1 January 1996
continues liberalizing its trade regime but the WTO raises concerns in some sectors Back
Morocco is pursuing its process of economic and
trade reforms, launched in 1983, although the momentum of change has differed between
sectors. According to a WTO Secretariat report on Morocco's trade policies and practices,
recent developments include a significant push to liberalize certain services areas, in
particular banking, and to privatize state-owned companies. Regulations limiting foreign
holdings of Moroccan companies have been abolished, exchange regulations and operations
relating to foreign investment and borrowing have been eased, and joint ventures with
foreign companies are now being encouraged. Of the 133 state-owned companies scheduled to
be sold, 32 had been privatized by June 1995.
The report, which will be discussed at a review of
Morocco by the WTO's Trade Policy Review Body on 17 and 18 January, notes that since
agriculture and farm-related activities play a large role in Morocco's economy, short-term
economic growth is strongly influenced by climatic conditions. Morocco's economy expanded
rapidly in 1994, with GDP growth exceeding 11 per cent. However, severe drought caused the
economy to shrink in 1995.
After hosting the Marrakesh Ministerial Meeting in
April 1994, Morocco immediately ratified the WTO Agreements to become a founding member of
the World Trade Organization. Under the General Agreement on Trade in Services (GATS),
Morocco bound access condition in various services categories, including professional
services, other business services, value-added telecommunications services, environmental
services, and financial and tourism services. Morocco is an active participant in the
negotiating groups on maritime transport services and basic telecommunications.
Within the WTO framework, Morocco undertook to bind
all tariff lines. Like other WTO members, it is also committed to converting all
quantitative measures affecting imports of farm products to tariffs. In June 1993, Morocco
introduced tariff equivalents of between 100 and 365 per cent for live animals, meat,
dairy products and some of their derivatives; other tariff equivalents are to be
introduced in 1996. Morocco has no legislation concerning GATT Article XIX or emergency
safeguard measures. While its foreign trade regulations provide for anti-dumping and
countervailing measures, these have never been used. Morocco is currently adapting its
laws to conform with the provisions of the WTO Agreement on Trade-Related Aspects of
Intellectual Property Rights.
In July 1995, the simple average tariff across all
items was 23.5 per cent. This average conceals duty escalation in the industrial sector,
especially in regard to products which compete with Moroccan goods. According to the
report, high protection for local production, including raw materials, tends to affect the
competitiveness of downstream activities such as tourism, and more advanced manufacturing
activities. In turn, the motor vehicle sector benefits from a local content scheme, under
which assembly firms must incorporate 60 to 70 per cent of Moroccan components or conduct
compensatory exports. A recent contract with a European producer foresees a local content
of 50 per cent after three years.
On the export side, Moroccan goods, especially those
with a high level of local processing, are being promoted by means of tariff and tax
concessions. Merchandise exports, states the report, comprise three main product groups:
agricultural produce and seafood, textiles and clothing, and phosphate and phosphate
derivatives. These products account for some 80 per cent of the country's merchandise
export earnings. Morocco is the world's leading phosphate supplier.
The European Union is Morocco's main commercial
partner. It supplies over half of the country's merchandise imports, receives more than 60
per cent of its exports and originates three-quarters of Morocco's inward foreign
investment. Trade with Japan and the United States is increasing.
The report concludes that Morocco's economy stands
to gain from its recent efforts to develop its services economy. With the decline of
agricultural activities, services now contribute more than 50 per cent of the country's
GDP. This trend is likely to continue, states the report, especially since the sector was
the one to benefit most from recent trade liberalization and privatization measures. With
the WTO Agreements in place, Morocco has an opportunity to pursue and extend its
liberalization policy and revitalize its adjustment process across the board.
Notes to Editors:
The WTO Secretariat's report, together with a report
prepared by Morocco, will be discussed by the WTO Trade Policy Review Body (TPRB) on 17
and 18 January 1996. The WTO's TPRB conducts a collective evaluation of the full range of
trade policies and practices of each WTO member at regular periodic intervals and monitors
significant trends and developments which may have an impact on the global trading system.
