Despite Morocco’s efforts, the unemployment rate has remained stagnant—even in a flourishing economy.
Casablanca – Last month, Morocco’s High Commission for Planning (HCP) released the unemployment figures for the first quarter of 2019. They told a familiar story: Continued stagnation.
Morocco’s overall unemployment rate rose from 9.8% in the last quarter of 2019 to 10% in the first fiscal quarter, where it has hovered for the past few years. This is despite the fact that Morocco has received millions in loans to address the problem. Since 2014, the rate has hardly changed, averaging a little under 10% for the five-year period and only once dipping under 9%, in the second quarter of 2015.
Yet over the past decade, Morocco has seen some of the strongest economic growth in the MENA region. In April, the International Monetary Fund (IMF) predicted that Morocco’s growth rate would reach 4.5% by 2020—the only country in the region expected to see constantly accelerating growth for that period. The kingdom surpassed South Africa last year to become Africa’s leading automotive producer.
That makes Morocco’s unemployment problem peculiar. Despite a growing economy, unemployment rates are unchanged. How is that possible? Dissecting this paradox reveals the complexities and uncertainties of Morocco’s job market, says economists.
Morocco’s unemployment rate since 2014. Data visualization source: TradingEconomics.com. Data matches HCP official records since 2014.
Certainly, Morocco boasts some of the lowest unemployment rates among Maghreb – North Africa – region. Unemployment in Tunisia stood at 15.3% in the first quarter of 2019, according to its statistics agency, while Algeria’s most recent figures reported 11.7% unemployment in mid-2018.
And the HCP’s first-quarter figures didn’t only bear bad news, Youth unemployment in Morocco reached its lowest level in two years, down to 24.1% from 26% at the end of last year. Unemployment among urban youth also fell this year for the first time since 2016, reaching 40.3%.
These decreases are welcome news for Morocco. Reducing youth unemployment has been a particular economic priority for the government. King Mohammed VI ordered the creation of a government committee to address the issue last year.
But Morocco’s youth unemployment rate is still high, particularly among young people with degrees. Many educated young people leave Morocco in search of work, including more than 600 engineers annually, Minister of Education Said Amzazi said in 2018.
So despite the slight reductions in youth unemployment, it’s clear that Morocco’s unemployment tells a more complicated story.
Automation instead of jobs
At a Citibank media roundtable in April, Citibank’s senior economist for Africa, David Cowan, told that story. Automation, he said, explains how Morocco’s growth is accelerating with little impact on the job market. This is particularly evident in Morocco’s flourishing automotive and aerospace industries.
“You have a car industry that imports its components. Then robots put it together, spray the cars with paint, and you export it. It adds value, but it doesn’t fundamentally change the unemployment rates,” he told Morocco World News (MWN).
Though things might be changing, Cowan noted. “That is why the new investment in the automotive components sector that is happening now is so important,” he added. “This has the potential to create more jobs going forward.”
Indeed, Morocco’s automotive sector has lately recorded strong job creation, according to the Ministry of Trade and Industry, part of the government’s plan to fight unemployment.
“The strong positioning of the industrial sector as a lever for job creation and the professional integration of young people is now strongly supported by the deployment of vocational training, driven by King Mohammed VI,” the ministry said in April.
Dependence on agriculture
Morocco will need more jobs from industry in order to see net job creation. According to the HCP figures, only 4,000 jobs were created by the industry sector in 2019’s first quarter, compared to the 114,000 jobs in the service sector. Meanwhile, 152,000 people lost their jobs in agriculture and fisheries.
That’s Morocco’s other major problem, Cowan said. Morocco’s economy depends on its agricultural sector, which employs over 40% of the workforce. When rainfall is low, job losses spike—leading to decreases like those seen last quarter.
A restrictive bureaucracy also poses challenges for job creation in the kingdom.
“If you talk to any employer in Morocco they’ll tell you that employing additional staff involves meeting a lot of additional requirements, or there are a lot of rules and regulations around it,” he said.
“In that environment, it is often easier not to employ a new worker but to get existing workers to work overtime.”
A path forward
Easing regulation could be an important solution to job growth going forward, he said, as Morocco looks away from agriculture and towards industry for jobs.
But radical change might be unlikely. Cowan said Morocco often tends towards risk-averse fiscal policy—unsurprising, given the history of political turmoil in the region.
“Even though the Arab Spring was nine years ago now, it’s still washing up on our doorstep. The political reverberations of it have not gone away,” he said. “And so it’s going to be a very interesting few years in Morocco on the economic policy front as the government seeks to maintain fiscal discipline, but wants to see growth pick up and unemployment fall.”
Whether or not Morocco will achieve this remains to be seen. For now, its unemployment numbers remain a glaring point of focus—for both the government and its citizens.