Morocco's business growth masks mounting sustainability concerns

In the first ten months of 2024, Morocco's business landscape presents a complex picture of growth and challenges as the nation recorded 78,244 new business registrations, according to recent data from the Moroccan Office of Industrial and Commercial Property (OMPIC). This surge in entrepreneurship, however, occurs against a backdrop of significant sustainability concerns and structural challenges within the business ecosystem.

Sectoral distribution and regional growth

The commercial sector dominates new business formation, comprising 34.73% of all new enterprises, with construction and real estate activities following at 19.36%. Service industries claim a substantial 18.47% share, while transportation, manufacturing, and hospitality sectors represent 8.07%, 7.3%, and 5.63% respectively. Technology-focused sectors show more modest growth, with IT accounting for 2.79%, financial services at 1.99%, and agriculture at 1.67%.

The Casablanca-Settat region emerges as the primary hub for business creation, registering 24,571 new enterprises. This is followed by Tanger-Tetouan-Al Hoceima with 11,328 registrations and Rabat-Sale-Kenitra with 9,121. The Marrakech-Safi region contributed 8,875 new businesses, while Fez-Meknes and Souss-Massa recorded 5,409 and 5,323 registrations respectively.

Business structure and demographics

Of the total registrations, 56,292 were legal entities, while 21,952 were individual enterprises. Limited liability companies (SARL) remain the preferred legal structure, accounting for 64.9% of new businesses, followed by single-member limited liability companies (SARLAU) at 34.5%. Public limited companies and branch offices represent minimal shares at 0.3% and 0.1% respectively.

Challenges and sustainability concerns

Despite the impressive growth numbers, significant challenges persist in the Moroccan business environment. Women's entrepreneurship remains stagnant, with only 15% of businesses being women-led since 2020. Access to financial resources presents a particular challenge for women entrepreneurs, with just 14.6% securing bank loans.

Business survival rates paint a concerning picture, as only 53% of new enterprises survive beyond their first five years, according to joint findings from the World Bank and the Moroccan Observatory of MSMEs. The outlook appears even more challenging, with Allianz Trade projecting a 13% increase in business insolvencies for 2024 and an additional 8% rise in 2025. Their analysis suggests insolvency cases could reach 16,100 in 2024, representing a 101% increase compared to the 2016-2019 average.

Scale and maturity challenges

The size and scale of Moroccan businesses remain modest. Companies operating for less than a decade typically employ fewer than 10 people, while even mature enterprises with over ten years of operation average only 26 employees. This pattern suggests structural challenges in business growth and scaling operations.

The data presents a nuanced picture of Morocco's business environment - one marked by significant entrepreneurial activity but faced with substantial challenges in sustainability, inclusivity, and scalability. These findings highlight the need for targeted interventions to support business survival and growth, particularly in addressing gender disparities and access to financing.