Situation and cooperation

A household goods retailer in Rabat, Morocco

Living conditions are difficult for many Moroccans. There is a wide gap between rich and poor. The Human Development Index 2014 (HDI) published by the United Nations Development Programme (UNDP) ranks Morocco 126th out of 188 countries listed. The country's illiteracy rate remains around 30 per cent of over-15-year-olds, which is one of the highest rates in the Arab world.

The situation is particularly difficult in rural regions, where significantly fewer people have access to education and health services than in towns and cities. This is why many people in rural areas migrate to the country's towns and cities, exacerbating problems there.

The government is focusing on development. One priority of its policy since 2005 has been the implementation of the National Human Development Initiative (Initiative Nationale pour le Développement Humain, INDH), which the government adopted in collaboration with the World Bank and the EU. The purpose of the INDH is to fight poverty and social exclusion.

The government also produced a national programme on gender equality for the years 2012 to 2016. It contains ambitious goals with regard to empowering women and girls politically, socially and economically.

Morocco has increasingly become not only a country of transit but also a country of destination for refugees and migrants from sub-Saharan Africa. The growing number of migrants is leading to increased social tensions. In 2014, the government adopted a strategy devoted to migration and asylum issues, a first in the region. In order to fill the strategy with life at the local level, the authorities now need to provide opportunities for migrants and refugees to integrate at cultural, economic and social level.

Economic situation

Apparel factory near Tangier, Morocco

Morocco is currently going through a far-reaching process of transformation from an agricultural economy into one based on manufacturing and services. The economic framework and investment climate have improved in recent years. However, the economy is influenced by factors that are difficult to control, and is therefore prone to strong fluctuations. These factors include harvest yields, which depend on the weather; the economic situation in its two main trading partners, France and Spain; as well as the remittances sent home by the many Moroccans living abroad.

The market liberalisation facilitated by the Association Agreement between Morocco and the EU offers vast opportunities, but it also entails great challenges. The innovative capacities, product safety and quality standards offered by Moroccan businesses are gradually being brought into line with EU standards. Yet Morocco is still insufficiently integrated into the world market. One challenge is vocational training, with people's levels of skills either being too low or failing to meet the needs of the market.

The country is offering investment incentives in order to attract foreign investors. Promising industries include automotive suppliers, electrical engineering, renewable energy, mechanical engineering, infrastructure and construction, environmental services (water, waste, recycling), and agriculture.

The greatest challenge for the Moroccan economy continues to be the high level of unemployment. It is now officially around 10 per cent, with a much higher rate among young people.

Around 40 per cent of the working population is employed in agriculture, which is increasingly suffering from a scarcity of water resources and extreme weather events. This is one more factor contributing to the high number of people trying to make a living in the informal sector. Just under 40 per cent of gross national income is generated in this sector, which accounts for more than a third of all non-agricultural jobs.

Development potential

Wind farm near Tangier, Morocco

Morocco possesses great potential for development in the area of renewable energy. The conditions for exploiting solar and wind energy are so favourable that, by tapping these sources, Morocco would not only be able to cover its own energy needs, it could also export electricity to Europe.

One key industry is tourism. The government is making considerable efforts to expand tourist infrastructure significantly. Although terrorist attacks on tourist destinations in 2011 caused a temporary decline in foreign exchange earnings from tourism, revenues have gone up again since 2012.

Opportunities for development and employment can also be found in the supply sector for the automotive and IT industries and in the aeronautic industry. And Morocco has become an important site for IT services, especially call centres and software operation and development. The government is also planning to boost the agricultural and fisheries sectors, by increasing investments and creating new jobs.

In order to advance the country's integration within the world trade system, the deepwater port of Tanger-Med was built, and one of several free trade zones was created there. It has concluded relevant treaties with the European Free Trade Association (EFTA) and with the US. The regional Agadir Agreements on free trade concluded in 2004 with Egypt, Jordan and Tunisia – which were supported by the EU – have since come into force. In 2012 and 2014, Morocco concluded agreements with the EU on agriculture and fisheries. At present, negotiations are under way for a comprehensive agreement on trade and services to replace the Association Agreement of 2000.

