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Driving More Opportunities in the Moroccan Economy – Jean R. AbiNader

Jean R. AbiNader
June 25, 2019

Jean R. AbiNader, Moroccan American Center

Demographics and diversity are two constant challenges for Morocco’s economic growth strategy. With a strong cohort of youth under 35 looking for jobs and an economy that still relies on sectors with limited rates of employment, Morocco is always seeking to find ways to expand opportunities for youth, especially through skills training that prepares them to meet market needs.

Recently, Fitch Ratings reaffirmed the country’s BBB-rating, which highlighted this reality – stability but limited growth. Fitch predicted a shrinking fiscal deficit and falling inflation so internally, conditions are stable for growth initiatives. Currently, Morocco’s economy is based on four pillars, with a fifth emerging that will greatly enable Morocco’s efforts at diversification. These four include the fact that Morocco has about 75% of the world’s phosphate reserves. It also has a tourism industry that continues to grow and absorb youth into that sector.

Of course agriculture is the third sector and is undergoing changes that will enable it to incorporate more technology and stability to grow more profitable and sustainable in the coming decade. This sector provided an estimated 250,000 new jobs during the past 10 years. It should come as no surprise that the fourth pillar is energy from all sources, which the government has targeted as a growth priority including renewables and new sources of commercial quantities of gas as they come on line.

The fifth sector, manufacturing, includes well-known initiatives in automotive and aeronautical industries, as well as textiles, food processing, and downstream fertilizer products. At the same time, the Moroccan education and training sector is slated to become more market demand driven so that students can take advantage of opportunities as the economy diversifies.

Among concerns raised by Fitch Ratings are uneven levels of development regionally, high levels of public debt, and large budget and current account deficits. According to Intissar Fakir, one of the biggest changes in Morocco is the uneven distribution of economic benefits by region, reflecting weak government oversight of labor parity issues, as well as political decisions to advance services in some regions to quell potential instability. The Fragile States Index ranks Morocco 78thof 178 countries, in the “elevated warning” category. Regional political instability can also affect Morocco’s future. In addition to problems affecting other Maghreb countries, UNCTAD estimates that Morocco could lose over $97 million in exports if the UK leaves the European Union without a clear deal.

Given the outsized role that small and medium sized enterprises play is creating jobs, and the preference of more than a third of Moroccan graduates to own their own businesses, the country and private sector continue efforts to support entrepreneurship and enterprise development. According to an article in Morocco World News“In an effort to re-energize Morocco’s dynamic populous, the government has set a goal to guaranteeing work opportunities for 67.2% of the populace by attempting numerous projects to support enterprise among the nation’s youth.” This includes regulations affecting hiring, taxes, and fee structures for start-ups. However, the country still lags in generating a dynamic funding structure for entrepreneurs and new companies as financing conditions are difficult to meet.

“The entrepreneurial ecosystem is still young,” says Otmane El Hassani, Entrepreneurship Network Director, at OCP. “Lack of support, experts, and mentors that could support entrepreneurs, differentiated geographical coverage in terms of resources, and the availability of capital not only beyond the seed stage, are all barriers to the creation and sustainability of a company at the national level.”

Currently, there are a number of organizations and entities to assist entrepreneurs through seminars, events, mentoring, labs, shared space, and coaching. “INJAZ Al Maghreb, ENACTUS, Start Up Your Life, and MCISE are different associations that positively impact individuals’ lives by helping them begin a business and by providing long term support.” Working primarily in urban areas, it is hoped that efforts can be expanded to rural areas in the coming decade.

International donors also work with Moroccan entities to provide entrepreneurship training and support. The British Council, the World Bank, and USAID, as well as various EU organizations are engaged in supporting young businesses and entrepreneurs through a variety of business competitions, organizing events, and experts.

In the high tech job world, one of the key skills for getting a high value job is acquiring coding skills. An NGO with long experience in Morocco is Education for Employment, and Hamza Debbarh, one of its local board members, is building a program to expanding access to coding skills for young Moroccans. The effort is called 3W Academy Maroc, and was originally developed in France. “Its main program is a 3-month web development boot camp that is open to students regardless of their technology background. Students work on real projects and participate in internships, using an online platform common to all 3W Academy schools.”

Faced with a youth unemployment rate of 24% at the beginning of 2019, this skill-focused training has the potential to transform lives. “We create opportunities for people through technology — people with no background in tech, who work low-paying jobs or have degrees that haven’t been useful,” says Mahdi Lafram, head of communications and community at 3W Academy.

Youth unemployment is steep in Morocco: One in three Moroccan graduates of higher education institutions cannot find a job, according to a Reuters report.This is where coding can make a difference since one doesn’t need to be in a specific location to use the skill set. Both the 3W Academy and a similar program in Youssoufia called YouCode, train students regardless of their background, aiming to make jobs in the tech sector accessible to underrepresented groups, including women.

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