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Economic situation Improved business climate, but jobs in short supply
However, economic development is subject to huge fluctuations, in part because of the dependence of agriculture on rainfall. Between 2016 and 2019, economic growth rates ranged from 0.5 to 5.1 per cent. After a slump caused by COVID-19 in 2020 (minus 7.2 per cent), the country experienced a significant upturn in 2021 (plus 7.9 per cent), which was however very much due to good levels of rainfall during the period in question.
In 2022, Morocco suffered poor harvests because of drought, rising prices for commodities and logistical bottlenecks as a result of the war in Ukraine – growth remained below one per cent. The International Monetary Fund (IMF) is predicting growth of roughly three per cent for 2023 and 2024. How the economy develops will depend above all on whether the drought in 2022 continues and how quickly tourism picks up after the COVID-19 pandemic.
Lack of employment prospects
The major challenges facing the country include high levels of unemployment, widespread underemployment and a lack of prospects for its young population. The official unemployment rate is already almost 12 per cent, and is over 27 per cent in the case of youth and young adults.
More than 30 per cent of all Moroccans in work are employed in the agricultural sector. Generally speaking, more than 95 per cent of private sector businesses are micro, small and medium-sized enterprises (MSMEs); they are responsible for generating about 40 per cent of the country’s gross domestic product. More than three quarters of workers are informally employed. As part of its National Development Strategy, the government wants to specifically promote MSMEs and increase the share of people working in the formal sector to 80 per cent.
Making Morocco more attractive for investors
The development of the private sector is hampered in part by unwieldy bureaucratic processes, the deficit of well-trained skilled workers and the lack of legal certainty, and by corruption.
In order to further improve the business climate and attract private investors, in the autumn of 2022 the government adopted an Investment Charter. This law aims to create permanent, high-quality jobs, reduce the differences between the provinces, gradually substitute local products for imports, and establish Morocco’s position as a regional and international centre for foreign direct investment.
As at: 10/03/2023