Economy
From The Report: Morocco 2016
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Although Morocco is set to see weaker GDP growth in 2016, due in large part to a poor agricultural harvest following low rainfall, a series of financial reforms and initiatives, and strong foreign investment, have positioned the country well for future gains. The kingdom has had success in its recent efforts to build up export-oriented manufacturing projects, which should take over from more traditional industries in driving growth as well as provide higher-quality employment over the longer term. If Morocco can continue to attract major investment in high-growth-potential industries such as automobiles, aeronautics, agri-business and offshoring while also developing well-integrated business ecosystems in these areas, it could achieve the sort of growth rates seen in other emerging markets, such those in South-east Asia.

This chapter contains interviews with Mohammed Boussaid, Minister of Economy and Finance; Tanja Gönner, Chair of the Management Board, GIZ; Hafez Ghanem, Vice-President for MENA, World Bank.

Articles from this Chapter

Overview

The next step: Although some short-term challenges remain, the country is well poised for future growth
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Although Morocco is set to see weaker GDP growth in 2016, due in large part to a poor agricultural harvest following low rainfall, a series of financial reforms and initiatives, and strong foreign investment, have positioned the country well for future gains. The kingdom has had success in its recent efforts to build up export-oriented manufacturing projects, which should take over from more traditional industries in driving growth as well as providing higher-quality employment over the longer term.…

Analysis

Change of pace: A series of financial reforms should help to reduce expenditures
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Having risen rapidly in the years to 2012 on the back of high expenditures, Morocco’s budget deficit has fallen in recent years as subsidy reforms and other efforts to reduce spending and raise revenues kick in. Authorities are also on the verge of overhauling the public pension system, after the government was forced to substantially raise pension contributions in order to avert the system’s collapse. Falling Budget Deficit Having registered slight surpluses in the years prior to the 2008-09…

Interview

Showing resilience: OBG talks to Mohammed Boussaid, Minister of Economy and Finance
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Interview:Mohammed Boussaid What is Morocco’s economic outlook for 2016, and how will a slowing global economy play a role in near-term growth? MOHAMMED BOUSSAID: Since 2008, Morocco has displayed some resilience and strength. In 2015 the economy expanded at a rate of 4.5%, the stock of foreign currency surged and the macroeconomic environment improved through further liberalisation. We also completed a programme supported by the two-year precautionary and liquidity line arrangement to…

Analysis

A different model: Plans are under way to liberalise the kingdom’s exchange rate and improve competitiveness
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Authorities in Morocco have long succeeded in keeping prices under control through monetary policy tools such as inflation targeting and an exchange rate peg that has avoided spikes in the cost of imports. Thanks to persistently low inflation, recent years have seen several interest rate cuts, the latest of which took place in March 2016, as low forecast growth led to reductions in inflation forecasts for 2016. Against this backdrop of price stability, the authorities, with the backing of the IMF,…

Interview

Harnessing renewables: OBG talks to Tanja Gönner, Chair of the Management Board, GIZ
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Interview:Tanja Gönner What impact has climate change had on Morocco? TANJA GÖNNER: Due to its geographical position, Morocco is very vulnerable to the impact of climate change. The country is grappling with desertification, floods and water scarcity. Morocco’s future development will depend to a large extent on whether it can reduce environmental damage and conserve its natural resources so that they are available for use on a sustainable basis. Despite its small contribution to global…

Analysis

Moving on up: A series of initiatives have been aimed at improving the business environment and international rankings
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The business environment in Morocco is one of the most attractive in North Africa and it continues to improve in international rankings. While a number of challenges such as payment delays and access to finance affect companies operating in the kingdom, the government is working on a range of initiatives to address these and other problems, though observers say progress remains slow in several key areas. Doing Business Morocco was 75th of 189 countries in the World Bank’s 2016 “Doing Business”…

Interview

Equal opportunities: OBG talks to Hafez Ghanem, Vice-President for MENA, World Bank
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Interview:Hafez Ghanem What steps can Morocco take that will enable it to move towards greater economic and social inclusion for its citizens? HAFEZ GHANEM: Morocco has come a long way over the past 15 years, almost doubling the average income of its population, which is around 34m. But although it is taking the long view in its approach to development, there are still economic distortions that are hindering growth. Increasing the country’s development momentum takes inclusive institutions,…

Analysis

Planning for growth: New investment charter looks to further boost foreign investment levels
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Morocco has taken steps to sustain foreign investment inflows during a period of slow global growth. The authorities have rolled out a range of reforms, from a new National Business Environment Council in the Prime Minister’s office to the adoption of anti-corruption plans. However, perhaps one of the most prominent changes came in summer of 2016, with the rollout of a new legislative framework which helps to further incentivise foreign investment – and which has already yielded hundreds of millions…