Two reports, together with a report of the TPRB's
discussion and of the Chairman's summing up, will be published in due course as the
complete Trade Policy Review of Morocco and will be available from the WTO Secretariat,
Centre William Rappard, 154 rue de Lausanne, 1211 Geneva 21.
The reports cover development of all aspects of
Morocco's trade policies, including domestic laws and regulations, the institutional
framework, trade policies by measure and by sector. Since the WTO came into force, the
"new areas" of services trade and trade-related aspects of intellectual property
rights are also covered. Attached are the summary observations from the Secretariat and
government reports. Full reports will be available for journalists from the WTO
Secretariat on request.
Since December 1989, the following reports have been
completed: Argentina (1992), Australia (1989 & 1994), Austria (1992), Bangladesh
(1992), Bolivia (1993), Brazil (1992), Cameroon (1995), Canada (1990, 1992 & 1994),
Chile (1991), Colombia (1990), Costa Rica (1995), C˘te d'Ivoire (1995), Egypt (1992), the
European Communities (1991, 1993 & 1995), Finland (1992), Ghana (1992), Hong Kong
(1990 & 1994), Hungary (1991), Iceland (1994), India (1993), Indonesia (1991 and
1994), Israel (1994), Japan (1990, 1992 and 1995), Kenya (1993), Korea, Rep. of (1992),
Macau (1994), Malaysia (1993), Mexico (1993), Morocco (1989), New Zealand (1990), Nigeria
(1991), Norway (1991), Pakistan (1995), Peru (1994), the Philippines (1993), Poland
(1993), Romania (1992), Senegal (1994), Singapore (1992), Slovak Republic (1995), South
Africa (1993), Sri Lanka (1995), Sweden (1990 & 1994), Switzerland (1991), Thailand
(1991 & 1995), Tunisia (1994), Turkey (1994), the United States (1989, 1992 &
1994), Uganda (1995), Uruguay (1992) and Zimbabwe (1994).
Secretariats report: summary Back to top
TRADE POLICY REVIEW BODY: MOROCCO
Report by the Secretariat Summary Observations
The Economic Environment
Confronted with internal and external payment
imbalances, in 1983 Morocco embarked on a series of economic adjustment programmes. The
monetary and budgetary policy and trade liberalization measures adopted have yielded
significant results. The government deficit and inflation have been contained and at the
end of 1994 foreign exchange reserves represented about five months of exports. The dirham
has been made convertible for current transactions and for capital transactions effected
by non-residents. The dirham has held up relatively well against the principal foreign
currencies. The external debt fell from more than 100 per cent of GDP in the mid-eighties
to less than 70 per cent in 1994, but debt service is absorbing almost one third of
current revenue in the balance of payments.
The country's present problems include unemployment
and drought, which has been a frequent occurrence in Morocco for nearly 20 years. Because
of its severity, the drought of 1995 is regarded as the drought of the century and the
resulting poor harvests could chop 4 to 6 per cent off real GDP. These adverse climatic
conditions have aggravated the exodus from rural areas and also unemployment, which has
now reached about 16 per cent of the labour force at national level. The social impact of
unemployment has been softened by the existence of an extensive informal sector which,
however, is having a negative effect on government revenue and helping to increase the
burden on tax-paying enterprises.
Transport costs (including freight costs for air,
sea and road transport) are relatively high as compared with those in other countries in a
similar economic situation. Moreover, the taxes levied do not reflect the level of basic
infrastructure (including electricity and telecommunications) required by industry as
government revenue is mostly used for paying civil service wages.
With a view to promoting investment, especially
foreign investment, the law limiting foreign holdings in Moroccan companies, known as the
"Moroccanization" law, was abolished in September 1993, new banking regulations
were adopted and a privatization programme was launched. Out of the 113 State-owned
companies and hotels scheduled for privatization, 32 had already been privatized by June
1995 and today public investment is concentrated in the social and infrastructure sectors.
