Maroc Business Matters
January 17, 2014
“Maroc Business Matters” is a periodic report that reviews news highlighting Morocco’s economic progress, with a particular focus on what moves trade and investment forward. Unlike much of the region, where political turmoil continues to erode business confidence, Morocco is building its bona fides as the platform for business in Europe, Africa, and the Middle East.
Highlights of the 2014 Finance Law (budget)
Moroccan Finance Minister Mohamed Boussaid presented the country’s 2014 finance law, following recent reforms to the budgetary process which increased transparency and Parliamentary oversight over the formation of the budget.
The law features several measures that address specific trade and employment issues in Morocco:
- boosting exports by exempting import fees for raw materials used in the production of goods designed for export, which should dovetail nicely with increased Eurozone demand for Moroccan goods;
- establishing a new status of income for the “auto-entrepreneur,” which fixes income tax to 1 or 2 percent of turnover for the business. This is only the most recent move by Morocco to boost entrepreneurship, and should provide a considerable boost to small businesses;
- extending the suspension of import duties on soft wheat and its derivatives into the New Year.
- expanding fiscal neutrality guarantee for more citizens, notably allowing farmers to be considered companies and therefore taxed as corporations rather than as individuals;
- progressively reducing the budget deficit to 3.5% of gross domestic product (GDP) by 2016.
The Economist predicts 4.1% GDP growth in Morocco in 2014.
The Economist Intelligence Unit’s analysis of key economic issues in 2014 for the Middle East and North Africa (MENA) cited Morocco as a likely beneficiary of increasing Eurozone demand and forecasts an increase of GDP growth by 4.1%, up from strong growth of 4% last year.
This estimated growth is the highest among North African countries, and higher than the forecasted growth for the MENA region as a whole (3.6%), as well as the projected growth for oil producing countries in the MENA region (3.8%).
The numbers demonstrate confidence in Morocco’s continued strong growth in the wake of the Eurozone crisis. Finance Minister Mohamed Boussaid on January 8th agreed that “The Moroccan economy is on track.”
Biztech Africa – IT sector booming in Morocco
A report by BiztechAfrica noted that “the Moroccan IT services market is set to expand at a compound annual growth rate (CAGR) of 10.3% over the coming years to total $472.37 million in 2017.”
Citing a report by the International Data Corporation (IDC), Biztech Africa noted that the expansion of the Moroccan banking and telecommunications industries, as well as large government-led infrastructure projects, are driving the growth of IT services in the country.
IDC believes that the increasingly maturing Moroccan IT services market will further benefit from increased competition and the embracing of new technologies.
Morocco is already the most connected country in Africa, and this growth demonstrates a commitment to maintaining that standing to the benefit of consumers and the greater economy.
Morocco provides honest assessment of employment needs for the future
Moroccan Minister of Employment and Social Affairs Abdeslam Seddiki told Moroccan newspaper L’Economiste that Morocco would need steady 6% GDP growth just to maintain current employment levels.
The Minister intends to focus on innovation and infrastructure development, as well as the improvement of existing jobs programs to remedy unemployment and fill the gap between unemployment and real GDP growth.
The announcement sets the table for continued reform in 2014 as Morocco continues to combat unemployment and develop the economy. Jean AbiNader has more analysis here.
- Morocco’s trade deficit narrowed to 2.8% in 2013.Prospects for oil and green energy production should help to further reduce this number in 2014 and beyond.
- The Casablanca Stock Exchange had a solid week, featuring three consecutive days of positive performance.The stock exchange looks to promote itself and finish 2014 in the black.
Look for more economic news on Morocco in the next posting of Maroc Business Matters.