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The Report: Morocco 2020

Morocco’s economy is poised to continue along its trajectory of economic growth, but GDP expansion rates will depend on the policy choices made by the government. Although estimates by the IMF project that annual growth rates will reach 4.5% in 2024, there is still the matter of ensuring that GDP growth translates into improving conditions across all segments of the population.

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Sections

  • Country Profile
  • Economy
  • Banking
  • Capital Markets
  • Insurance
  • Industry & Mining
  • Energy & Utilities
  • Transport & Logistics
  • Construction & Real Estate
  • ICT
  • Agriculture & Fisheries
  • Tourism
  • Health & Education
  • Tax & Accountancy
  • Legal Framework
  • The Guide
  • Table of Contents

Country Profile

Morocco is often described as the gateway to Africa, an apt description given its proximity to Europe and its geographic location at the north-eastern tip of the continent. Morocco's economy has traditionally been dominated by agriculture, which is one of the most strategically important sectors. Despite its significant economic weight, the agriculture sector's performance is highly dependent on rainfall and weather conditions. Meanwhile, other sectors have been increasing in importance, such as the industrial and mining sectors. At home, Morocco has identified the reduction of social inequality as a key priority, setting in motion a series of reforms and transferring critical development funds to less-developed regions. Abroad, Morocco’s foreign policy objectives focus on spearheading intra-African cooperation and positioning itself at the centre of Europe-Africa relations. Gains were made on all these fronts in 2019, supported by growing GDP that reached $118.5bn in 2018. This chapter contains a viewpoint with King Mohammed VI; interviews with Gerd Müller, Minister for Economic Cooperation and Development of Germany; and Li Yong, Director-General, UN Industrial Development Organisation.

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Economy

Supported by a favourable geographic location between Africa and Europe, vast array of natural resources and improved business environment, Morocco’s economy has made important strides over the past decade. Investment in export-oriented manufacturing industries is gradually allowing the country to diversify its economic output. In hand with this, years of investment in infrastructure have strengthened transport and logistics links across the country, facilitating domestic and international trade. However, Morocco continues to face a number of economic challenges. Annual growth rates remain intrinsically linked to agricultural production. In addition, persistent unemployment rates, have prevented large segments of the population from joining the middle class, and subsequently spurred the emigration of qualified graduates and professionals abroad. Aiming to avoid economic stagnation and facing growing demand for more inclusive growth, the authorities have focused on leveraging the positive results achieved through past policies for a renovated growth model. This chapter contains interviews with Mohamed Benchaâboun, Minister of Economy and Finance; and Hicham Boudraa, Acting Managing Director, Moroccan Investment and Export Development Agency.

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Banking

In recent years Morocco’s banking sector has experienced a period of consolidation at home and expansion abroad following a surge in lending in the decade leading to 2012. The country’s leading banks are now among the largest in Africa, with extensive continent-wide holdings. Despite GDP growth trending lower and the associated slowdown in lending and spike in non-performing loans, profitability and capitalisation have remained relatively stable, underpinned by important regulatory changes. The authorities are working to increase financial inclusion by targeting small and medium-sized enterprises, women, youth and rural residents, all of whom are traditionally under-represented in the financial system. Diversified offerings, including sharia-compliant participatory banking, and financial technology products, such as e-wallets, are important developments towards this end. This chapter contains interviews with Abdellatif Jouahri, Governor, Bank Al Maghrib; and Kamal Mokdad, CEO and Head of International Global Banking, Banque Centrale Populaire.

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Capital Markets

Macroeconomic stability, a thriving private sector, and a pivotal location bridging Europe and Africa have helped cement Morocco’s position as a major continental financial hub. By African standards, the kingdom’s capital markets are relatively deep, liquid and sophisticated. Recent years have seen challenges arise on all of these fronts, however. Against a backdrop of subdued economic activity, the market saw scarce new equity issues; falling liquidity; and delays to long-planned innovations, such as its small and medium-sized enterprises window. Although efforts to increase depth and liquidity have been hampered by weak economic growth, the 2018-19 period saw the implementation of a number of regulatory developments, which are set to bear fruit in terms of increased activity in alternative financial products and markets in the years ahead. This chapter contains interviews with Karim Hajji, CEO, Casablanca Stock Exchange; Abdeslam Ababou, Managing Partner, Red Med Finance; and Souad Benbachir, Partner and Executive Managing Director, CFG Bank.

