Morocco

Situated at the north-western corner of Africa, Morocco is included in multiple overlapping geographical areas: Africa, the Greater Arab Maghreb and the Middle East and North Africa (MENA) region. Morocco has a land mass of 446,550km² and a total coastline of 1,835km and is bordered by Algeria to the east, Mauritania to the south, and the Strait of Gibraltar to the North, separating it from Spain by less than 15km. It has two seafronts – the Atlantic Ocean to the west and the Mediterranean Sea to the north. This places Morocco strategically between Africa and Europe.\r\n\r\nMorocco is a constitutional monarchy with an elected parliament. It has a population of 37 million people and a GDP of US$147bn and its currency is the Moroccan dirham. Prior to the Covid Pandemic GDP growth was running at 7.9% which slowed to 1.3% in 2022 and increased to 3.02% in 2023 and is expected to rise to 3.5% in 2024 and 3.8% in 2025 due to the revival of agricultural activities and services and moderate recovery in domestic demand. Inflation fell to 6.1% in 2023, after peaking at 6.6% in 2022, as imported inflationary pressures eased. The budget deficit improved from 5.2% of GDP in 2022 to 4.7% in 2023, due to the combined effect of strong budget revenue and lower subsidies. Inflation is projected to fall slightly to 4.1% in 2024 and 3.8% in 2025, as world food prices decline.\r\nThe country has sustained a stable currency, reinforced its external liquidity buffers, maintained good access to international financial markets, and continued to attract large volumes of foreign direct investment (FDI). It has also had remarkable success in tradeable sectors, including the rapid growth of its automotive industry, the consolidation of the Tangier port as a leading logistical hub, and the transformation of the phosphate sector into a significant provider of fertilizers for Africa.\r\nStandard corporate tax rates in Morocco are progressive, from 10% on income under MAD300,000 (US$34,035) to 31% on income of over MAD1m (US$113,450), and the standard VAT rate is 20%.\r\n\r\nA recovery plan was defined by the government in its 2021-2023 plan which revolves around the modernisation and digitalisation of commerce. Projects include establishing an incubator supporting digital startups with products and solutions for merchants, digitalising local commerce and generalising mobile payment. The minister of industry said the plan also includes boosting small and medium industrial companies and substitution of imports by local production, with support valued at MAD34bn (US$3.86m).\r\n\r\nThere are a number of specific financial, tax and customs exemptions and agreements to encourage investment. Declining foreign direct investment in 2018 prompted the government to introduce a five-year corporate tax holiday for new industrial companies and it also signed agreements with several countries to avoid double payment of income tax.\r\n\r\nElectricity costs are generally regarded as expensive in Morocco as the country imports 97% of its energy resources.

Sources: Who Owns Whom sector reports, CIA Factbook, African Development Bank, World Bank, Trading Economics, African Statistical Yearbook and IMF.