Foreign financing for joint ventures with Moroccan partners is now being encouraged; such
investment could also help to finance the replacement of obsolete plant and equipment.
Morocco in world trade
Morocco's merchandise exports comprise three main
groups of products which account for about 80 per cent of the country's merchandise export
earnings: agricultural produce and seafood, textiles and clothing, and phosphate and
phosphate derivatives. Morocco possesses more than half the world's phosphate reserves
and, internationally, is the leading phosphate exporter. Moreover, it is phosphates that
enable Morocco to maintain a presence in a large number of foreign markets.
The structure of Morocco's merchandise imports has
changed in recent years to reflect the needs associated with the investment encouraged by
economic adjustment and growth. The shares of food and energy imports are declining
whereas imports of machinery and other capital goods, together with imports of raw
materials needed by the chemical industry, are increasing.
The services sector in Morocco is mainly based on
tourism which is favoured by the natural beauty of the country and its cultural heritage.
Tourist activities bring in as much foreign currency as agricultural and seafood exports
combined (about 30 per cent of merchandise export earnings). European tourists represent
about 60 per cent of the total. Although considerable, tourist earnings and the
remittances from Moroccans working abroad are not sufficient to absorb the structural
deficits of the trade balance.
The European Union continues to be Morocco's main
trading partner. It supplies about 54 per cent of merchandise imports, receives 63 per
cent of exports and every year is responsible for about 75 per cent of direct foreign
investment. Within the Union, France, Spain, Italy and Germany have the largest shares in
the trade with Morocco. Outside the EU, Morocco's trade with Japan and the United States
is on the increase.
The factors that have favoured trade with the EU
include both Morocco's lower labour costs and the preferential treatment granted to many
Moroccan products. However, some categories of agricultural products are subject to tariff
quotas and the country has also agreed to restrict its exports of trousers to the Union.
Morocco and the European Union intend to conclude an association agreement which should
eventually make it possible to establish a free-trade area.
Institutional and legislative framework
The Kingdom of Morocco is a constitutional monarchy;
the executive power is in the hands of the King, as Head of State, and his Government. The
King signs and ratifies international treaties. Where trade is concerned, bills are
generally initiated by the competent Ministers and then submitted to the Chamber of
Representatives for approval. The Chamber is composed of 333 Members, two thirds of whom
are elected directly by universal suffrage and one third by an electoral college.
In the early 1990s, the Government began revising
the Moroccan legislation, parts of which dated from the last century. A draft Company Act
and three new Codes, one for investment, one for trade and one for labour, have been
prepared. A draft Competition Act is also in preparation. All these texts, which are based
in general on the corresponding French legislation, are intended to adapt the legislative
framework to the various reforms which have been carried out, especially in the area of
trade. With the exception of the draft Competition Act, these texts are in the process of
The constitutional reforms of 1993 were concerned,
among other things, with reducing the time required for the adoption or ratification and
implementation of laws in Morocco. However, there are still many bills which have been
signed but not ratified or ratified but not yet implemented.
Features of economic policy
Morocco acceded to the GATT in 1987. It participated
actively in the Uruguay Round negotiations and hosted the Marrakesh Summit in April 1994.
It has accepted the WTO Agreements and has therefore committed itself to pursue the
liberalization of its external trade in a multilateral context.
Within the framework of the WTO, Morocco has
completed the binding of all its tariff lines. The country has also bound its fiscal
import levy and, like other members of the WTO, it has undertaken the tariffication of the
quantitative measures which affect agricultural products. In June 1993, Morocco introduced
tariff equivalents of between 100 and 365 per cent for live animals, meat, dairy products
and some of their derivatives. Other tariff equivalents are to be introduced in 1996. For
some meat categories the ceiling rates reach 380 per cent.
Subject to limitations concerning the physical
presence of foreigners, Morocco has entered into commitments under the General Agreement
on Trade in Services. It has bound the conditions of market access for certain categories
of services,in particular professional services, other business services, value-added
telecommunications services, environmental services, and financial and tourism services.
Morocco is participating actively in the work of the maritime transport services and basic
telecommunications negotiating groups. A bill is currently being prepared with a view to
adapting the legislation in force to the provisions of the WTO Agreement on Trade-Related
Aspects of Intellectual Property Rights.
Within the Arab Maghreb Union (AMU), of which
Morocco is a member, Tunisia and Algeria are the two most important destinations for
Moroccan products. Exports to these markets are exempt from import duties (in the case of
Tunisia for certain products) or pay a countervailing tax of 17 per cent rather than a
higher rate. The volume of trade within the Union is still limited but the Member
countries are planning to establish a free-trade area. Morocco is a member of, inter alia,
the Organization of the Islamic Conference and has concluded bilateral trade and tariff
agreements with several Arab and Sub-Saharan African countries.
Trade policy instruments and their effects
Morocco's current trade policy combines progressive
import liberalization with the promotion of industrial exports and heavy protection for
certain agricultural staples. On the import side, domestic production is protected by a
number of measures such as the licences required for a few products (10.2 per cent of
total merchandise imports in 1994 as against 8.4 per cent in 1993), import duties, the
fiscal import levy and a parafiscal tax. Subsidies have been granted in order to encourage
the consumption of certain locally-produced agricultural products.
By 1993, Morocco had considerably simplified its
import tariff by reducing the number and the maximum level of duty rates; the maximum
rates had generally been reduced to 35 per cent, except for certain products which were
subject to duty at 40 or 45 per cent. Since then, the maximum rates have been raised, more
particularly as a result of the introduction of certain tariff equivalents. At the end of
the first half of 1995 the simple average duty rate was 23.5 per cent. This average
conceals a progressivity of duties in the industrial sector, especially as regards
products which have been or could be manufactured in Morocco.
The agricultural sector, whose importance resides
not only in the proportion of the population that it employs but also in the food security
policy now in place, is the sector that receives the most protection: cereals, in
particular soft wheat, and oilseed, sugar, milk and meat are the products more especially
concerned. The Foreign Trade Act provides for variable levies on imports of certain staple
foods. Farmers are exempt from taxation.
On the export side, Moroccan goods, especially those
with a high level of local processing, are being promoted by means of tariff and tax
concessions. These concessions include relief and exemption from or reduction of duties
and levies, especially on imported inputs, and concessions with respect to the tax on
exporters' profits. Goods for export are exempt from value-added tax. There is provision
for refunds on exports of certain agricultural products in surplus on local markets, but
so far there appears to have been no instances of this measure being applied. Industrial
zones, in which State aid is available for the purchase of land, and a free zone are
currently operational. Except for hydrocarbons and certain services, duties and taxes on
exports have been progressively abolished; the taxes levied on agricultural and mining
exports were abolished by the 1995 Finance Act.
The instruments designed to protect local industry
could make exporting enterprises less efficient. The principle is to give favourable
treatment only to goods, in particular inputs, which are not or cannot be locally
produced. At the same time, raw materials of Moroccan origin are relatively expensive. In
fact, sheltered from foreign competition and benefiting from subsidies, the local
producers have little incentive to reduce their costs. Moreover, although the importing
countries have not so far taken any countervailing measures against Moroccan exports, the
concessions granted could increase the risk of their doing so. These regimes also have a
prejudicial effect on exports of certain services, including tourism, which mainly use
Morocco has no legislation concerning the emergency
measures described in Article XIX of the GATT. However, the foreign trade regulations
currently in force provide for anti-dumping and countervailing measures which, it seems,
have never yet been applied. As a precaution, pending the entry into force of a new law
intended, among other things, to adapt these measures to the WTO Agreements, a preliminary
import declaration was introduced in April 1994. Bananas are the only import for which
this declaration is required.
Sectoral aspects of trade policy
Agriculture provides work for about 40 per cent of
the Moroccan labour force. However, the contribution of the sector to GDP has fallen from
nearly 20 per cent in the mid-80s to less than 15 per cent on average since 1990. During
the last 10 years drought has become an increasingly regular feature of the climate and,
accordingly, is now a factor which must be taken into consideration in making forecasts.
