SMALL BUSINESS SUPPORT IN MOROCCO

SMALL BUSINESS SUPPORT IN MOROCCO

SBS started operating in this prospective recipient country in 2012 with funding from the European Union through the Neighbourhood Investment Facility.

Country Strategy

SMEs form the backbone of Morocco’s economy. They account for more than 95 per cent of all enterprises and 48 per cent of total employment.

The business environment has improved over the past five years due to continuous reforms, but regional discrepancies remain pronounced, especially outside the golden triangle of Casablanca, Rabat and Marrakech.

MSMEs are predominantly family-owned and small in size. Access to finance is a major challenge due to the lack of dedicated MSME products on the banking side and financial illiteracy on the MSME side. The MSME market is characterised by a large informal sector creating unfair competition, lower productivity and limited access to finance and export.

MSMEs also face internal challenges that constrain growth, such as excessive centralisation of management and lack of corporate governance – common issues in family-owned businesses. Underdeveloped value chain is more pronounced in agribusiness and is a major concern for export-oriented MSMEs.

SBS operations in Morocco started with activities to raise awareness of the benefits of accessing well-designed advisory services. The SBS team has identified priority sectors such as agribusiness, textile and apparel, ICT, engineering and electrical.

Operations began in the Great Casablanca area and will extend to less-developed areas. Low female employment and high youth unemployment, particularly in rural areas of Morocco, can hinder economic growth. Therefore the SBS programmes are designed to help address these and other cross-cutting issues – such as energy and water efficiency – once a good operational level is reached.

SBS operations in Morocco focus on:

increasing efficiency and productivity of enterprises
improving management practices
promoting corporate governance and transparency
improving the quality of advisory services
developing the consultancy market, especially in the rural regions
strengthening the existing infrastructure and contributing to the institutionalisation of the business advisory market
promoting energy efficiency
supporting larger agribusiness companies under the joint EGP-Agribusiness direct industry assistance programme
contributing to policy dialogue between the EBRD and local stakeholders.


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Assessment of the National Business Environment

 Assessment of the National Business Environment
Political, Macroeconomic, Legal and Social Context
The current monarch, King Mohamed VI, has expedited the political reform process since coming to
power in 1999.  The Economist Intelligence Unit predicts that the political outlook will remain generally stable, 
although notes possible government challenges due to a ?relatively weak parliament,? and as well risks of
attacks by Islamic militants, which could disrupt the political process.  This is particularly relevant as the main
moderate Islamist party, which won the second-largest number of seats in the most recent parliamentary
elections, was excluded from the cabinet (EIU Morocco Country Report, 2008).  Given this context, the King
has been careful to make sure social spending a priority in order to minimize social unrest.  
With regards to foreign relations, Morocco has ongoing tensions with neighboring Algeria over the
future of Western Sahara, although a plan for more autonomy for the region is currently being discussed.  The
other foreign policy priority has been improving trade relations with the EU and the US, given the recent
signing of several free trade agreements, including the Euro-Mediterranean Free Trade Area with the EU, the
Agadir Agreement signed with Egypt, Jordan and Tunisia, and the US-Moroccan Free Trade Agreement.
Macroeconomic stability has been increasing, with decreasing levels of inflation, and decreased
government budget deficits which have led to declining public debt in proportion to GDP (see exhibit below).



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Analysis of the Moroccan Tourism

Analysis of the Moroccan Tourism
Cluster

 

Tourism has long been an important sector for Morocco.  As early as the beginning of the 20th
 century,
Morocco was positioned as a tourism destination for the people of France.  Today, the sector has been identified
by the Moroccan government as one of five priority sectors for the country to develop. Indeed, Morocco has
several natural advantages that position it well to compete in tourism. These advantages include a highly diverse
landscape including extensive mountain ranges, forests, and coastline extremely pleasant climate, and
widespread knowledge of French among the population, making Morocco a natural vacation destination for the residents of France.  
Morocco‘s tourism sector has exhibited strong growth since the government of the new king
Mohammed VI reiterated its status as a strategic sector for the economy in the early 2000s. Indeed, between
2002 and 2007, the number of total tourist nights in Morocco grew at a rate of 6.0% compared to the world
average growth rate of 1.6%1

.  However, the sector still faces important challenges in its quest for future
growth, which are evidenced by the fact that Egypt‘s total tourist nights grew by 20.6% over the same period,
nearly 3.5 times faster than Morocco‘s.
In this paper, we seek to diagnose the performance of the Moroccan tourism sector and put forth a series
of recommendations aimed towards improving the competitiveness of the sector.  In particular, this paper is
divided into the following five sections.  (1) a review of the overall economic performance of Morocco, (2) an
assessment of the overall business policy and environment within Morocco (3) an in-depth analysis of the
tourism cluster and (4) an analysis of the strategic issues facing Morocco‘s tourism cluster and policy
recommendations.
                                               

 Euromonitor International, ?Travel and Tourism - Morocco.?  January 2008.    
 Morocco’s Overall Economic Performance
Background
The Kingdom of Morocco is a nation of 37.8 million people located in the extreme north-west corner of
the African continent. Occupied by the Spanish and French from 1860 and 1912 respectively, the country
gained independence in 1956. A constitutional monarchy, Morocco is governed by King Muhammad VI since
he assumed the throne from his father in 1999. While Morocco has an elected bicameral parliament, significant
power is concentrated in the hands of the King and the Royal Court.


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