Policy towards private enterprise and competition
2018-19: Financial guarantee programmes funded by the World Bank and the central bank improve access to finance for small and medium-sized enterprises (SMEs), reducing barriers to market entry. Commercial code reforms reinforce deadlines for payments to businesses.
2020-22: Despite modest reforms, SMEs in key sectors, such as agro-industry and mining, struggle to compete with large, firms, particularly those that are connected to the business elite.
Policy towards foreign investment
2018-19: The government seeks to attract foreign direct investment (FDI) inflows through improvements to the operating environment and fiscal incentives, in order to overcome the dampening effect of regional political instability.
2020-22: Morocco seeks to establish itself as a gateway for foreign investors looking to tap Sub-Saharan African markets.
Foreign trade and exchange controls
2018-19: Negotiations to deepen trade ties with the EU are delayed by a series of diplomatic disputes. Morocco seeks to develop trade ties in Africa and the Middle East. The central bank gradually eases exchange-rate controls.
2020-22: Easing diplomatic tensions help to lower the cost of trade with Europe, but further integration remains far off. Additional measures are taken to make the exchange rate more flexible, but the authorities stop short of full liberalisation.
2018-19: Despite a streamlining of the value-added tax (VAT) regime, the tax system remains complex. The state continues to create free-zone areas offering tax incentives for key sectors. Electronic filing mechanisms help to simplify tax payments.
2020-22: The state considers bolder corporate tax cuts, but is constrained by low collection rates and high fiscal spending.
2018-19: Financing is available for blue-chip firms, but less so for SMEs (despite incentives meant to boost bank lending), in part given the lack of information on borrowers and banks' growing risk-aversion. Islamic finance products are launched.
2020-22: Alternative sources of finance, such as venture-capital funds and capital markets, emerge but remain reluctant to lend to SMEs. Legislation for a new derivatives market on the stock exchange comes into force, but trading remains sluggish.
The labour market
2018-19: Inflexible working practices, skills shortages and low productivity are problems for employers, and unemployment is high. Concern over social unrest prompts government concessions to trade unions, but these fall short of union demands.
2020-22: Reform of the labour market progresses, but efforts to fill the skills gap fail to keep pace with demand. The regime lacks the commitment to deal with a weak education system, and literacy rates remain low by global standards.
2018-19: Infrastructure continues to improve. More roads are built. Import-export costs decline as Tanger-Med port develops. New regulation for infrastructure sharing puts downward pressure on telecommunications prices.
2020-22: After some delays, work is completed on several major infrastructure projects, including roads, ports and a high-speed train line. Energy generation capacity increases, including from natural gas and renewable sources.
2018-19: Morocco's weak technology infrastructure precludes major advances, despite progress on the regulatory environment.
2020-22: The government tries to develop a more coherent technology policy and invest in infrastructure development in rural areas to advance economic diversification.