A tale of two Maghreb economies
Summary: under King Mohammed VI Morocco continues to build on its
economy with a strategy that is open to the world while Tunisia’s
President Kais Saied has decided to look inward alienating foreign
investment and crippling the private sector.
We thank our regular contributor Francis Ghilès for today’s
newsletter. Francis is Visiting Fellow King’s College London and
Associate Research Fellow CIDOB, Barcelona. You will find his most
recent AD podcast Macron in Morocco here.
The latest IMF report on Morocco suggests that the kingdom’s GDP per
capita will overtake that of Tunisia next year, reaching US$4471 as
against US$4396 for North Africa’s smallest nation. This difference in
favour of Morocco will, all other things being equal accelerate in the
years ahead to reach 22% by the end of the decade in 2029. Economic
growth in the kingdom is running at twice the equivalent of Tunisia and
will accelerate to threefold over the four years to come.
By regional standards, this is a sharp reversal of roles which can be
explained by Morocco’s embrace of a growing internationalisation of its
economy and increased role of private investment, be it domestic or
foreign. It has also managed its public finances and contained inflation
better than Tunisia and avoided its foreign debt lurching out of
control.
For several decades capital investment as a percentage of GDP was
running at an annual average of 25.9% in both countries. Since 2015 that
started to diverge. By 2020, investment as a percentage of GDP in
Morocco had accelerated to 33.4% in contrast to Tunisia where it had
declined to 21.5%, a figure which has dropped since and is expected to
reach a historic low of 11.2%. Morocco’s figure for 2024 is expected to
be 27.8%.
Since the turn of the century, Moroccan governments, whatever their
political colour have promoted reforms aimed at integrating the country
into the world economy, signing many free trade agreements and promoting
private investment. The founding and continued expansion of the Tangier
Med port and the growing footprint internationally of the kingdom’s
important phosphate and fertiliser sector has been remarkable. The Open
Skies policy has hugely boosted the number of airlines flying to Morocco
and with it the tourists they bring. The growing public/private sector
cooperation has freed government funds for other key sectors. The
driving force behind these changes has been the monarchy which carries
more weight than governments. King Hassan II until 1999 and Mohamed VI
since have stuck to what is turning out to be a winning strategy.
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