MOROCCO

Recession ahead, but reforms should pay off in the medium-run

B3

SENSITIVE RISK for enterprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

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GDP USD118bn (World Ranking 59, World Bank 2018)
Population 36mn (World Ranking 40, World Bank 2018)
Form of state Constitutional Monarchy 
Head of government Saadeddine Othmani (Prime Minister)
Next elections 2021, legislative
  • King Mohammed VI remains generally popular and rule by the monarchy is an acceptable form of governance for the majority of the population.
  • Sound commercial and diplomatic relations with the U.S. and the EU.
  • Geographic proximity to a very large potential market (Europe) for international investors and traders.
  • Although external debt stock has increased in recent years, debt servicing obligations remain manageable.
  • Poor corporate payment behavior: Days of Sales Outstanding was 84 days in 2018 (one of the longest in the world) and insolvencies are increasing as a result.
  • Wide gap between rural and urban standards of living.
  • Poverty and unemployment remain high and are a principal cause of social discontent and provide a potential breeding ground for religious militancy.
  • Weak record in relation to abuses of human rights and to press freedom.

Trade structure by destination/origin

(% of total)

Exports Rank Imports
Spain 22%
1
14% Spain
France 19%
2
13% France
India 4%
3
8% China
United States 4%
4
7% United States
Italy 4%
5
6% Germany

Trade structure by product

(% of total)

Exports Rank Imports
Electrical machinery (and related) 15%
1
12% Petroleum and related products
Clothing and apparel 14%
2
8% Road vehicles
Road vehicles 10%
3
8% Electrical machinery (and related)
Fertilizers 8%
4
4% Cereals, preparations
Vehicles Components 5%
5
4% Meat
The average DSO in Morocco remains high at 83 days on average in 2016 and the payment behaviour of domestic companies is rather poor.

  • Low

  • Medium

  • Sensitive

  • High

  • Payments

  • Court proceedings

  • Insolvency proceedings

The judiciary is a multi-layered system which remains under influence and is critcized for its lack of organisation, efficiency and transparency.  Therefore, commencing legal action would be unreasonable in most cases whilst enforcement judgments would be difficult. In all circumstances, entrusting collection specialists with a strong knowledge of the local market remains the wiser approach.

Various insolvency proceedings are available in Morocco but these remain complex, slow and mostly inefficient when it comes to collecting debt.

Contact

Contact Euler Hermes

Economic Research Team

research@eulerhermes.com

Country Risk Analyst:

Selin Ozyurt

selin.ozyurt@eulerhermes.com

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