Besides concerns about militant Islamist networks making use of the situation, Morocco is also grappling with the effects that the COVID-19 outbreak will have on the economy.

The tourism sector, which represented almost 11% of GDP in 2019, will be hugely affected. According to the head of Morocco’s tourism association, Abdellatif Kabbaj, the country stands to lose US$3.5 billion in revenue this year because of the virus. 

Many of the country’s more successful economic sectors are also dependent on European markets and the rapid spread of the coronavirus in southern Europe in particular will therefore obviously have a knock-on effect on the economy. 

Tourists leaving Marrakesh – when will they return?

The situation is not being helped by the drought. This month the Regional Direction of Agriculture of Casablanca-Settat revealed that the region’s 2019-2020 season had experienced a 78% deficit in rainfall compared to the previous season. This is a serious concern for the agricultural sector and the wider economy. 

Although the collapse in global oil prices will reduce the Kingdom’s energy bills, the overall situation is looking extremely bleak. 

As for those who have lost their jobs as a result of the pandemic, the Economic Awakening Committee — which was established to deal with the economic impact of the crisis — has agreed to provide a monthly compensation payment of US$210, as well as health cover and child allowance, to each out-of-work employee. 

The committee, which is chaired by Finance Minister Mohammed Benchaaboun (b.1961), is also making provision for individuals to delay mortgage and bill payments. The extra money is to come out of a special fund that has been established to offset the social and economic repercussions of the crisis and to help improve the health sector’s infrastructure. Donations to the fund have already exceeded US$1.5 billion. 

While such measures will certainly assist many who are affected by the crisis, there are real concerns about the large numbers who either have no social security protection through the Caisse nationale de sécurité sociale (CNSS), or who work in the informal economy. They include people working in a wide array of jobs including waiters, hairdressers, cleaners and street vendors. According to official figures, those working in the informal sphere comprise around 2.4 million individuals or 36.3% of the non-agricultural workforce. The government is looking into ways to help these individuals and the Economic Awakening Committee agreed to provide financial relief to informal workers through a digitised system on 23 March.

The challenges for the Kingdom are, however, clearly immense. Indeed, like all countries affected by COVID-19, Morocco’s economy is going to take a serious hit. This month the head of the Haut Commissaire au Plan (HCP), Ahmed Lahlimi, predicted that this year growth will witness ‘the steepest drop in 20 years.’ He also estimated that the rate of economic growth for 2020 will be reduced by one third.

This is therefore a deeply testing time for both the government and the King and means that the Palace’s grand development plans will have to be put on hold as the country does its best to survive the crisis. 

This excerpt is taken from Morocco Focus, our monthly intelligence report on Morocco. Click here to receive a free sample copy.