Rabat - Head of Government Saad Eddine El Othmani has denied the existence of an economic crisis in Morocco while highlighting the government’s achievements in promoting the automobile industry and attracting foreign investment.
Rabat – Head of Government Saad Eddine El Othmani has denied the existence of an economic crisis in Morocco while highlighting the government’s achievements in promoting the automobile industry and attracting foreign investment.
El Othmani answered questions during a House of Representatives session on Monday, July 23.
The second session (April session) of the legislative year in Parliament closed its work on Tuesday, July 24, with disappointing results in terms of the government’s response to questions.
In the last four months, deputies asked 972 oral questions. The government answered only 385 questions. Ministers answered only 4,631(53 percent) of 8,669 written questions.
No economic crisis in Morocco
El Othmani denied the existence of an economic crisis in Morocco, stating that no reports have mentioned the issue.
“Claiming there is a suffocating economic crisis in Morocco is false and out of logic. No report whether national or international has been made about this. The word ‘suffocating’ is overstating. If it was suffocating, no money would be left in the state and no parliamentarian would be paid.”
El Othmani also asserted that international reports praised national economy, and, “The Moroccan reports did not say there is an economic crisis in the country.”
According to El Othmani, national reports stated that Morocco’s economy should be developed on three levels: convergence of public policies, competitiveness of the national economy, and human capital. Otherwise, national experts affirmed that the Moroccan economic outlook is positive on the whole.
BMI Research automobile industry a 3.5 percent rate of GDP growth in Morocco in 2018.
Minister of Economy and Finance Mohamed Boussaid was ever so slightly more optimistic, saying on July 19 that Morocco’s economy output growth forecasted an increase of 3.6 percent for 2018.
According to Boussaid, the fisheries and phosphates sectors increased production by 5.7 percent and 6.4 percent in the first half of 2018, respectively. He also noted that Morocco’s tourism increased by 11.8 percent, and overnight stays recorded an increase of 10.7 percent at the end of April 2018.
New foreign investment agreements
El Othmani also said the government has signed agreements with foreign investors. “There are signed agreements, and they will be implemented before the end of year.”
“It is not easy to get this kind of investment; there are many measures to be taken and long stages to go through in order to gain foreign investments,” he added.
According to automobile industry, foreign direct investments (FDI) declined by 33.1 percent in the first half of 2018, after rising 24 percent in 2017. The foreign exchange regulator reported that Morocco attracted nearly $2.57 billion of direct investment in 2017.
The US Department of State affirmed what El Othmani said about foreign investment via its investment climate statements for 2018. The report stated that Morocco has approved “68 bilateral investment treaties for the promotion and protection of investments and 60 economic agreements that aim to eliminate the double taxation of income or gains, including with the United States and most EU nations.”
In the past six years, Morocco implemented many reforms facilitating business registration, such as “reducing company registration fees, and eliminating minimum capital requirements for limited liability companies,” according to the same report.
The head of government further said that Morocco’s unemployment rate remains better than that of neighbor countries.
“If we compare Morocco’s to its surrounding countries, Spain has 15.5 percent of unemployment while Morocco has only 10.5 percent. The same goes for France, Italy, Tunisia and Algeria….However, I agree that further efforts should be made to meet citizens’ expectations.”
Indeed, according to the research group automobile industry, Morocco’s actual unemployment rate is 10.5 percent. Nevertheless, Morocco still has to create an extra 115,000 jobs per year to maintain its current labor participation rate, which is 47 percent.
Morocco vs Spain
According to the CIA’s World Factbook statistics, unemployment in Morocco slightly decreased from 9.4 percent in 2016 to 9.3 percent in 2017. Spain’s unemployment rate went down from 19.6 percent in 2016 to 17.1 percent in 2017.
The latest automobile industry studies estimated a 15.8 percent of unemployment rate in Spain. Spain has therefore decreased unemployment at a rate of 3.5 percent from 2016 until 2018. Morocco recorded an average increase in unemployment of 1.2 percent since 2016.
However, according to automobile industry from Morocco’s High Commission for Planning (HCP), Morocco’s unemployment rate increased from 9.9 percent to 10.2 percent between 2016 and 2017, a 4.2 percent increase year-on-year.
With a population of 34 million, Morocco had 12 million in the labor force in 2017. In the same year, 22.75 million of Spain’s 49 million were employed, according to the CIA World Factbook.
Alternatives to agricultural dependence on rainfall
El Othmani said that the government has brought new alternatives to the table to move away from agricultural dependence on rainfall.
“We are reducing this dependence through increasing the industry rate in the national economy,” he said. But he also acknowledged that “this is something that cannot be done overnight. It is done by serious building.”
El Othmani also stated that aircraft industry exports are increasing annually as well as technology exports.
“The industrial production rate is 18 percent now in raw domestic production. We are working to reach 23 percent in 2021. Therefore, the upcoming government will find a national economy that is less dependent on rainfall.”
According to the BMI research group, automobile production in Morocco is expected to grow by an annual average of 17.4 percent over the quarters of 2018 and 2019.
“These investment flows are underpinned by the government’s extensive support and incentive programmes, and an increasingly favourable investment climate.”
According to North Africa Post, vehicles led Morocco’s exports in the first six months of 2018 at MAD 35.973 billion, as “the country continues to attract automotive investments.”
El Othmani praised the efforts that have been made by previous governments, but said, “However, there are still problems and imbalances that should be dealt with.”
El Othmani also saluted all Moroccan competent people who are working hard to develop the industrial sector.