Rabat – A new World Bank report has drawn attention to a concerning trend in the Middle East and North Africa (MENA): since 2000, per capita GDP growth in the region has lagged behind that of comparable economies.
The report attributes much of this stagnation to the underperformance of the private sector.
It explains that businesses in the region face significant challenges. The informal economy is dominant, productivity is low, and there is a limited ability to adapt to economic shocks. These issues create a barrier to sustained growth and economic resilience.
The World Bank report shows that sales growth per worker in MENA has dropped by an average of 8%, which is far below the growth seen in lower-middle-income countries (0.4%), upper-middle-income countries (0.4%), and high-income countries (2.4%). This gap highlights a missed opportunity for growth in the region.
Focusing on Morocco, the report points to the availability of detailed data, which has enabled a thorough analysis of the country’s productivity trends.
The findings show that even the most productive companies in Morocco struggle to expand their market share. But there are signs of improvement, particularly in the more efficient use of production factors, which has contributed to rising labor productivity.
Two key factors stand out in this World Bank report as major obstacles to productivity in the region: the ongoing division between the formal and informal sectors, and the exclusion of women from the workforce.
The informal sector accounts for between 10% and 30% of total production, and it absorbs 40% to 80% of employment. This imbalance notes the need for urgent attention.
A staggering 83% of businesses operate informally in Morocco, a figure significantly higher than in neighboring countries like Lebanon (40%) and Jordan (50%).
This situation invites further exploration into the factors that drive businesses to remain in the informal sector, despite the potential benefits of formalization.
