COUNTRY INFORMATION
Morocco is located in the continent of Africa and has borders with Algeria and Mauritania. This country cover 446,550 square kilometers of land and 250 square kilometers of water. It means that Morocco is a little bit larger than California. The Mediterranean coast is mountainous whereas the Atlantic coast has a fertile plain. Morocco has diverse landscapes, indeed, it has mountains, desert, beaches, forests, oases, valleys and plateaus.
During the summer, temperatures range from 35°C during the day but can drop quickly to 5°C at night in the desert. Winters along the coastline average between 12°C and 25°C, while the inlands, for example in the Northern Plateau region, have colder winters ranging from 5°C to -7°C. Rainfall is most likely to occur in April, May, October and November. The Atlantic coast is the wettest region of Morocco.
The official name of the country is the Kingdom of Morocco. The capital is Rabat. The biggest cities are Casablanca (3.3 million) and Rabat (1.6 million). The country has a population of 35 million of inhabitants and the Moroccan Dirham is the currency.
POLITICAL INFORMATION
Morocco is a Constitutional Monarchy Kingdom with an elected parliament.
The ruler is King: MOHAMMED VI (since July 1999). The Prime Minister is Saadeddine Othmani, from the justice and Development Party (since October 2016).
Morocco gained its independence from France on March 2, 1956. The constitution was established on March 10, 1972. It was revised on September 4, 1992 and amended in Septembre 1996. The Constitution that reforms the weakening of the King’s power was approved on July 1, 2011.
The executive power is shared between the government and the King. The Prime Minister is promoted to head of government and as such presides over the Governing Council but the Council of Ministers continues to be chaired by the King. The Government Council consists of all the ministers, deputy ministers and other Secretaries of State. It discusses public and sectoral policies, the commitment of the government's responsibility to the House of Representatives, current issues related to human rights and public order, bills, decrees, draft regulatory decrees and the appointment of secretaries and central directors of the public administration, university presidents, deans and directors of schools and higher institutes. The Governing Council only has deliberative power in terms of general policy of the State, international conventions, the finance bill. The Council of Ministers, where only the head of government and the ministers sit, is responsible for the strategic direction of the state policy, the revision of the Constitution, draft organic laws, general guidance of the finance bill, amnesty, draft texts related to the military, the declaration of a state of siege, the declaration of war.
Concerning the legislative power, there is the Parliament, that comprises the Chamber of Representatives (395 deputies elected by universal direct suffrage for 5 years) and the Chamber of Counselors (120 members elected by indirect universal suffrage for 6 years).
The Parliament votes the law; any bill must be successively examined by the 2 Houses. It moreover shares the initiative of the laws with the Prime Minister.
Political freedom : 5/7
Freedom of the press : world rank 133/180.
Since its independence, Morocco has set up different public policies to promote the economic growth. The country has also established a liberalization policy that has lead to an increase of the foreign direct investments and the degree of openness of the country.
ECONOMIC INFORMATION
The national currency is the Moroccan Dirham (MAD).
The exchange rate on November 10, 2018 was : $1 = 9.5307 MAD.
GDP per Capita : $3,368 (Source: IMF – World Economic Outlook Database, 2018)
Unemployment rate (% of the Labour force) : 9,5 (Source: IMF – World Economic Outlook Database, 2018)
Inflation rate : 1,6% (Source: IMF – World Economic Outlook Database, 2018)
Employment by sector (in % of total employment) : Agriculture 37,5 ; industry 19,6 ; Services 43. (Source : World Bank, latest available data).
Morocco is the only African country that entered into a bilateral Free Trade Agreement with the United-States.
In recent years, the Moroccan economy has been characterised by macro-economic stability and low levels of inflation. The Moroccan economy remains solid and mainly relies on exports, a boom in private investment and tourism. After being hit by a drought in 2016, which led to a slowdown in GDP growth, economic activity has picked up again in 2017 with growth projected at 4.4% according to IMF.
In 2017, Morocco continued to consolidate its public finances, following a similar trend in 2016. Impacted by the decrease in food and agricultural exports in 2016, the current account deficit narrowed and international reserves remain at a comfortable level (covering nearly six months of imports, IMF estimates). The deficit is expected to reduce in the upcoming years depending on the extent of increase in oil prices which comprise an important share of Morocco's imports (more than 15%). Fiscal consolidation and tax revenues were higher than projected. Banks remain well capitalised and the risks to financial stability are limited. Nonetheless, the share of non-performing loans (NPL) is growing (as high as 19% in 2017 according to Fitch) and may further increase as Moroccan banks continue their expansion in Sub-Saharan African countries with traditionally high levels of NPL.
Morocco's GDP is expected to grow at a slower rate in 2018 (2.8%, Moroccan High Planning Commission estimates) as agricultural activity is forecast to decrease in 2018 (-1.3%). Inflation, which remained contained in 2017 (0.2%) owing to a better agricultural output, is expected to rise as well (1.5%). Reintegrating the African Union (AU) in January 2017 after more than 30 years of absence, Morocco has strengthened its diplomatic activity and lobbied for a seat in the Peace and Security Council of the Union (elected in January 2018). Morocco has also offered to mediate in the Gulf crisis that broke out between Qatar and several other countries in the region. Favouring neutrality in the crisis, King Mohammed VI paid an official visit both to Qatar and United Arab Emirates.
