Doha – According to a new report by the World Bank and the Moroccan Observatory of Very Small, Small, and Medium Enterprises (Observatoire Marocain de la TPME), the business survival rate in Morocco is estimated at 53% after five years.
The majority of formal enterprises in the country are small in size and experience slow growth, notes the report.
Released on Tuesday and titled “Unleashing the Potential of the Moroccan Private Sector: An Analysis of Business Dynamics and Productivity,” the report reveals that businesses with 10 employees or fewer account for approximately 86% of employment in Morocco.
This is a stark contrast to the average of 35% in countries belonging to the Organisation for Economic Co-operation and Development (OECD).
In addition, the average size of active businesses in Morocco remains small, even as they mature.
Companies operating for less than 10 years have an average size of fewer than 10 employees, while mature businesses with more than a decade of activity have an average size of only 26 employees.
This news comes amidst rising unemployment in Morocco, which reached 13.7% in the first quarter of 2024, an increase of 0.8% compared to the same period in 2023.
The agricultural sector has been particularly affected, with the loss of 206,000 jobs due to drought conditions.
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Abdellatif Jouahri, governor of the Moroccan central bank, Bank Al Maghrib (BAM), warned of the increasing youth unemployment rate (ages 15-24) on September 24, which rose from 46.1% to 48.8% between the second quarter of 2023 and 2024.
In an effort to support business growth and startups, the Moroccan government has launched several initiatives in recent years.
Last week, the Ministry of Digital Transition and Administrative Reform, in collaboration with the Deposit and Management Fund (CDG) and TAMWILCOM, signed a partnership agreement to bolster startup growth as part of the “Digital Morocco 2030” roadmap.
This initiative aims to provide structured, long-term support for startups at every stage of development, offering mentoring and connections with investors.
However, some critics argue that the Digital 2030 strategy lacks the necessary ambition and reveals a worrying dependence on foreign capital and technology.
The strategy envisions supporting a total of 3,000 startups by 2030, which some believe is inadequate considering the high failure rate of startups globally.
Additionally, concerns have been raised about the strategy’s reliance on international venture capitalists, exposing Moroccan startups to the volatility of the international economy.