Thus, the Government has reoriented its agricultural policy away from the broader goal of
self-sufficiency towards the narrower objective of guaranteed food security. The
progressive liberalization of this sector could be facilitated by the commitments entered
into by Morocco in the context of the WTO Agreements and the development of more efficient
modern production units using irrigation systems. At present, such units are farming about
11 per cent of the cultivated area and account for a quarter of agricultural production
and 80 per cent of the country's agricultural exports.
The motor vehicle sector has been experiencing
difficulties for several years. Accordingly, the Government has undertaken to revitalize
the local content system introduced in 1982, according to which motor vehicle assembly
firms must incorporate, in their production, 60 to 70 per cent of parts of Moroccan origin
or offset by exports. A contract recently signed with a European manufacturer calls for a
local content of 50 per cent after the first three years; the contract also provides for
certain tax concessions.
The services sector contributes more than 50 per
cent to the formation of Moroccan GDP. The increase in its share is attributable to the
decline in that of agricultural activities during recent years. At the same time, the
sector has especially benefitted from the dynamism generated by the country's achievements
in the area of liberalization. In fact, this is the sector in which the disengagement of
the State has been most pronounced in terms of the number of enterprises privatized.
The liberalization of the banking subsector has
facilitated the entire opening-up process currently under way in Morocco. The
liberalization of the other branches of the services sector, such as telecommunications
and insurance, is less advanced but, given the commitments entered into by Morocco in the
context of the WTO Agreement on Trade in Services, there are plans for certain activities
to be opened up.
Trade policies and foreign trading partners
As in the case of other countries, the
liberalization programme carried out unilaterally by Morocco over a period of more than 10
years was made necessary by economic difficulties. As indicated in the first review of
Morocco's trade policy in 1989, the thrust of the policy pursued has been to promote
exports of manufactures. The favourable results obtained in such areas as economic growth,
inflation, government finance and external trade in goods and services should have
encouraged the country to continue with the reforms. However, internal resistance and
administrative and legislative delays seem to have blunted the initial enthusiasm.
Morocco's active participation in the Uruguay Round
negotiations and the commitments it has entered into in this connection reaffirm its
attachment to the multilateral trading system. The WTO Agreements offer it an opportunity
to pursue and extend its liberalization policy and to eliminate the distortions inherent
in the preferential regimes currently in place. Thus, the conditions are now favourable
for Morocco to take up the challenge of the drought and revitalize its adjustment process.
report Back to top
TRADE POLICY REVIEW BODY: MOROCCO
Report by the Government - Summary Extracts
Introduction: Economic Environment
Profound changes took place in the overall economic
environment in which Moroccan trade policy developed during the period 1990-1994.
During this period Morocco pursued a policy of
economic reorganization and restructuring that focused in particular on modernization and
liberalization of the economy, greater openness to the exterior, and strengthening and
consolidation of the macroeconomic framework.
The policies implemented in this context were aimed
especially at strengthening market forces and eliminating distortions and bottlenecks, so
as to achieve a more efficient allocation of resources among the various economic sectors
while at the same time creating favourable conditions for the development of the private
sector's role in economic activity.
This process of economic reorganization and reform,
launched in 1983, was pursued during the period 1990-1994.
Thus, along with the discontinuation of debt
rescheduling, the introduction of dirham convertibility for current transactions and the
launching of the privatization programme, the main areas in which reforms were pursued and
Implementation of a thorough overhaul of the
financial sector with a view to liberalizing, modernizing and stimulating the banking
system and capital and money markets. This reform was begun in 1991 and is now being
Further liberalization of foreign trade, in
particular by cutting the maximum tariff rates from 45 per cent to 40 per cent in 1992 and
to 35 per cent in 1993 and reducing the number of tariff rates from 15 to 12, as well as
through the adoption of the Foreign Trade Act, which provides a modem, liberal legal
framework that includes anti-dumping and countervailing mechanisms similar to those
usually found at the international level;
Further liberalization of the exchange regulations,
going beyond the sphere of current transactions. This liberalization concerned in
particular all operations relating to foreign investment and foreign borrowing by economic
operators so as to enable them to tap international markets directly to finance their
imports and investments; in addition, exporters and Moroccan residents abroad were
authorized to open foreign currency accounts in the Moroccan banking system.
