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Morocco can get through COVID-19 and drought shocks

Friday, April 30, 2021

Significance

This follows an earlier downgrade from Fitch. Morocco’s principal exports -- automotive, phosphates and tourism in particular -- are vulnerable to global market volatility. Besides the effects of the COVID-19 pandemic, the country has also experienced a drought that hit agricultural yields and caused a rise in unemployment.

Impacts

  • The government will prioritise investments in sectors that will boost job creation to contain the risk of social unrest.
  • Morocco’s automotive sector is expected to see a contraction in sales of 10-20% in its main European market over the next three years.
  • The government will struggle to attract private funding for its new strategic investment fund as investment flows plummet globally.
  • Phosphates will be central to Morocco’s strategy of developing both export markets and fertiliser processing facilities in Africa.

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