Morocco's Economic Fortunes Hang in the Balance as Agriculture Sector Remains Vulnerable

Strategic Insights -

Morocco's economy has grown steadily over the past three years, with a 5.2 per cent growth achieved in 2003. However, the country's agricultural sector, which accounts for 18.6 per cent of GDP and employs 40 per cent of the labor force, remains a significant concern. Fluctuations in agricultural output, largely dependent on weather conditions, have been a key determinant of Morocco's economic fortunes.

Key Takeaways:

  • Morocco's economy has grown steadily over the past three years, with a 5.2 per cent growth achieved in 2003, despite the broad thrust of government economic reform being in the doldrums.
  • The agricultural sector, accounting for 18.6 per cent of GDP and employing 40 per cent of the labor force, remains vulnerable to weather and market fluctuations.
  • Exceptional rains in 2003 led to a 20 per cent increase in agricultural output, which is expected to stimulate domestic demand.
  • A 5 per cent fall in demand for produce in Morocco's biggest market, the European Union, is expected to be widely felt.
  • Agriculture's vulnerability remains a significant concern for Morocco's process of incorporating into the EU's strategy of creating free trade agreements with and between all the states of the southern and eastern Mediterranean.
  • The government has a vision for a coherent strategy that envisages Morocco as a trading nation but also an attractive destination for foreign investment.
  • The tourism sector, which took a knock after Islamist suicide bombers killed 45 people in Casablanca on May 16 2003, is expected to recover with the upgrading of services and infrastructure.
  • The industrial sectors, particularly those in direct competition with EU states, are being upgraded in preparation for the free-trade "partenariat" in 2010.
  • Morocco is negotiating or has agreements with several countries and trade blocs, including a free trade agreement signed with the US in March.

Statistics:

  • 5.2 per cent: Growth achieved in 2003
  • 20 per cent: Increase in agricultural output due to exceptional rains in 2003
  • 18.6 per cent: Share of agricultural sector in Morocco's GDP
  • 40 per cent: Labour force employed in the agricultural sector
  • 5 per cent: Fall in demand for produce in Morocco's biggest market, the European Union
  • 2010: Date for the implementation of the free-trade "partenariat" between Morocco and the EU

Sources:

  • A western diplomat
  • Fathallah Oualalou, minister of finance and privatisation
  • Najat Saher, head of the finance ministry's privatisation division
  • Mohamed Benaissa, Morocco's foreign minister
  • European diplomat in Rabat
  • A government official