The economic context of Morocco

Main Sectors of Industry

Given the richness of Morocco's soil, the economy is dominated by the agricultural sector, which employs one-third of the workforce and contributes 12% of GDP (World Bank, latest data available). Barley, wheat, citrus fruits, grapes, vegetables, argan, olives, livestock and wine are the country's main crops. In recent years, the government has focused on the sector through its "Green Morocco Plan" and the Agricultural Development Fund. The country’s cereal production is highly variable, with local dams providing irrigation for only 15% of the agricultural land and rainfed agricultural production accounting for 85% of the aggregate output (FAO). According to preliminary data by the Ministry for Agriculture, the agricultural sector’s value-added decreased by 14% year-on-year during the 2021/22 crop year. The production of the main cereals (common wheat, durum wheat and barley) for the 2021/2022 crop year was estimated at 32 million quintals, down 69% from the previous year's record production, also due to the drought experienced by the country: at the end of April 2022, a rainfall level of 188mm was recorded, which is 42% lower than the average for the last 30 years (327 mm) and 35% lower than the previous year (289 mm).

Industry contributes 26.1% of the GDP and employs 23% of the workforce. The main sectors are textiles, leather goods, food processing, oil refining, and electronic assembly. However, new sectors have been booming: chemistry, automotive parts, computers, electronics and the aerospace industry. The automotive industry, in particular, has been growing in the last decade, with double-digit annual growth in terms of job creation and exports (becoming the country’s main exporting sector and Africa’s main automotive hub). Overall, the manufacturing sector is estimated to account for 15% of GDP. The emergence of new industries should allow the country to reduce its dependence on the agricultural sector. Morocco’s industrial sector is the largest beneficiary of foreign direct investment. The country has around 75% of the world's estimated reserves of phosphates, and the mineral sector accounts for almost 30% of exports (Oxford Business Group). Mining accounts for 10% of GDP, of which 90% derives from phosphates.

The services sector accounts for slightly above half of GDP (51.6%) and gives employment to 44% of the workforce. It is spearheaded by real estate and tourism, which has been very dynamic in recent years (accounting for around 11% of GDP and hitting a record of nearly 13 million arrivals in 2019). Although tertiary activities recorded a downward trend following the outbreak of the COVID-19 pandemic, with a particularly weak tourism performance, improvements were achieved in 2022 when tourist arrivals reached 84% of the pre-pandemic level and the value tourist receipts in foreign currency stood at MAD 81.7 billion at the end of November 2022 (data Ministry of Tourism). Finally, the Moroccan banking sector is dominated by locally owned banks, which account for more than 80% of industry assets (U.S. Department of Commerce).

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Indicator of Economic Freedom

Definition

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

Score:

63,3/100

World Rank:

81

Regional Rank:

9

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation