Morocco

In-depth country-focused analysis on Morocco's economic, political and operational risk environment, complemented by detailed sector insight

Morocco

Our comprehensive assessment of Morocco's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Morocco, as well as the latest industry developments that could impact Morocco's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Morocco before your competitors.

Country Risk

Morocco Country Risk

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Core Views

  • Despite not possessing hydrocarbon wealth, the economy will remain a relative outperformer in North Africa over the medium term. Investor interest in the country as an export-oriented manufacturing hub for the European market, coupled with a burgeoning tourism industry, should bode well for Morocco's underlying growth momentum in the next few years.

  • We expect the Moroccan economy to experience weak growth throughout 2014, after having reaped benefits from an agriculture-based recovery in 2013. However, we see growth accelerating over the early months of 2015, due to a strong external environment and improvements in domestic demand and liquidity. We have revised our growth forecasts upward, and see the economy expanding by 2.9% in real terms in 2014 and 4.0% in 2015 (compared to our previous projections of 2.8% and 3.7%).

  • The...

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Morocco Country Risk

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Core Views

  • Despite not possessing hydrocarbon wealth, the economy will remain a relative outperformer in North Africa over the medium term. Investor interest in the country as an export-oriented manufacturing hub for the European market and increasingly to West Africa, coupled with a burgeoning tourism industry, will bode well for Morocco's underlying growth momentum in the next few years.

  • Morocco's foreign policy will remain stable over the coming years, aimed at strengthening its relationship with the EU and the GCC and looking to West Africa for trade and investment opportunities. The Western Sahara issue will remain at the forefront of Rabat's foreign policy agenda, and we do not see any significant progress taking place in the near future.

  • Morocco will outperform in the MENA region in 2015 and 2016, on the back...

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Morocco Operational Risk Coverage (9)

Morocco Operational Risk

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BMI View: Morocco offers investors a number of strategic advantages across operational risk environments, including an integrated supply chain network, an openness to foreign investment, and well developed financial markets . However, key risks include low levels of educational attainment, which dampen the competitiveness of the work force within the broader regional labour market. As a result, businesses may face elevated labour costs and limited availability of skilled workers. Finally, Morocco has one of the highest income and personal tax rates in the MENA region, representing a notable drawback to operational cost competitiveness. Taking these factors into account, Morocco ranks tenth in the region for Operational Risk, meriting a score of 47.0 out of 100. In this regard, Morocco outperforms all of its North African neighbours excluding Tunisia, which scores 50.1 out of 100, in ninth place out of 19 MENA countries....

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Morocco Crime & Security

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BMI View: Morocco offers a generally safe location for foreign workers and businesses, with a lower risk from crime and terrorism than many of its North African neighbours. Having said that, foreigners are susceptible to petty crimes such as bag snatching, and there is a wider threat from terrorist activity due to Morocco's proximity to the base of operations of al-Qaeda in the Islamic Maghreb (AQIM). Morocco also faces tensions due to its occupation of the Western Sahara, which has soured relations with neighbouring Algeria and the wider African Union. Although it is unlikely to lead to full-scale armed conflict, this dispute weakens Morocco's international position and its capability for regional cooperation regarding non-state threats such as AQIM....

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Morocco Labour Market

Morocco Logistics

Morocco Trade & Investment

Morocco Industry Coverage (11)

Agribusiness

Morocco Agribusiness

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BMI View: Morocco's agriculture sector holds significant potential, particularly the dairy, poultry and sugar industries. The dairy sector benefits from growing interest from international dairy companies and is likely to enjoy strong growth in the coming years. Our optimism is bolstered by the government-initiated Green Morocco Plan, which is likely to see increased investment in an effort to reduce the industry's weather-related production risks out to 2020. We believe that the twin strategies of producing high-yield and...

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Autos

Morocco Autos

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BMI's view that 2015 should mark a stronger year for new vehicle sales than 2014 has been borne out by upbeat first quarter data released by Morocco's Vehicle Importers Association (AIVAM), as cited by the French language quid.ma website in April 2015. According to these cited figures, total new vehicle sales rose by 4.6% year-over-year (y-o-y) over Q115, to 28,906 units. This was made up of 25,831 passenger cars (+4.9%) and 3,075 light commercial vehicles (LCVs) (+2.5%).

Looking forward, BMI's Country Risk team believes that Morocco will outperform the MENA region in 2015, on the back of a good harvest, improvements in the external sector, and a strong investment outlook. We have increased our forecasts for real GDP growth to 4.5% in 2015 and 4.0% in 2016 , significantly up from 2.6% in 2014.

Turning...

