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Join on Telegram Rabat – The World Bank said Morocco boasts resources that position the country as a regional trade and financial hub for the African continent.
The bank also described the North African country as a preferred destination or location for global events, describing this as a “pivotal opportunity to accelerate capital market development.”
The country’s regional and global position also plays a role in driving infrastructure and foreign investment while stimulating tourism and job creation.
Despite the momentum, the bank acknowledged that challenges persist in “scaling up the capital market” for finance priority sectors. This comes as corporations still rely on financing, the bank said.
Small and medium-sized enterprises (SMEs) also face challenges, such as securing access to financing due to “structural weaknesses,” lack of financial transparency, and a hard time accepting equity investment.
“These challenges are compounded by an economic structure with relatively few firms of sufficient scale and growth potential to attract investment,” the World Bank added.
The global bank emphasized that these hurdles require the strengthening of financial literacy, governance, as well as investment readiness programs to increase SME participation in capital markets.
The bank also recommended the development of a “robust pipeline of bankable investment projects,” which it described as “slow” in the North African country.
Institutional investors in Morocco additionally face obstacles, which the World Bank said could be fixed by diversifying the base.
“Institutional investors face limited supply and low returns on traditional assets, even as Morocco requires long-term investments in infrastructure, housing, and for productive enterprises,” the World Bank said.
For this challenge, the bank stated that expansion of issuances through a broader range of instruments is “critical to channel institutional savings into productive sectors.”
The bank also recommended the creation of a local credit rating agency, as their absence limits market transparency.
