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Morocco: Economic Developments 2013
Posted by African Economic Outlook
Written by: African Economic Outlook on July 8, 2013.
At 3.2% GDP growth was below the forecast 5.0% owing to sluggish world demand and a below-average performance in agriculture, but should pick up in 2013 to reach 4.6%, driven by a rise of 4.8% in non-agricultural GDP and a growth in agricultural added value of around 5.0%.
Growth in the agricultural sector was hit by inadequate rainfall in the 2011/12 season but prospects for 2013 are brighter because of better weather conditions and the entry into service of two agropôles focusing on agricultural production, agri-food (processing and distribution), technological innovation and scientific research in the Meknès and Oriental regions. The establishment of communal farmland managers (agrégateurs) in various sectors of the industry, as part of the Green Morocco Plan, should be a driving force. The process consists of a voluntary coming together of farmers around an operator responsible for optimising production and getting the best value from agricultural output as well as marketing it. Furthermore the agreement on liberalising trade in agricultural produce reached between Morocco and the European Union (EU) in 2012 should also have positive consequences for the country. It provides for a rise in export quotas, an increase in the number of products enjoying quota-free access and continuing protection of sensitive Moroccan sectors.
Exports and landings of fish rose but the sector continues to suffer from major problems along the value chain. The ambitious Plan Halieutis, launched in 2009, has brought some relief in three important aspects: i) progress in the sustainable management of fisheries resources; ii) the completion of a competitiveness centre at Agadir; and iii) the development of fish-farming. In this area the national aquaculture development agency (Agence nationale de développement de l’aquaculture) has formulated a number of initiatives covering regulation, legislation and coastal planning for aquaculture and training in the Nord region.
Non-agricultural activities partly compensated for the poor performance of the agricultural sector and grew by 4.5%, split between the secondary sector (3.7%) and the tertiary sector (4.6%). This trend should continue in 2013, with growth forecast at 4.1% and 4.6% respectively.
Extractive activities, 94.0% of which are accounted for by phosphates, represent 5.6% of the added value of the secondary sector, almost 3.5% of GDP and more than a quarter of exports. They grew by 4.0% in 2012, which should rise to 6.0% in 2013 thanks to vigorous international demand from Brazil and India and to strategic targets decided by the the national phosphates agency (Office chérifien des phosphates, OCO): to consolidate the country’s position as world market leader, diversify markets and reposition itself on markets with high potential, particularly in Africa.
Processing industries account for almost 15.0% of added value in the industrial sector and in 2012 benefited from the good performance of several activities aimed at export or the domestic market. The added value of processing industries rose by 2.3% and should grow by 2.8% in 2013.
Regarded as an engine of national industry the automotive sector benefited from the start of production at the Renault car plant in Tangier in February 2012. This project has already increased the sector’s exports by more than 20% compared with 2011.
The aeronautics sector has also recorded sustained growth since the implementation of the PNEI in 2009. This includes the aéropôle at Nouceur and the MidParc integrated industrial platform (Plateforme industrielle intégrée MidParc), which is dedicated to aeronautics, the space industry and electronics. An institute for aeronautical professions (Institut des métiers de l’aéronautique) also came into service in 2011 with the aim of eventually training 800 professionals a year. Growth in the sector was reinforced by the installation of operators such as EADS, Boeing, Safran and Bombardier. Bombardier has announced plans to invest USD 200 million with activities due to begin in 2013. As a result of the measures put in place since 2008 and the investments made, export turnover in the sector has risen by an average 18.3% a year.
Electronics industries have benefited from a number of developments in the PNEI, but have made only modest progress. The gloomy world economic context saw a 14.4% drop in the value of electronic component exports. Nevertheless the sector should benefit in the medium term from Alstom’s plans to build an industrial unit for the manufacture of cables and components for the railway industry. The plan should eventually generate almost EUR 310 million in export earnings and create 5 000 jobs over 10 years.
Another key sector of the national economy is agribusiness which accounts for almost a quarter of exports, 8% of GDP and 19% of industrial employment. But it suffers from a number of handicaps, particularly inadequate levels of investment, poor competitiveness arising from weaknesses in research and innovation, and an irregular and low-quality supply of raw materials to processing plants. It also suffers from a high concentration of exports to the EU and a specialisation in products with low added value. In the first 10 months of 2012 only exports of canned and fresh fish recorded double-digit increases, while all other products showed falls.
The construction sector maintained its strong performance with a growth rate of 5.2%. The renewal of activities linked to social housing, which accounts for 60.0% of building, means that the upward trend should continue with a growth rate of 5.5% expected in 2013.
The tertiary sector accounts for more than 50% of total added value. It was buoyed by the good performance of primary and secondary activities and by vigorous trade, transport and telecommunications activity. Growth in 2012 was 4.6% and should be maintained at that level in 2013. Tourism should increase by 4% in 2013, after a lower rise of 2% in 2012, benefiting from the relative instability in Tunisia and Egypt. Trade should benefit from the completion of the 2008-12 Plan Rawaj for the modernisation of internal commerce. Postal and telecommunications services should maintain their growth thanks to the 2013 digital Morocco programme (Maroc Numérique 2013) for public access to broadband Internet, computerisation of SMEs and development of online government services.
Growth continued to be driven by domestic demand: household consumption rose by 3.2% in 2012 and should rise to 4.2% in 2013, thanks to measures to support the middle classes and to extend social protection such as health coverage and pensions, and to the support fund for social cohesion (Fonds d’appui à la cohésion sociale) to help the most disadvantaged. After increasing by 5.5% in 2012 investment should continue to rise by 5.9% in 2013, driven by accelerating public investment and the creation of an investment monitoring committee (Commission de suivi des investissements) seeking to identify barriers to their implementation.
Excerpt from African Economic Outlook 2013: Morocco
