from European Union (EU) attention in this area who have signed many agreements with these countries in recent years.…”

Using international standards as a complement to overcome the unachieved nature of local GAAPs

“…It has built, since independence (1956), a development model guided by political, economic and social openness. Due to economic difficulties experienced in the mid-1980s, the government undertook many profound reforms, suggested by the International Monetary Fund (IMF) and the World Bank (WB), especially through the empowerment of the private sector (Alnaas et al , 2013; Ghali and Mohnen, 2010). The major aim behind these reforms was to gradually dismantle the debt-based economy and to implement in its place, a market-based economy within a global financial market (Murphy, 1999).…”