Priority areas of German-Moroccan cooperation

In 2016, the BMZ committed a total of 845 million euros to Morocco. Of this amount, 37.5 million euros are earmarked for Technical Cooperation. 807.5 million euros was earmarked for Financial cooperation, including 803.5 million euros in loans.

Under the German government's special initiative for the MENA region, this money will be used, in particular, to help create jobs for young people and stabilise the economy.

The Governments of Morocco and Germany have agreed on the following priority areas for cooperation:

  • renewable energy,
  • the use and management of water resources,
  • sustainable economic development.

There are also projects in the field of environmental protection and climate change adaptation, as well as in migration in order to facilitate the integration of migrants at local level. Poverty reduction, gender equality, good governance and employment are aspects that have been mainstreamed in all projects.

Renewable energies

Solar power plant in Ouarzazate, Morocco

Morocco has been almost completely dependent on fossil energy imports to date. At the same time, it is one of the countries in the world that is best placed to meet its energy needs through wind and solar power. The government has launched a new policy to transform the energy system, placing renewable energy and energy efficiency at the heart of a new national strategy. It is envisaged that, by 2020, 42 per cent of installed power capacity will come from renewable sources. By 2030, that figure is to increase to 52 per cent. 

Since the beginning of 2008, Germany has been successfully advising Morocco on legislation and on developing institutional and technical capacities in the field of renewable energy and energy efficiency. In June 2012, the Moroccan-German energy partnership was forged with a view to improving the pooling and management of German and Moroccan activities in this field and getting the private sector more involved.

Cooperation between Morocco and Germany has included pioneering work in the area of wind power: Germany financed the first wind farm in the region a good ten years ago, and is continuing to provide low-interest loans to support the construction of new wind power plants. Germany is also providing support for the construction and expansion of solar and hydropower plants.

For example, the BMZ is supporting the construction of a complex of several solar power plants in Ouarzazate at the foot of the Atlas Mountains. Work on the plant began in summer 2013. The first plant started operating at the end of 2015, supplying power for around 530,000 people. It was officially opened by the King of Morocco in early February 2016. It is envisaged that the public-private partnership (PPP) in Ouarzazate will create the world's largest solar park.

The BMZ is also supporting the construction of further plants to generate electricity from sunlight, and it is helping to foster joint projects with German solar companies, as well as exchange between German and Moroccan research institutions.

The Moroccan government's strategy is being complemented by a programme aimed at improving the energy efficiency of public buildings. Ultimately, the programme is to create incentives and financing options for saving energy in the construction sector. Care is being taken to ensure that work is carried out in cooperation with local companies so that local personnel can build or improve their skills and local jobs can be created.

Use and management of water resources

Water treatment plant in Morocco

In rural parts of Morocco, some of the population still have no access to safe drinking water. In the towns, the disposal of domestic sewage and industrial effluent is a major problem. That is why Moroccan-German programmes have concentrated on improving groundwater and water management.

In recent years, the percentage of Morocco's urban population connected to drinking water supplies has been increased from 80 to almost 100 per cent with German support. Cooperation in this field also focuses on wastewater management and rural drinking water supply: drinking water networks, water purification and treatment plants, and irrigation and sewage systems have been built or restored.

The greatest challenge is the increasing scarcity of water. Population growth, progressive industrialisation, a growing tourism sector and an agricultural sector requiring large amounts of irrigation are all contributing to a drop in the country's groundwater table. In future, climate change will have a further impact on Morocco's water resources. Therefore, it is crucial that the government's ambitious and much-needed programmes for industrial and agricultural development are made sustainable. Cooperation between Germany and Morocco in the water sector is thus part of a wider integrated water resources management strategy, which seeks to reconcile environmental protection and climate action with the imperatives of economic development and the needs of the local people.

Sustainable economic development

Repayment of a microcredit in Rabat, Morocco

Morocco's economy is hampered by volatile growth and a low level of international competitiveness. Unemployment is high, especially among women and young people. According to a 2012 World Bank study, about half of all young people between 15 and 29 years of age are neither employed nor enrolled in vocational training.

Germany's programmes focus on supporting micro, small and medium enterprises (MSMEs), as they can create particularly high numbers of jobs. Germany is providing advice to the Moroccan government and to industry associations on the development of strategies to help MSMEs tap their potential for growth in line with the needs of an environmentally sound social market system.

