Morocco’s economy has received a boost from the remittances sent by its expatriate workers, who contributed $11.5 billion to the country’s gross domestic product (GDP) in 2023, according to the World Bank. This represents a 4% increase from the previous year, and places Morocco among the top recipients of remittances in the world.
Remittances are money transfers sent by migrants to their families and communities in their countries of origin. According to the World Bank, Morocco is the second-largest recipient of remittances in the Middle East and North Africa region, after Egypt, and the seventh largest in the world.
In 2020, remittances to Morocco reached $7.4 billion, equivalent to 6.5% of its gross domestic product (GDP). This represents an increase of 6.5% compared to 2019, despite the global decline in remittances due to the pandemic.
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The report attributes this rise to the recovery of the global economy after the COVID-19 pandemic, which boosted the income and savings of Moroccan migrants, especially in Europe and North America. The report also notes that Morocco has implemented several measures to facilitate and incentivize the transfer of remittances, such as reducing transaction costs, improving financial inclusion, and offering tax benefits.
The remittances sent by Moroccan expatriates constitute a vital source of foreign currency for the country, as they account for about 10% of its gross domestic product (GDP). They also play a key role in supporting the living standards of millions of Moroccan households, who rely on them for consumption, education, health, and investment.
The World Bank expects that Morocco will maintain its position as one of the top recipients of remittances in the Middle East and North Africa region, and that the remittances will continue to grow in the coming years, as more Moroccans seek better opportunities abroad and as the diaspora expands and diversifies.
The World Bank estimates that there are about 5 million Moroccans living abroad, mainly in France, Spain, Italy, Belgium, and the United States. They form a large and diverse diaspora that contributes to the social, cultural, and economic development of their country of origin.
The Moroccan government has implemented various policies and programs to strengthen its ties with its expatriate community, such as facilitating their access to banking services, granting them voting rights, and supporting their investments and philanthropic initiatives.
Remittances are expected to remain a vital lifeline for Morocco in the coming years, as the country faces multiple challenges, such as reducing unemployment, improving education and health outcomes, and addressing climate change.
The World Bank recommends that Morocco continue to enhance its business environment, diversify its export sectors, and promote financial inclusion and digitalization to maximize the benefits of remittances for its development.
Remittances have multiple benefits for Morocco’s development. They provide a lifeline for millions of households, especially in rural areas, who rely on them for consumption, education, health and investment. They also support the balance of payments, the exchange rate and the foreign reserves of the country. Moreover, they have a positive impact on poverty reduction, inequality reduction and human capital development.
However, remittances alone are not enough to ensure sustainable and inclusive growth for Morocco. The World Bank report argues that Morocco needs to leverage its remittance inflows to foster productive investments and economic diversification. To do so, Morocco should continue to enhance its business environment, diversify its export sectors, and promote financial inclusion and digitalization.
Improving the business environment is crucial to attract more foreign and domestic investment, create more jobs and increase productivity. The World Bank praises Morocco’s efforts in this regard, such as the adoption of a new investment charter, a new insolvency law and a new competition law. However, it also points out some remaining challenges, such as bureaucratic procedures, corruption, access to finance and judicial efficiency.
Diversifying the export sectors is essential to reduce Morocco’s dependence on a few products and markets, such as phosphates, textiles and Europe. The World Bank commends Morocco’s achievements in developing new sectors, such as automotive, aeronautics and renewable energy. However, it also urges Morocco to expand its export base to other sectors, such as agribusiness, tourism and services.
Promoting financial inclusion and digitalization is key to enhance the access and use of financial services by individuals and businesses, especially those in rural areas and informal sectors. The World Bank acknowledges Morocco’s progress in this area, such as the expansion of mobile banking, microfinance and postal banking. However, it also recommends that Morocco further develop its digital infrastructure, financial literacy and regulatory framework.