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 (12)

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 market-related agriculture, as well as...

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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

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BMI View: The mining sector of the Middle East and North Africa will see strong growth in over the coming years. With low base effects, governmental will to increase non-oil revenues and significant resources it appears the region is set for strong growth. We highlight Turkey and Northern Iraq as key areas for growth. That said, the region will remain peripheral in the global mining sector as it continues to underperform due to political instability in much of the region.

The key issue in the Middle East's mining sector presently is Iran's ongoing negotiations with Western powers. Our core scenario is for sanctions to be eased from Q315 which will have be a game changer for the country's beleaguered mining industry and could make the country a key centre of global mining investment in the coming years...

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Pharmaceuticals & Healthcare

Morocco Pharmaceuticals & Healthcare

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BMI View: Similar to other North African markets, Morocco's inclusion on PhRMA's Special 301 Submission for 2015 for intellectual property and pricing issues highlights the ongoing challenges that multinational drugmakers face in the market. However, we expect innovative drugmakers to continue seeking opportunities in Morocco, particularly with recent updates to the intellectual property law that highlights the country's commitment to improving the operating environment for multinationals.

Headline Expenditure Projections

  • Pharmaceuticals: MAD12.12bn (USD1.44bn) in 2014 to MAD12.99bn (USD1.35bn) in 2015; +7.2% in local currency terms and -6.5% in US dollar terms. Forecast revised upwards from last quarter.

  • ...

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Renewables

Morocco Renewables

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BMI View: The development and planned expansion of Morocco's flagship utility-scale solar project underscore our view that the country has the potential to become a key renewables hub in North Africa. Development bank financing will underpin foreign investment in this emerging renewables sector as the government attempts to lessen Morocco's reliance on imported fuels and keep pace with growing demand for electricity.

Morocco has the potential to transform itself into a North African renewables hub and the solar segment in particular is a major investment bright spot. Last quarter we made a substantial upward revision to our forecasts for installed solar capacity to reflect this view, and funding has continued to flow into projects. Favourable climactic conditions, government efforts to reduce reliance on expensive imported fuels, a robust project pipeline and ambitious, solar...

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Telecommunications

Morocco Telecommunications

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BMI View : Markets in North Africa are quickly evolving from being voice-centric towards becoming data-centric, with mobile broadband being the core driver in all markets. 3G services have been launched with success in Morocco, Algeria and Tunisia, and the licensing and roll-out of 4G services is also on track. Success is dependent on the overall macroeconomic situation, with higher purchasing power helping with the development of the telecoms market, while the security situation is always at the forefront in the region. All markets have a mix of public and private operators, though liberalisation is not present in all sectors, and the competition has always driven greater uptake in the region...

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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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