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Food & Drink

Morocco Food & Drink

Infrastructure

Morocco Infrastructure

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BMI View: We are forecasting positive growth in Morocco's construction sector in 2015 based on extensive government investment in a range of infrastructure projects. Morocco is improving its road, rail and air travel connections, upgrading port facilities, addressing the housing shortfall and building a substantial tourism infrastructure base. The country is also keen to realise ambitious renewable energy targets, resulting in a wide range of solar and wind power projects entering the pipeline.

Morocco is open to foreign direct investment and is also the target of a multitude of international development financing programmes, benefiting from its strategically strong geographic position. There are ongoing concerns relating to corruption in the tender process and delays to ongoing projects, as well as regional political unrest, which could undermine confidence in Morocco's infrastructure sector,...

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Insurance

Morocco Insurance

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BMI View : We see significant potential in North Africa for insurers. However, continued economic constraints will hamper the full development of the sector over the short term, particularly the non-life segment. That being said, strong government impetus in much of the region to augment health insurance density will boost penetration over the medium term. However, we continue to expect life insurance will underperform in comparison to non-life insurance, owing to the disinclination among much of the population to purchase life insurance policies when household budgets are tight....

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Morocco Insurance

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BMI View: Morocco's insurance sector should achieve steady, single digit growth during the forecast period. This is substantially due to the steady growth in the economy, which should boost most sub-sectors of the non-life segment and the life segment as a whole. Particular sub-sectors of the non-life segment should also receive a boost from the introduction of compulsory lines. However, the comparatively slow growth of the important (but stable and profitable) market for motor vehicle insurance will hold back the overall growth in premiums in Morocco. In Algeria, the key development is the near certain rise in motor vehicle insurance rates. The line has been unprofitable, and the insurers are taking steps to address this. Other sub-sectors of Algeria's non-life segment should benefit from steady...

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Medical Devices

Morocco Medical Devices

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BMI Industry View: The Moroccan market remains small, both in overall terms and also in per capita terms, leaving room for further development. With minimal medical device production, focused primarily on consumables, Morocco remains highly dependent on imports mainly from the EU, and this trend is set to continue during the forecast period.

Headline Industry Forecasts

  • In 2013, the medical device market is estimated at USD235.8mn. Per capita spending at around USD7 remains low, leaving considerable potential for further expansion. The market is forecast to grow at a US dollar 2013-2018 CAGR of 7.0% taking expenditure to USD331.4mn.

  • Medical device...

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Mining

Morocco Mining

Pharmaceuticals & Healthcare

Morocco Pharmaceuticals & Healthcare

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BMI View: A new wave of drug price cuts in Morocco and the implementation of the final stage of its universal healthcare coverage programme will see an improvement in the population's access to medicines. While increasing access to medicines is positive for drugmakers, we highlight that the Moroccan pharmaceutical market will become increasingly challenging for innovative drugmakers due to the lack of clarity regarding further medicine price cuts and the increasing market share of generic medicines.

Headline Expenditure Projections

  • Pharmaceuticals: MAD10.63bn (USD1.13bn) in 2014 to MAD11.33bn (USD1.21bn) in 2015; +6.6% in local currency terms and +7.4% in US dollar terms.

  • Healthcare: MAD62.77bn (USD6.67bn) in 2014 to MAD67.97bn (USD7.28bn) in 2015...

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Telecommunications

Morocco Telecommunications

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BMI View : North Africa's telecommunications markets are on the cusp of change, with the licensing of 4G LTE services at the forefront of this change. 4G licences were auctioned and issued to the three existing players in Morocco in March 2015, while the authorities in Tunisia are fast-tracking the licensing of 4G with a view to seeing services launched commercially in 2016. LTE technology is already being deployed in Algeria, which is unexpected seeing as that country has historically lagged its neighbours. Increased state control over the three mobile operators in Algeria remains a concern, however. Libya is still left out of this development trend, with insecurity and political stability delaying a much...

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Tourism

Morocco Tourism

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BMI View: The Morocco tourism report examines a range of key indicators for the tourism market in this popular North Africa destination, including the prospects for growth in terms of inbound arrivals and outbound departures throughout our current forecast period to 2018. Benefiting from a stable political environment and increasing levels of foreign investment, we expect to see healthy growth in industry value and tourism-related expenditure as Morocco continues to attract greater numbers of visitors from a range of different markets.

Morocco benefits from its geographical proximity to key markets in Europe and its perception as a stable destination in a region where many countries have seen widespread political unrest, which has deterred potential visitors. The country is...

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  • Morocco's economy will outperform in the MENA region in 2015 and 2016, on t...