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, coupled with a burgeoning tourism industry, should bode well for Morocco's underlying growth momentum in the next few years.

  • Economic activity in Morocco will pick up from 2015 onward, driven by improvements in the external sector and investment outlook. Real growth will return to 4.0% in 2015 and 2016 - close to the past decade's annual average, and up sharply from our estimate of 2.6% for 2014.

  • The renewal in July 2014 of Morocco's credit line with the International Monetary Fund (IMF) will help to support the economic recovery that we forecast from 2015 onward. Although less necessary than the...

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Morocco Operational Risk Coverage (9)

Morocco Operational Risk

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Morocco's integrated supply chain network, developed financial markets and openness to foreign investment make the country a potentially attractive investment destination. However, the comparatively small size of the country's skilled-labour pool means that companies face elevated labour costs and limited labour availability. In addition, Morocco's business environment is stymied by some of the highest income and personal tax rates in the region.  

We identify the most pressing risks as emanating from the labour market, and the lack of basic education in the work force. This increases businesses' need to import foreign professionals, which can heighten overall labour input costs through relocation fees and insurance premiums, as well as time taken to find employees willing and able to relocate. Input costs are increased further by Morocco's high percentage of labour tax and contributions, which is the sixth highest in...

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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. Overall, Morocco scores...

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Morocco Labour Market

Morocco Logistics

Morocco Trade & Investment

Morocco Industry Coverage (10)

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 is benefiting from growing interest from international dairy companies and is likely to enjoy strong growth in the coming years. In the livestock segment , we expect increased government support and investment - backed by strong domes tic demand - to help the industry to develop. However, the lack of investment in modern infrastructure will hamper production growth in the short ter m. We expect long-term production growth in the country's all important grain sector due to government support, but even with the record crops in 2013/14 the country remained a net importer. We...

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Autos

Morocco Autos

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The local Auto Expo Show - held in Casablanca in mid-May 2014 - acted as something of a fillip to what had been a largely lacklustre new vehicle sales performance over the first four months of the year. Indeed, following a very successful period for new passenger car sales over both May and June, a process began by the Auto Expo, H114 new passenger car sales were up by 1.67% year-on-year (y-o-y), at 57,723 units.

However, the performance of commercial vehicle sales continued to disappoint, down by 11.9%, to just 6,247 units, underlining the still-sluggish nature of the Moroccan economy. In total, 63,970 new vehicles were sold in Morocco over H114, according to figures from the Association of Vehicle Importers (AIVAM), representing a slight 0.16% rise y-o-y.

The Q214 performance (of over 36,000 new vehicles sold) was a marked improvement on the 27,630 vehicles sold over Q114 and could potentially mark the start of a...

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Food & Drink

Morocco Food & Drink

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BMI View:   We continue to hold a negative short-term view on Morocco's food and drink industry and forecast per capita food consumption to expand only by 1.3% in 2014. Moroccan households remain squeezed by limited credit availability, recent removal of fuel subsidies and value-added tax increases for food items introduced in 2014. That said, minimum wage hikes planned for 2014 and 2015 and expectations for stronger economic growth in 2015 pose strong upside risk to our forecasts. Our longer-term view for Morocco's food and drink industry is more positive, as it will benefit from ongoing structural reforms, the country's promising demographic profile and sizable investment in tourism.

Headline Industry Data (local currency)

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Infrastructure

Morocco Infrastructure

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BMI View: There has been a revision to our forecasts for 2014 due to a change in our historical data which indicates that the Moroccan construction industry experienced real growth of around 4.2% in 2011, with the sector recovering from the period of relatively subdued growth seen in 2009 and 2010. The country has a healthy pipeline of infrastructure projects especially for r enewable energy, multilateral financing and a strong economic growth outlook of GDP growth forecast at 2.8%. 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 sector to continue on this strong growth...

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Insurance

Morocco Insurance

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BMI View :   We believe life insurance penetration in the North African region will remain low due to the lack of affordability among households . Furthermore, we see an increasingly likelihood of consolidation among the regional markets in the coming years due to the large number of sub-scale insurers which lack capital. We also see an opportunity for the larger insurers to expand beyond their domestic shores into other African markets. 

Life penetration in all the four countries profiled in this report - Algeria, Morocco, Tunisia and Libya - is low and we expect it to remain so over the coming years due to the low levels of income of many households. However, Morocco is the only country where life insurance has become somewhat established as a conduit for organised savings. Even then, it is used by...

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Medical Devices

Morocco Medical Devices

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Espicom Industry View: The Moroccan market remains small, both in overall terms and also in per capita terms, le aving room for further development . With minimal medical device production, focused primarily on con sumables, Mo ro c co 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 US$235.8mn. Per capita spending at around US$7 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 US$331.4mn.

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Mining

Morocco Mining

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We expect to see strong growth in the mining sector of the Middle East and North Africa 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 negotiations to continue and for limited sanctions relief to be rolled over until 2015. This will benefit the mining sector as it is one of the beneficiaries of an easing of sanctions. On the upside, if negotiations are successful (which we currently give a likelihood of 25%), it will be a game changer for the country's beleaguered mining...

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Pharmaceuticals & Healthcare

Morocco Pharmaceuticals & Healthcare

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BMI View:   As Morocco ' s economic conditions improve towards the end of 2014 and the rate of decline in pharmaceutical sales slows, we hold an overall positive outlook for the market over the medium - to - long term, which will be driven by the growing middle class. However, the country ' s inefficient regulatory environment ,   coupled   with a weak healthcare infrastructure and poor health insurance cover , will continue to create difficult operating conditions for drugmakers, impeding the market ' s...

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Telecommunications

Morocco Telecommunications

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BMI View : The strong demand for mobile data services in the North Africa n telecoms markets is driving investments in network upgrade and expansion, with operators in Algeria, albeit from a low base, and Morocco leading the way in capital expenditure ( capex ) spending in 2014. The uptake of 3G network services in this region, aided by the increasing availability of low-cost smartphones, will allow mobile operators diversify their revenue streams away from basic services amid increased regulatory and competitive pressure. Libya is still left out of this development trend, with insecurity and political stability delaying a much - needed liberalisation process in the telecoms sector and...

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Tourism

Morocco Tourism

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Executive Summary

The Morocco Tourism Report examines the long-term potential offered by the country but cautions that the economic crisis in the eurozone will continue to weigh on short-term inbound tourism demand. This means overall tourist arrivals and receipt growth rates could well slow over 2013.

The report also analyses the growth and risk management strategies being employed by some of the leading players in the local tourism sector (ie: airlines and hotel chains) as they seek to maximise the long-term growth opportunities offered by the Moroccan market.

In 2011, Morocco welcomed 9,342,302 tourists, an increase of 0.6% compared to 2010, according to information from the Ministry of Tourism. This was a disappointing outcome and reflected several factors: first, the economic crisis in the eurozone weighed on outbound tourism demand from the key source markets of France and Spain; second,...

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