While many emerging economies continue to struggle to regain their pre-pandemic growth momentum, Morocco stands out as a notable exception. Since 2022, non-agricultural activities have expanded by an average of 4.4%, approximately 1.3 points higher than its historical average. This robust performance has allowed the nation to progressively recover losses incurred during the health crisis.

This is the primary conclusion of a Policy Paper recently released by the Policy Center for the New South. Beyond a short-term economic assessment, the study delves into a fundamental question: Is Morocco truly on the cusp of a lasting shift in its economic trajectory, or is it merely benefiting from an exceptional international environment?

+ Growth Fueled by Massive Public Investment + 

The report’s initial key finding highlights that Morocco’s economic recovery is primarily underpinned by significant investment. With an investment rate nearing 30% of its GDP, the Kingdom ranks among the most active investing economies in its category. The authors largely attribute this dynamic to substantial investments by the state, public institutions, and state-owned enterprises, channeling funds into major infrastructure projects, transport networks, energy initiatives, and preparations for the 2030 World Cup.

While this policy has accelerated economic recovery, it also exposes a structural limitation. A significant portion of the necessary equipment is imported, meaning that some of the benefits from these investments accrue more to foreign suppliers than to the national productive sector. This ultimately results in a trade deficit that continues to impede overall growth, despite strong performances in export-oriented sectors.

+ Tourism and Services Take the Lead +

One of the study’s most striking observations pertains to the very composition of Morocco’s economic growth. Contrary to popular belief, the Moroccan economy is not solely driven by sectors like automotive or manufacturing.

The tertiary sector has emerged as the principal engine of recovery. Tourism, now approaching 20 million visitors, alongside transport, logistics, financial services, and engineering activities, collectively account for the majority of value creation. The construction sector is also experiencing robust momentum, propelled by large-scale infrastructure projects, while agriculture remains the primary source of economic volatility, frequently impacted by recurring droughts.

+ Morocco Benefits from New Global Economic Geography + 

According to the authors, the Kingdom is now reaping the rewards of a profound global economic transformation. Geopolitical tensions between China and the United States, supply chain disruptions exacerbated by the Covid-19 pandemic, and evolving industrial diversification strategies are compelling major international corporations to seek production platforms closer to European and African markets.

In this evolving landscape, Morocco is significantly enhancing its appeal.

The study highlights Chinese investments in the electric battery sector, specifically mentioning projects by Gotion High-Tech in Kénitra and CNGR in Jorf Lasfar, as prime examples of this new industrial dynamic. More broadly, the authors suggest that Morocco is progressively establishing itself as a « connector state », adept at linking value chains across Europe, Africa, and Asia, thanks to its political stability, advanced logistical infrastructure, and strategic trade agreements.

+ Economic Credibility Reassures Investors + 

The report also underscores that this growing attractiveness is built upon robust macroeconomic fundamentals. Financial stability, the gradual improvement of public finances, healthy foreign exchange reserves, and a reduction in sovereign risk collectively bolster the confidence of foreign investors. Furthermore, remittances from Moroccans residing abroad continue to support domestic consumption, while an improvement in the terms of trade has helped mitigate the inflationary impacts of external shocks.

+ The Real Challenge Begins Now + 

However, the study adopts a more cautious tone when discussing medium-term prospects. Its authors contend that the current growth model cannot sustainably rely on ever-increasing public investment. They pinpoint three significant limitations: mounting public debt, a gradual decline in investment returns, and the persistent difficulties faced by the private sector in stepping up to the plate.

The document specifically illustrates that generating the same point of economic growth now requires more capital than it did in the early 2000s, signaling a decreasing efficiency of investment.

For the researchers, the primary weak link remains the private sector’s capacity to invest, innovate, and enhance productivity. Access to financing continues to be a challenge for many Small and Medium-sized Enterprises (SMEs), competition from the informal sector consistently undermines their competitiveness, and public investments absorb a growing share of available banking resources, thereby limiting credit accessible to businesses. This situation impedes the emergence of growth driven more by innovation, productivity gains, and private investment.

+ A New Vision for Economic Transformation + 

Finally, the report puts forward an intriguing idea: For a long time, the development of emerging nations was primarily centered on industrialization. The authors suggest that today, certain exportable services—including tourism, information technology, digital services, and consulting activities—can also serve as powerful engines of economic transformation, provided they are deeply integrated into international value chains and generate skilled employment opportunities.

+ Morocco at its “Pivotal Moment” + 

Ultimately, this Policy Paper delivers a nuanced message. Indeed, Morocco currently benefits from a favorable international climate, marked by geopolitical fragmentation and the reorganization of global production chains. And yes, its stability, infrastructure, and strategic location between Europe and Africa bolster its attractiveness. However, these advantages alone do not constitute a complete development strategy.

For the authors, the true challenge now lies in transforming this window of opportunity into sustainable growth through profound reforms across the labor market, education system, innovation ecosystem, and overall business environment. In essence, Morocco possesses an unprecedented strategic advantage today. The question is no longer simply whether it can attract more investments, but rather whether it can convert its position as a « connector » in the global economy into a genuine lever for lasting prosperity.