Rabat – The Middle East and North Africa (MENA) region, especially Morocco, fared well compared to other regions in terms of providing support for companies during the peak of the COVID-19 economic crisis, according to the World Bank’s latest report.
Titled “Distributional Impacts of COVID-19 in the Middle East and North Africa region,” the report specifies that Morocco was the largest provider of COVID-19 financial support in the form of wage subsidiaries during the first worldwide peak of the pandemic. In total, 25% of Moroccan firms received COVID wage subsidies in those peak months, according to the report.
Morocco also extended COVID-19 relief funds of cash transfers to 12% of firms, the highest figure provided by a MENA country. The second-largest MENA region provider of cash transfers is Tunisia, trailing behind at 2%.
In addition to cash transfer and wage subsidiaries, Morocco topped the list of MENA countries that have reduced or tax-exempted firms at the height of the COVID-19 economic crisis. 16% of Moroccan firms benefited from tax reduction of exceptions, according to the World Bank’s latest report.
Trailing behind Morocco is Jordan, where 4% of firms benefit from tax reduction or exceptions.
Providing an overview of the impact of COVID-19 on the socio-economic landscape of the MENA region, the report shows wide regional discrepancies when compared to the rest of the world.
Despite performing well in providing COVID-19 relief funds, the MENA region holds the record for the highest youth unemployment rates worldwide at 27.7% in 2019.
The region also holds the lowest record worldwide for female labor force participation, with a staggeringly low percentage of 17.8% recorded in the same period.
The informal sector is also featured on the list of challenges facing the MENA region, and Morocco is no exception. The North African kingdom has the largest informal economy in the MENA region at 78%.
With the informal sector increasingly attracting the attention of reports and studies on the Moroccan economy, Morocco’s Central Bank Governor revealed in 2021 that the sector now accounts for an estimated 30% of Morocco’s GDP.
Despite Morocco’s best efforts to stimulate development through a pro-market reform strategy, the informal economy remains a threat to the country’s inclusive development vision.
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