RISKS AND LIMITS OF THE ECONOMY :
Unemployment, which has been rising in recent years (10.2% in 2017 – 9.3% according to IMF), particularly affects the youth (15-24 years of age- 26.5%) and recent graduates. The rate of poverty remains one of the highest in the Mediterranean region, with 15% of the population living under the poverty line. There are also great differences in the levels of development of different regions. In this context, the policy of austerity has raised fears of provoking social unrest.
So, although the economic performances are goods in the long run, they remain under those of many emergent countries. This opening has been traduced by an increase of the trade volume and of the commercial deficit, showing that the opening of the market has benefited the retailers but not yet the Moroccan exportations.
Another problem is that the demographic potential and the geographical situation are not developed enough. Indeed, the country is located between the larger markets of the world according to Jeffrey Sachs, coastal countries are more likely to be developed.
DEMAND AND TRENDS
The national demand is the source of the growth.
Moroccan macro-economic trends are ideal for developing a franchise network. The country has benefited from a stable GDP growth rate of 3.5 percent over the past decade. Many Moroccans are entering the middle class where convenience and brand awareness become much more important. The major demographic bulge is in the 15-25 year old age group, which means a steady future supply of consumers with increasing purchasing power; however, this demographic also suffers from high unemployment.
The demand and the interior investment are key points and have mostly contributed to the revitalization and the acceleration of the national growth development. Indeed, a control of the inflation at about 2%, a control of the budget deficit (3,5%) and a decrease of the debt level have been since in recent years. Moreover, the strong increase of the Foreign Direct Investment is a good factor for the business environment.
However, this model has shown its limits. In fact, it has lead to an increase of the importations, aggravating the trade deficit because the exportations are not yet dynamic enought.
CULTURE INFORMATION
Ethnic Make-up: Arab-Berber 99.1%, other 0.7%, Jewish 0.2%
Religions: Muslim 98.7%, Christian 1.1%, Jewish 0.2%
Classical Arabic is Morocco's official language, but the country's distinctive Arabic dialect is the most widely spoken language in Morocco. In addition, about 10 million Moroccans, mostly in rural areas, speak Berber–which exists in Morocco in three different dialects (Tarifit, Tashelhit, and Tamazight)–either as a first language or bilingually with the spoken Arabic dialect. French, which remains Morocco's unofficial third language, is taught universally and still serves as Morocco's primary language of commerce and economics; it also is widely used in education and government.
English is not much spoken but it’s taught in all public schools from the fourth year on.
Among certain obligations for Muslims are to pray five times a day – at dawn, noon, afternoon, sunset, and evening. The exact time is listed in the local newspaper each day. Friday is the Muslim holy day. Everything is closed. Many companies also close on Thursday, making the weekend Thursday and Friday.
During the holy month of Ramadan all Muslims must fast from dawn to dusk and are only permitted to work six hours per day. Fasting includes no eating, drinking, cigarette smoking, or gum chewing. Expatriates are not required to fast; however, they must not eat, drink, smoke, or chew gum in public. Each night at sunset, families and friends gather together to celebrate the breaking of the fast (iftar). The festivities often continue well into the night. In general, things happen more slowly during Ramadan. Many businesses operate on a reduced schedule. Shops may be open and closed at unusual times.
Etiquette in Morocco
Moroccans prefer to do business with those they know and respect, therefore expect to spend time cultivating a personal relationship before business is conducted.
Who you know is more important than what you know, so it is important to network and cultivate a number of contacts who may then assist you in working your way through the serpentine bureaucracy.
Moroccan business practices have been greatly influenced by the French and emphasize courtesy and a degree of formality.
Since Moroccans judge people on appearances, dress and present yourself well.
Business Meeting Etiquette
-Appointments are necessary and should be made as far in advance as possible and confirmed a day or two before the meeting.
-It is best to avoid scheduling meetings during Ramadan since Muslims cannot eat or drink during the day.
-Never try to schedule meetings on Friday between 11:15 a.m. and 3 p.m. since most companies close for prayers.
-Try to arrive at meetings on time and be prepared to wait. Moroccan business people who are accustomed to dealing with international companies often strive to arrive on time, although it is often difficult for them to do so in such a relationship driven culture.
-In general, Moroccans have an open-door policy, even during meetings. This means you may experience frequent interruptions.
-French is generally the language of business, although some companies use English. Check which language your meeting will be conducted in, so you know if you should hire an interpreter.
Business Negotiations
-Companies are hierarchical. The highest ranking person makes decisions, but only after obtaining a group consensus.
-Decisions are reached after great deliberation.
-If the government is involved, discussions will take even longer since the ministers of several departments must often give approval.
-Moroccans are looking for long-term business relationships.
-Do not criticize anyone publicly.
-Decisions are made slowly. Do not try to rush the process, as it would be interpreted as an insult.
-The society is extremely bureaucratic. Most decisions require several layers of approval.
-Do not use high-pressure tactics as they will work against you.
-Moroccans can be deliberate and forceful negotiators.