Assessment of growth in Morocco
Study by the African Development Bank on the limits for inclusive long-term growth of the Moroccan economy
July 13, 2015
The prologue identifies three paradoxes which characterize the Moroccan economy and then attempts to provide responses: 1) a growth rate below its potential, held back by public and private consumption, while investment is among the highest on the planet (31.7% of GDP in 2012); 2) slow structural transformation, despite these figures; 3) little momentum in the private sector and small and medium-sized companies (SMEs), though these are the motor for innovation in the country.
The assessment which it offers is that of an economy with volatile growth linked to domestic demand. The economy is not very inclusive and has a limited impact on producing jobs, as well as a productive structure that seems almost frozen in time. It is not very competitive in exports and has an undynamic private sector.
An entire chapter is devoted to the cost of financing, considered one of the main conditioning factors on economic growth in the country, especially as regards access to bank credit and the high costs of financing for the private sector, as well as the results this has on companies’ operations.
The proposed reforms are aimed, on the one hand, at education, to improve the training and specialization of human resources, as well as schooling rates in the country, and on the other, at different microeconomic realms, such as improving the judicial system, considered extremely slow, the fiscal system, which is unclear and burdensome, access to mortgage credit, and regulation of the labor market. One of the most notable aspects in general is an overall lack of innovation in the economy, for which it proposes greater coordination between private role-players, those responsible for the value chain and the competent public entities. Last of all, ensuring greater long-term growth and sustainability is thought to be conditioned by making urgent improvements in health care services, infrastructures in isolated rural areas and management of energy and water resources.