New Study Detects ‘Economic Fragility’ in Morocco’s Companies

Rabat – A new research publication by Bank Al-Maghrib, Morocco’s central bank, detected economic fragility in 54% of Moroccan businesses.

The study, titled “Analysis of the fragility of the productive chain in Morocco,” was prepared by the late Sara Benazzi, Hicham Bennouna, an economics researcher with the International Monetary Fund, and Tomasz Chmielewski of the Polish Central Bank.

The vulnerability of firms remained stable in the period between 2006 and 2019, with only a small rise in the proportion of vulnerable businesses in 2014, due to the sluggish economy at the time.

The study asserts that the prospects of a business being vulnerable to this fragility are highly variable and change from one case to another, depending on various factors like size, age, and sector.

Newer and smaller businesses are more likely to suffer from vulnerability than older, bigger, and more established operations, the study also says.

These findings are consistent with other similar studies from similar economies.

The companies were analyzed using a method that examines “risky” loans received by the business, as well as the size and age of the projects in question.

More than 306,000 businesses were analyzed based on their balance sheets between 2006 and 2019, creating more than 1,2 million datasets for the researchers to analyze.

The study also stresses the importance of “economic fragility” as an economic indicator, which it says is a very complex thing to measure, with various variables influencing it for any given company.

The researchers invited others to study the topic further, notably by exploring other variables in an effort to include the measurement in plans and visions for improving the Moroccan economy in the future.