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Insurance

In recent years Morocco’s insurance sector has consolidated its strong position, with the growing middle class, tax advantages and fierce competition between bancassurers giving a notable dynamism to the life insurance segment. Morocco is the second-largest insurance market in Africa in terms of gross premium, and ranks highly for both insurance density and penetration. Furthermore, regulatory reforms are helping to cement the strong financial position of insurance players and broaden the range of obligatory and discretionary insurance products available. As the insurance sector matures, its players are increasingly looking to international markets to grow their businesses. This chapter contains an interview with Ramses Arroub, CEO, Wafa Insurance.

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Industry & Mining

With an increasingly diversified manufacturing base, the industrial sector has become an important component of Morocco’s GDP. The country produces an array of finished products and components for customers not only in traditional markets such those in southern Europe, but also increasingly across Africa, Asia and the Americas. The growing strength of industrial activities is also a reflection of efforts to diversify the economy away from a traditional dependency on agriculture. Home to the world’s largest known reserves of phosphates, mineral resources have traditionally played an important role in the Moroccan economy. The authorities have been able to establish the country as a major exporter of the resource, and are now looking to steer the sector towards other minerals. As Morocco works to diversify its economy, the extraction and processing of a wider variety of its mineral resources has been identified by government officials as a strategic imperative for economic development. This chapter contains an interview with Mohammed Amal Guedira, Founder and CEO, Automotive Moroccan Group Business and Consulting.

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Energy & Utilities

The energy sector is poised for promising medium-term growth as it continues to receive significant public and private investment to expand generation capacity and distribution networks. At the same time, efforts to increase the role of renewable resources and natural gas in the country’s energy mix are set to lower the energy import bill and reduce fossil fuel emissions. However, in order to ensure that private investment objectives are met, upgrades to the sector’s regulatory framework will need to be completed. Meanwhile, Morocco has already shown that it can be a reliable partner in the exploration and development of hydrocarbons resources, and the policies it is currently pursuing should help the country reduce its reliance on imports in the years ahead. This chapter contains an interview with Abderrahim El Hafidi, General Director, National Office for Electricity and Drinking Water; and Saïd Mouline, CEO, Moroccan Agency for Energy Efficiency.

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Transport & Logistics

Upgrades in transport and logistics infrastructure have been key to driving economic growth in Morocco in recent years. As the country develops and urban areas expand, the interconnectivity of economic centres and efficient connections to the rest of the world will be paramount to supporting the growth of other sectors, such as agriculture, manufacturing and tourism. While the transportation and logistics sector continues to grow in value and volume, efficiency remains an issue, and local players continue to face relatively high operational costs. Nevertheless, the modernisation of equipment and better integration of transportation modes, coupled with an increased digitisation of processes, are supporting the sector’s development. This chapter contains an interview with Nadia Laraki, Managing Director, National Ports Agency.

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Construction & Real Estate

Morocco’s construction sector has performed moderately well since the global financial crisis of 2007-08. Public policy efforts have also been directed towards supporting local small and medium-sized enterprises and upskilling workers. For Morocco’s construction sector to achieve its target of generating $8.4bn by 2022, it will need to maintain a steady momentum of public investment. At the same time, efforts to upgrade the legal framework in order to enable effective public-private partnership projects, formalise small-scale subcontractors and upskill the workforce will be required to raise productivity and increase the value of infrastructure projects. Meanwhile, the real estate sector recorded a subdued performance on most indicators in 2019, as prices and demand continued to fall or show little improvement. Nevertheless, construction will drive on across all real estate segments, as Morocco experiences rapid population and economic growth. This chapter contains interviews with Nouzha Bouchareb, Minister of National Planning, Urban Planning, Housing and Urban Policy; and Nawfal Bendefa, Managing Partner, REIM Partners.