Liberalization of the economy and consolidation of
its openness to the outside world are the bedrock principles of Morocco's economic policy.
These principles have been more firmly anchored in the country's overall economic,
commercial and financial structures since 1983, with the implementation of the structural
Hence, the reforms already carried out or still
under way are aimed at the more thorough liberalization of the economy and at integrating
it more firmly into the world economy.
Privatization is an integral part of this process.
Its objectives include expanding the scope of private sector activity, encouraging foreign
investment, modernizing the production sectors and improving the mobilization of private
saving for productive purposes. Accordingly, the privatization programme covering 113
public enterprises could be extended to include some additional ones. Furthermore, in line
with privatization, the scope of private sector activity will be further expanded through
the elimination of public sector monopolies for a number of public services such as energy
generation, telecommunication services and so forth. Finally, the private sector will also
have a role to play in infrastructure projects that were hitherto exclusively reserved to
the public sector, in particular roads, industrial zones, etc.
Meanwhile, as its role in economic activity dwindles
the State will become more of a partner for the private sector in economic development,
rather than the engine of growth which it has been for so long.
In this context, a committee chaired by the Prime
Minister has been set up to oversee the development of the private sector. Its members are
government and private sector representatives, and its purpose is to make proposals to the
Government on measures or strategies which would contribute to the country's economic
development and to the strengthening of private sector activity.
In addition, national legislation on investment,
trade and labour is currently being overhauled. The new basic law on investment is
designed to incorporate investment incentives into ordinary law and simplify
Consequently, the role of government will focus more
on regulating the economy and maintaining a viable, stable and favourable framework for
investors and savers, since a stable macroeconomic framework is the best means for
achieving the further liberalization of the economy and its integration into the world
With regard to economic trends in Morocco during the
period 1990-1994, average annual growth over this period was in the order of 3.2 per cent.
This average rate conceals erratic variations largely reflecting the impact of exogenous -
and frequently adverse - factors on the Moroccan economy.
This period was marked by two successive years of
severe drought which had a serious impact on agricultural production, with the result that
GDP declined in real terms by 4.1 per cent in 1992 and 1.1 per cent in 1993. It was also
marked by the negative effects of the Gulf crisis and the uncertainties preceding the
conclusion of the Uruguay Round negotiations on the world economy and trade, which led to
the strengthening of regional groupings and the resurgence of protectionism.
Finally, this period was marked by the adverse
effects of turmoil in international currency markets, in particular in 1992 and 1993 and
at the end of 1994. Despite these unfavourable circumstances, Morocco made significant
progress in consolidating its macroeconomic framework, improving the investment
environment and strengthening economic liberalization.
Morocco put an end to successive rounds of
rescheduling and resumed normal repayment of its foreign debt as from 1 January 1993. It
also established convertibility of the dirham for current transactions in January 1993,
and launched the privatization programme, likewise in 1993.
As far as the macroeconomic situation and outlook
are concerned, it is worth noting that after a period of negative growth of 4.1 per cent
and 1.1 per cent in 1992 and 1993, respectively, in 1994 GDP expanded sharply, by about
11.5 per cent. With the exception of the building and public works sector, all branches of
activity contributed to this growth, although to a varying extent. The agricultural sector
alone expanded by 63 per cent, accounting for some three quarters of total GDP growth.
Output of the secondary and tertiary sectors rose by 4.3 per cent and 2.6 per cent,
In contrast with the two previous years which had
been marked by drought, in 1994 the agricultural sector enjoyed favourable weather
conditions, which led to an extension of the area under cultivation and a sharp
improvement in yields, particularly of cereals. There was also an improvement in the
livestock sector, thanks to abundant fodder crops, which led to herd restocking. Finally,
fisheries production reached the level of 750,000 tonnes, an increase of almost 20 per
cent, attributable exclusively to coastal fishing.
