World Bank: Shadow Economy Employs 77% of Morocco’s Labor Market

A new World Bank report on the labor markets of Middle Eastern and North African (MENA) countries has established that over 70% of Morocco’s labor market operates in the informal economy, the highest in the region.

Rabat – A new World Bank report on the labor markets of Middle Eastern and North African (MENA) countries has established that over 70% of Morocco’s labor market operates in the informal economy, the highest in the region.

Informal labor indicates an employment status where workers have no access to healthcare, retirement, or insurance covering risks associated with the job.

While the MENA region boasts one of the youngest populations globally, youth unemployment remains rampant as one in every three young people in the region is not engaged in a job, education, or training, according to the World Bank report.

Regarding women’s participation in the labor force, the MENA is at the bottom with female labor participation standing at 20%, the report indicates.

The region seems to be also lagging behind in terms of the number of women-led firms. While more than 20% of firms are led by women in lower and upper-middle-income countries, the best-performing MENA country – Tunisia – does not exceed the 15% threshold.

The percentage of women-led businesses in Morocco is a little more than 5% of all companies, data suggests.

In addition to these challenges, the region does not seem to have a business-enabling environment, as firms that are less than five years old constitute less than 10% of all businesses in the region, the report says.

The figure is a far cry from the 15% in lower and upper-middle-income countries. Young firms’ share in Morocco’s business landscape stands at 8% of all businesses, the report indicates.

Despite research and innovation being necessary for growth, businesses in the MENA region are less likely to invest in Research and Development (R&D) ventures, according to the report. Only around 7% of MENA businesses invest in R&D, it details.

Tunisia is the only MENA country that stands out in this regard, with over 18% of Tunisian businesses heavily investing in R&D research. Morocco comes in second with a little more than 14%.