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ICT

Greater promotion and adoption of digital solutions has the potential to shift the backbone of the kingdom’s ICT sector beyond just telecommunications. While international rankings place the kingdom among some of the best-performing countries in both the North African region and the continent of Africa in ICT-related indices, infrastructure development and upgrades must be strengthened in order to create more inclusive and productive development. Enhanced and updated training programmes will be crucial to changing mindsets on the benefits of technology, as well as preparing the current and future workforce to overcome modern challenges. With the kingdom’s regulatory framework moving in the right direction, ICT developments will continue to bridge national divides and cement Morocco’s position as one of the most important players on the African continent. This chapter contains an interview with Mohammed Drissi Melyani, CEO, Digital Development Agency.

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Agriculture & Fisheries

The agriculture sector has grown exponentially since the implementation of the Green Morocco Plan in 2008. The plan has achieved most of its goals and increased the value of the sector through the development of traditional crops, better marketing, improved supply chains and subsidised drip-irrigation equipment. However, the slow establishment of adequate refrigeration space and transport networks to carry produce to the market in a timely manner has led to instances of spoilage. Mechanisation levels have improved, but many small-scale farming operations continue to face obstacles to finance their equipment needs. Mitigating the effects of climate change will also determine the future of agriculture in Morocco. Although government measures have helped align water-saving measures with sector practices, water management will be increasingly critical as higher temperatures become the norm and population growth puts further pressure on hydraulic resources. This chapter contains an interview Abdelhamid Aboulkassim, President, Moroccan Interprofessional Federation of Organic Agriculture.

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Tourism

Morocco’s geographical variety, combined with favourable weather conditions and its proximity to key European tourist markets, have made it one of the most attractive and competitive destinations in Africa. The country’s attractiveness as a tourist hot-spot has been strengthened by its consistently stable political and economic situation relative to the region. Like most critical sectors in the Moroccan economy, tourism has benefitted from a dedicated sector development strategy, the most recent of which is Vision 2020. However, while arrival figures have been improving, overall results have remained below expectations. This has triggered a re-evaluation of sector policy as the kingdom attempts to increase the sector’s weight in the economy. Continuous investment to promote the country’s brand to both established and new source markets will be essential going forward. This chapter contains an interview with Nadia Fettah Alaoui, Minister of Tourism, Air Transport, Handicrafts and Social Economy.

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Health & Education

Morocco’s growing insured population and middle class is likely to incentivise additional investment in private health facilities and pharmaceutical production units. At the same time, the government has demonstrated progress in meeting goals set by Santé 25, which is likely to continue given the increase in the Ministry of Health budget in 2020. However, the public health sector will likely continue to face pressure to address the ongoing shortage of health professionals. Equipped with a new education law and an ambitious budget for 2020, Morocco is well positioned to reform its education system. The new law, puts into motion proposals recommended in its 15-year plan for the education sector, which runs from 2015 to 2030, and includes the recruitment and training of 200,000 new teachers. The plan bases the need for reform on the education system’s weaker areas, such as the economic difficulties faced by graduates. This chapter contains interviews with Amine Benabderrazik, President, Association of Multinational Pharmaceutical Companies in Morocco.

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Tax & Accountancy

In conjunction with Ernst & Young, this chapter explores the taxation system and Morroco’s efforts to build an investor-friendly environment. It also contains an interview with Abdelmejid Faiz, Tax Partner, EY Maroc.

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Legal Framework

This chapter introduces the reader to the different aspects of the legal system in Morocco, in partnership with Dentons Sayarh & Menjra Law Firm. It also contains a viewpoint with Omar Sayarh, Managing Partner; and Mehdi Megzari, Partner, Dentons Sayarh & Menjra Law Firm.

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The Guide

This section includes information on hotels, government offices and other listings, alongside useful tips for visitors on topics like currency, visas, language, communications, dress code, business hours and electricity.

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Table of Contents

To view the table of contents for this report, click the "View in online reader" link above.