The industrial segment in Morocco is one of the country’s main earners of foreign currency, due in large part to its export orientation. This is important because Morocco’s economy continues to grow its trade imbalance. According to Bank Al Maghrib, the central bank, exports stand at Dh201.5bn (€18.1bn) while imports are markedly higher, amounting to Dh358.8bn (€32.3bn). Additionally, the country’s foreign reserves have dropped by 0.4%. Therefore, securing higher industrial exports is an important measure for improving the trade deficit.
The Industrial Acceleration Plan placed more focus on exporting development, and between 2014 and 2017 the export of industrial products increased by 10.3%. In 2014 industrial exports stood at Dh111.3bn (€10bn) in and in 2017 they were recorded at Dh149.4bn (€13.4bn). In particular, the automotive segment saw significant export growth in 2018 that contributed positively to the trade imbalance. Of the country’s Dh160bn (€14.4bn) in exports registered at the end of July 2018, the automotive industry contributed Dh38.5bn (€3.5bn), or 25%. The goal is for all other industries to also increase their exports.
Small & Medium-Sized Enterprises
According to figures released by the Ministry of Industry and Commerce, only 1% of industrial companies in Morocco export. In other words, of around 600,000 companies working in the industry segment, 6000 sell, or have sold, their products abroad. Furthermore, of those 6000 enterprises, 400 exporting companies make up 90% of overall export flows. This means that large industrial groups make up the bulk of exports, while small and medium-sized companies are not selling their products abroad. Indeed, 95% of the economic body in Morocco is made up of small and medium-sized enterprises (SMEs) who are still facing difficulties exporting their industrial products to international markets. A study by the African Development Bank shows that the level of SME integration into global value chains is weak, resulting from financing that remains difficult to access, as well low conformation to international standards. However, exporting products has significantly higher added value than selling products domestically. For example, the added value for automotive products in the domestic market is 41% when compared to the value for products sold internationally. The same is true for textile products, which have an added value of 58%. SMEs that have successfully begun exporting experience benefits including higher efficiency, quality standards, delivery times and price competitiveness. Therefore, in order to improve overall industrial exports in the country and bring in more foreign currency, increased focus needs to be directed towards SMEs and integrating them into global supply chains.
Morocco’s main industrial export destination is Spain, which receives 22.3%, followed closely by France, with 21.3%. Italy is the third-highest export destination and receives just 4.7% of the country’s exports. This makes Morocco highly reliant on Spain and France, due both to their close geographic proximity, as well as the historical and political ties the countries share. However, the country must first diversify its export markets.
In particular, there are various African markets that are potentially valuable export destinations for the kingdom’s industrial products. It has established strong trade policies with sub-Saharan African countries as well as with Guinea, Senegal and Chad. Morocco is also a member of the African Union and is trying to accede to the Economic Community of West African States. However, trade flows to Africa for manufactured goods are still low, and a majority of the agreements are not fully yet fully in place. The implementation of these trade agreements can be made more dynamic by focusing on increasing mutual benefits of the trading partnership, especially in terms of reducing technical complexity and easing administrative procedures.
You have reached the limit of premium articles you can view for free.
Choose from the options below to purchase print or digital editions of our Reports. You can also purchase a website subscription giving you unlimited access to all of our Reports online for 12 months.
If you have already purchased this Report or have a website subscription, please login to continue.