Morocco is a constitutional monarchy with an elected parliament. The King of Morocco holds vast executive powers, including the possibility of dissolving the parliament. Executive power is exercised by the government but more importantly by the king himself. With a population of more than 35 million, according to a 2011 government census, the political capital is Rabat, and the largest city is Casablanca. Morocco has always been known for its Islamic liberalism and openness towards the Western world. Is trade in Morocco a good investment?
The Economy and how it plays a part in doing trade in Morocco
How does the economy play a part in doing business in Morocco? Morocco’s economy is considered a relatively liberal economy governed by the law of supply and demand. Since 1993, the country has followed a policy of privatization of certain economic sectors which used to be in the hands of the government. Morocco is the world’s biggest exporter and third producer of phosphorus. Price fluctuations of phosphates in the international market strongly influence Morocco’s economy. Government reforms and steady yearly growth in the region of 4–5% from 2000 to 2007, including 4.9% year-on-year growth in 2003–2007 helped the Moroccan economy to become much more robust compared to a few years ago.
Economic growth is far more diversified, with new service and industrial poles, like Casablanca and Tangier, developing. The agriculture sector is being rehabilitated, which in combination with good rainfalls led to a growth of over 20% in 2009. The services sector accounts for just over half of GDP and industry, made up of mining, construction and manufacturing, is an additional quarter. The sectors who recorded the highest growth are the tourism, telecoms, information technology, and textile sectors. Morocco, however, still depends to an inordinate degree on agriculture. The sector accounts for only around 14% of GDP but employs 40–45% of the Moroccan population. With a semi-arid climate, it is difficult to assure good rainfall and Morocco’s GDP varies depending on the weather. Fiscal prudence has allowed for consolidation, with both the budget deficit and debt falling as a percentage of GDP. The economic system of the country presents several facets. It is characterized by a large opening towards the outside world. France remains the primary trade partner (supplier and customer) of Morocco. France is also the primary creditor and foreign investor in Morocco. In the Arab world, Morocco has the second-largest non-oil GDP, behind Egypt, as of 2005.
Moroccan’s Major Business Resources
The major resources of the Moroccan economy are agriculture, phosphates, and tourism. Sales of fish and seafood are important as well. Industry and mining contribute about one-third of the annual GDP. Tourism and workers’ remittances have played a critical role since the Kingdom’s independence. The production of textiles and clothing is part of a growing manufacturing sector that accounted for approximately 34% of total exports in 2002, employing 40% of the industrial workforce. The government wishes to increase textile and clothing exports from $1.27 billion in 2001 to $3.29 billion in 2010. Additionally, Morocco was ranked the 1st African country by the Economist Intelligence Unit’ quality-of-life index, ahead of South Africa. Manufacturing accounts for about one-sixth of GDP and is steadily growing in importance in the economy. Two particularly important components of the country’s industrial makeup are processing raw materials for export and manufacturing consumer goods for the domestic market.
Is business in Morocco thriving? Overall, the Moroccan market seems like an emerging market for businesses. It also seems to be growing at a decent pace, with an estimated growth rate of 4.2% in 2010. Plus, with an estimated nominal GDP of $153,257 billion in 2010 and nominal GDP per capita of $4,740, there is still a fair amount of room for growth in the market. Morocco was also ranked 94th for Ease of Doing Business for 2012, by the World Bank. So Morocco still has a ways to go before it is considered a “hot” market.