One important aim is to promote growth and employment outside Morocco's large industrialised conurbations. That is why German support focuses on MSMEs based in the provinces. Their particular problem is inadequate access to loans and other financial services. That is why the BMZ is supporting the setting up of a refinancing fund so that Moroccan financial institutions can provide more microloans. The principal beneficiaries are micro enterprises in the informal sector.

In order to reduce youth unemployment and underemployment, the German government is supporting vocational training programmes, particularly in rural areas. Currently, training programmes in Morocco do not give sufficient attention to the needs of the labour market. That is why Germany's support is geared towards giving industry a role in the training set-up.

The projects in this field include measures to empower women, whether as entrepreneurs or as employees. There are education campaigns to challenge traditional ideas about gender roles; mentoring programmes strengthen women's networks and organisations; and enterprises receive advice on how to make jobs more family-friendly.

Climate change mitigation and adaptation

An employee of a water treatment plant in Morocco checking the water quality

Urbanisation and industrialisation are putting an increasing strain on people and on the environment in Morocco. Domestic wastewater and industrial effluent flow untreated into the water system. Growing mountains of waste and industrial air pollution are a health hazard for people in cities, and the impacts of climate change are beginning to disturb the balance of the country's sensitive ecosystems. The situation is further aggravated by the fact that monitoring and sanctions are not yet being applied to a sufficient degree, as well as by the very low level of environmental awareness among the population at large.

Morocco has proved its commitment to pursue climate action and environmental policies on the international stage. In November 2016, it hosted the United Nations Climate Conference (COP 22) in Marrakech. During the conference, important steps were taken to implement the Paris Climate Agreement. The German government, in collaboration with Morocco and the World Resource Institute, launched a global climate partnership that is intended to provide support to developing countries in particular so that they can implement the Paris agreement.

Moreover, in its environment-related activities, Germany is focusing particularly on supporting Moroccan institutions, for example with the drafting of legislation and of environmental standards for industry. For instance, a ground-breaking law on solid waste has been drafted with German assistance. The establishment of a regional training programme for environmental impact assessments has enabled the authorities to assess the environmental impacts of construction and investment projects in advance. The Moroccan and German sides have also succeeded in establishing master's degree programmes on industrial waste management.

German experts are advising the Moroccan government on how to prepare their delegations for international climate conferences, and on how to design a tax reform with an ecological dimension.

Governance, democracy and migration

Migrants waiting in the Gourougou Mountains (Morocco) for an opportunity to cross the border to the nearby Spanish enclave of Melilla

In June 2011, a new constitution was adopted in Morocco. It brought progress on the balance of political power and helped to empower disadvantaged groups. Gender equality within the framework of a Muslim society is enshrined in the new constitution. The Amazigh language of the Berbers, which is mainly used in Morocco's rural regions, was recognised as a second official language, alongside Arabic. The status of the National Human Rights Council was raised. The Council has now been made into an institution protected under the constitution.

The process of drafting a new constitution raised high expectations among the people. Many of the newly established fundamental rights still have to be filled with life.

Germany is supporting Morocco in its reform efforts in areas such as citizen responsiveness, local government and asylum policy. Germany is also providing training for the National Human Rights Council. And the German government is supporting various German political foundations which are engaged in activities in Morocco, thus helping to strengthen the principles of democracy and the rule of law, including a multiparty system.

Municipalities also have a special role to play in the reform process. However, local authorities and municipal service providers do not always have the requisite resources, experience and capacity to meet these aspirations. Germany is supporting municipalities in devising and implementing innovative projects, concerned, for example, with waste management, energy efficiency, transport policy and services for citizens. Wherever Germany is supporting such projects, it has made the inclusion of civil society organisations a priority.

In view of the difficult economic and social situation in Morocco, many Moroccans are looking for ways of finding a better life in Europe. But the country is also a transit zone for many people from sub-Saharan Africa.

In response to this situation, Morocco has adopted a strategy on migration and asylum policy. Germany is supporting the country in implementing this strategy at the local level and in creating opportunities for migrants to become integrated. Special care is being taken to ensure that the support always benefits the host communities as well. As a first step, people from local authorities and civil society representatives are being trained in how to organise language classes, skills development courses and legal advice for migrants.

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