Morocco's country risk rating is most favourable in North Africa
Source: Middle East Insurance Review | Mar 2019
French global credit insurer Coface has given Morocco the highest country risk rating in North Africa of A4. This is higher than the ‘C’ given to Algeria and Tunisia and the ‘B’ awarded to Egypt.
Morocco’s strengths include: a favourable geographical position, proximity to the European market; strategy to move to high-end market and diversify industrial production; political stability and commitment to reform; and growing integration in African market, Coface said in its report ‘Country Risk Assessment Map- January 2019’.
Conversely, Morocco’s weaknesses include: an economy highly dependent on the performance of the agricultural sector; significant social and regional disparities; the poverty rate remains high although decreasing; weak productivity and low competitiveness; high unemployment and low female participation in the labour market; and political tension with regional neighbours, said Coface.
Despite the decline in agricultural GDP, Moroccan growth firmed in 2018 on the back of a favourable external environment, the global credit insurer said in the report. The non-agricultural sector grew at a lively pace, supported by the solid performance of the manufacturing sector and continued momentum in domestic demand. While the automotive sector continues to benefit from increased registrations in Europe, the construction sector is marking time.
Growth prospect in 2019
In 2019, growth is expected to increase slightly, thanks to a rise in agricultural GDP. Indeed, heavy rainfall suggests a promising 2018-2019 agricultural season. Value-added growth in the secondary and tertiary sectors should continue to drive activity, supported by robust domestic demand and resilient exports despite muted European growth. Meanwhile, favourable domestic prospects and tax incentives are expected to boost private investment and offset the decline in public investment in 2019. Inflation is set to remain moderate, but rising energy prices are likely to affect both household purchasing power and business competitiveness.
Morocco’s GDP growth rate is forecast at 3.3% for 2019, compared to an estimated 3.1% for 2018 and actual growth of 4.3% in 2017. M