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Kasi Insight - Challenges of Doing Business in Morocco

Updated: Sep 14

Moroccan Marketplace

Business in Morocco is on the rise, meeting and exceeding some metrics of Egyptian and South African markets, the other two fastest growing countries enticing global business. Diaspora 2023 declares, “Increased foreign direct investment is just one indicator of how much Morocco’s economic climate has improved in recent years. Many international companies now use Morocco as a springboard for investing in other African markets, particularly in West and Central Africa.”

At present, some of the most favorable industries for starting a business in Morocco are the energy, infrastructure, and automotive sectors. Due to the increasing demand for energy, there is pressure to generate energy from local sources instead of relying on expensive imports. “Here, too, Morocco is playing a pioneering role in Africa” (Diaspora 2023) Thus, experienced engineers with strong technical knowledge and a sound business idea also have a good chance of establishing a successful business in these and other similar sectors. Morocco is experiencing a boom in workforce skill and talent, with Moroccans who have lived and worked abroad returning to found their own businesses and work in skilled jobs in these sectors. Additionally, this same global emigration to and from Morocco results in about one in ten Moroccans living outside of Morocco, so is a large market for Moroccan products from expats and global consumers alike (Disapora 2023).

Also seeing high potential in Morocco is the ICLG, “a leading global platform for legal reference, analysis and news… [that] also forms an international network of legal experts who, by contributing their expertise, reach a wide readership of legal and business professionals around the world.” They state one of the key reasons Morocco is primed for success is because the middle class is growing, which means they are going to have more disposable income and spend more in the fast-moving consumer goods market (FMCG). Additionally, Morocco has seen progress in economic and infrastructure development, emigrants returning home, and a rise in its urban populations. The UK Big Four professional services firm KPMG reported “Given Africa’s large market and the potential for rising household income, the FMCG sector on the continent stands to benefit immensely.” “Morocco is an exciting and potentially lucrative investment destination for retail companies” since the “consumption landscape is in the process of changing from one in which informal trading (markets and corner shops) dominates, to one in which chains of supermarkets and hypermarkets account for a significant portion of consumption and this presents significant opportunities for investment.”

The ICAEW (Institute of Chartered Accountants in England and Wales) summarizes annual data collated by the World Bank to assess various factors of doing business in certain countries. Their assessment, including information from the Doing Business in Morocco 2020 Economy Profile claims “The country has become a major FDI hub attracting vast flows of funds from Europe, particularly France. Government has taken a very sector focused approach, and is encouraging the growth of a strong auto sector as a prominent example,” touting it as being in stride with Egypt in winning as the two major foreign investment destinations for 2022 and the future. They conclude “Morocco has become increasingly active, and continues to encourage investment, particularly from French auto-makers. The country is making use of its geographic proximity to Europe, and its relatively lower paid working force to build its capacity in this space” (Source).

In addition to seeing European countries as key business partners, “Moroccan businesses have historically strong ties to firms in France, Spain, and other European countries, but increasingly pursue a wider range of international partners, creating opportunities for U.S. firms. The Government of Morocco (GOM) has recognized the increasing importance of English language training, and a growing number of Moroccan businesses and government interlocutors speak English, in addition to French and Arabic” (Source). Approximately 150 American companies, ranging from multinational corporations to small to medium-sized enterprises, are operating in Morocco. Some of these companies, such as those in the consumer goods and pharmaceutical industries, manufacture some products locally while importing others for distribution. U.S. investment in the aerospace sector has been focused in the Casablanca Midparc and Aeropole trade zones. Agro-industrial companies have also made substantial investments in Morocco.

While the outlook remains positive for business in Morocco on a large scale, there are certainly aspects to the current business infrastructure that can be burdensome and timely. Taking your business to Morocco may help you win big in the long run, but in the meantime it can cost you some time and patience up front. Thompson Reuters Practical Law concludes, “While Morocco has made, over the past few years, notable progress in the World Bank's Doing Business index (ranking 53rd among 190 economies in 2020, compared to 130th in 2009), procedures and conditions for projects launching and completing remain sometimes complex and burdensome, given the multitude of non-codified texts, the sometimes variable application of law from one region to another, and the significant role of local customs and practices.”

Thus, those considering taking their business to the Moroccan market should consider partnering with or consulting with an agency that knows the ins and outs of the current Moroccan economic atmosphere. Our data intelligence platform can help you track these trends in consumer behaviors in Africa over time. This provides you with valuable insights that can help you or your business make fast data-driven decisions. It is certainly a place primed for opportunity, but knowing exactly when to take on that opportunity may make all of the difference.

Contact our team today to explore how our economic intelligence can empower your decision-making process. Win with confidence with Kasi insights

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