Rabat – Morocco’s external debt increased from $55.058 billion in 2019 to $65.683 billion in 2020, marking a 19% year-to-year increase, according to World Bank data.
Driven by sovereign Eurobond issues, Morocco’s external debt in 2020 reached an all-time high level of 53.5% of Gross Domestic Production (GDP).
Despite rising external debt, Morocco’s debt obligations remain manageable due to a robust Foreign Direct Investment (FDI) inflow. The country’s FDI inflows increased by 9% in 2020, reaching $1.5 billion.
Morocco’s stable FDI inflow coupled with the established presence of multinational companies in the automotive, textile, and aerospace industries mitigated the economic fallout of COVID-19, according to the World Bank report.
Remittances from overseas Moroccans and FDI are keeping the North African country’s reserves of foreign currency at an adequate level.
Morocco’s external debt is primarily caused by its major infrastructure projects aimed at attracting foreign investments. Reflecting a positive effect of infrastructure investments, the Moroccan industrial sector is the largest receiver of FDIs by sector, with a lion’s share of MAD 9.116 billion ($981 million), according to statista, a data platform.
Ranked by Forbes as the fifth strongest economy on the African continent in 2021, Morocco is actively expanding its trade network by cultivating strong commercial and diplomatic ties.
Morocco’s Ministry of Trade and Industry, Ryad Mezzour, announced in early January that car manufacturers in Morocco can now export to Egypt without tariff restrictions.
The announcement came days after the Brazilian ministry revealed trade figures showing that Morocco is Brazil’s second-largest Arab trading partner, behind Saudi Arabia.
As it continued to diversify its trade partners, Morocco exported close to $2 billion in goods to South America’s largest economy in the past year alone. Still, Europe remains Morocco’s largest trading partner with over 50% of Morocco’s exports going to the European market.
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