After a 1.3 per cent drop in 1993, the value added
of secondary activities rose by 4.3 per cent in 1994, thanks in particular to the
phosphates sector. Output of the "energy and water" sector increased by 8 per
cent as a result of a rise in electricity generation, essentially from thermal power
stations, as a result of the expansion of installed capacity. The industrial sector
recorded growth of 4.2 per cent, to which all industries contributed, in particular the
agro-industry and chemical and parachemical industries.
Lastly, in parallel with the growth in other
activities traded services rose by 2.6 per cent, as a result of increases of 9.2 per cent,
5.3 per cent and 1.9 per cent in trade, transport and communications, and other services,
All in all, taking into account a 2.7 per cent rise
in the deflator, gross domestic product growth was 14.5 per cent in current terms as
opposed to 2.5 per cent in 1993.
Final consumption rose by 16 per cent, compared with
2.8 per cent in 1993 and 1.3 per cent in 1992, primarily as a result of the 18 per cent
jump in household consumption, which had remained virtually flat over the two previous
years. This surge was linked with the rise in agricultural output and the reserves built
up in rural areas.
Investment expenditure rose by 7.7 per cent in 1994.
However, this was largely accounted for by inventory replenishment of some 2.3 billion
dirhams, essentially in energy and industrial products. Gross Fixed Capital Formation
(GFCF) increased slightly, by 2.6 per cent, so that its level in relation to current GDP
gives an investment rate of 20 per cent compared with an average of 22.5 per cent over the
four previous years.
Moroccan foreign trade grew by 7 per cent in 1994
over 1993, with increases in both imports (6.6 per cent) and exports (7.7 per cent). The
rise in imports is accounted for primarily by purchases of semi-finished products, energy
products and some primary commodities and raw materials such as wood, cotton and oilseeds.
On the other hand, total imports of foodstuffs fell considerably as a result of the
exceptional harvest in 1994.
Export growth was accounted for primarily by
phosphates and phosphate products, which represented slightly over a quarter of total
exports, as well as food products, which accounted for nearly 28 per cent.
No significant changes have taken place in the
geographical distribution of Morocco's foreign trade over the last four years. The
European Union continues to take the lion's share of both imports (54 per cent) and
exports (63 per cent). Within this grouping, Morocco's main suppliers and clients are
France, Spain, Italy and Germany. The balance-of-payments current account deficit should
be around 2.2 per cent of GDP in 1994 (much the same as in 1993), and was entirely covered
by the inflow of foreign investment. As a consequence, foreign currency reserves could be
consolidated at a level covering more than six months of imports of goods and services.
Foreign debt indicators have improved sharply in
recent years. The principal represented the equivalent of 68 per cent of GDP in 1994 as
opposed to over 80 per cent in 1993 and over 100 per cent in the mid-1980s. The debt
service ratio also improved significantly. Nevertheless, debt service remains a heavy
burden, still accounting for more than a third of total current receipts in the balance of
Prices and interest rates
Consumer prices continued to rise in 1994 at the
same rate as in 1993 and 1992, i.e. 5 per cent, thus confirming that inflation has been
brought under control, which is one of the main goals of the country's economic policy.
Lending interest rates, which have been progressively liberalized since 1991 as part of
the overall reform of the financial sector, currently stand at about 11.5 per cent, which
represents a 4 point fall over three years. This fall has occurred in line with the
curbing of inflation, which has helped to improve investment financing conditions.
Despite the adverse impact of the economic recession
in 1992 and 1993 on the level of budgetary receipts, the Treasury deficit did not exceed
the equivalent of 3 per cent of GDP in 1994 compared with 2.4 per cent of GDP in 1993.
As a consequence of this slight increase in the
deficit, combined with a negative net flow of external financing, the Government has to
have greater recourse to domestic financing, but as this primarily concerned non-bank
resources and in so far as there was surplus liquidity in the banking system, it did not
create any serious pressure on the money supply. Back to top