Doha – Business insolvencies in Morocco are expected to increase over the 2024-2025 period, according to a recent global report from Allianz Trade.
Titled “Global Insolvency Outlook: The ebb and flow of the insolvency wave,” the document places Morocco among the countries experiencing a “noticeable increase” in situations where companies are unable to meet their financial obligations, leading to business closures or debt restructuring.
The report forecasts that business insolvencies in Morocco will rise by 13% in 2024 and 8% in 2025. It highlights a significant increase in insolvencies, from 12,397 cases in 2022 to 14,245 in 2023. This figure is expected to reach 16,100 in 2024 and 17,400 in both 2025 and 2026.
The rise in insolvencies in Morocco is part of a global trend affecting the region and the worldwide business environment. This increase is largely due to a backlog of insolvencies that were postponed during the 2020 health crisis.
Morocco’s insolvency figures are particularly concerning when compared to pre-pandemic levels. The report states that insolvencies in 2024 will be 101% higher than the 2016-2019 average, indicating a substantial deterioration in the business landscape.
The Allianz Trade report also provides insights into the sectors most affected by insolvencies in Morocco. Construction, trade, and hospitality are among the hardest-hit industries, with a significant number of companies struggling to survive.
The report notes that despite the expected increase in insolvencies, Morocco is still awaiting a decrease in the number of business failures. Allianz Trade analysts believe that at some point, there should be fewer “administrative” cases of insolvencies, which are those of inactive firms using the insolvency procedure as a new legal way of exiting the register.
However, the report suggests that domestic firms are likely to continue struggling with payment delay issues and additional fiscal pressure, preventing a downward trend in insolvencies before 2026.
The Allianz Trade report’s findings align with the challenges faced by businesses in Morocco, where the survival rate is estimated at 53% after five years, according to a separate study by the World Bank and the Moroccan Observatory of Very Small, Small, and Medium Enterprises.
Read also: More Than 12,000 Moroccan Businesses Failed in 2022
