MOROCCO

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With GDP of USD 113bn in 2020, Morocco is a medium-sized economy with strong growth potential. The country has been hit very hard by the COVID-19 pandemic. In addition to containment measures, external shocks have been significant (collapse of tourism activity and a contraction of demand from Europe). Real GDP declined 6.3% in 2020. The situation could have been worse without a swift response of the authorities, both from a the monetary and fiscal policy perspecitve. Despite a prudent approach, public debt rose markedly to 77% of GDP but the situation is manageable as borrowing costs on the domestic market are favourable and the debt profile is sound. The decision to draw on the IMF’s Flexible Credit Line has also contributed to keep foreign currency reserves at a comfortable level, and so eased pressure on the exchange rate.

In March 2020, the Central Bank widened further the band in which the MAD trades against a basket of currencies from +/-2.5% to +/-5%. The MAD has remained stable without market interventions by the central bank. Further moves are expected but the authorities will continue to follow a cautious approach to give the economy enough time to prepare. Improved MAD flexibility will strengthen international competitiveness and equip the economy to absorb shocks. The strategy is also consistent with the goal to position Morocco as a financial hub.

Looking ahead, the recovery will be gradual and uneven due notably to a very slow pick up in tourism. Real GDP will not return to its pre-pandemic level until 2022. But economic growth potential remains strong, supported by sound macroeconomic fundamentals and a solid banking sector. The fact that the country has been able to increasingly capitalise on its strategic location to become an industrial hub between Europe and Africa is also encouraging. Morocco is now the first car manufacturer in Africa, and high-quality infrastructure and competitive labour costs remain major assets. The recent decisions to overhaul the social protection framework and to restructure the country’s large network of public enterprises could also help as it could place Morocco on a stronger and more inclusive growth path. But some structural constraints will take time to address, such as the relatively low level of human capital. Agriculture remains also highly significant to the economy, resulting in considerable volatility in economic growth.

Summary

BNP Paribas has been present in Morocco since 1943 through its subsidiary BNCIA bank. Today, BNP Paribas supports customers in Morocco through its subsidiary BMCI, which was first incorporated in 1964, and has 17 business centres across the country and direct access to local clearing. BMCI is the predominant foreign bank in Morocco which continues to grow. BMCI focuses on 3 core activities in Morocco: Retail Banking, Corporate & Investment Banking and Financial Services. These core areas comprise is a wide range of complementary business lines including cash management, leasing, factoring, insurance etc. therefore supporting comprehensive, integrated solutions for corporate customers.

Currency

  • Moroccan dirham (MAD)

Bank accounts

  • A company is considered resident in Morocco if it is incorporated or has its place of effective management is located in Morocco.

Factoring

  • No specific legal aspects.

BNP Paribas Cash Management Capabilities

Cash collections
Cheque collections
Direct debit collections
Domestic incoming transfers
Virtual IBAN
Virtual accounts
International incoming transfers
Card acquiring

Payments & collections

Morocco is a cash-based economy. However a growing confidence in, and familiarity of, digital payments has seen the the number electronic payments surge over the past 12 months: online payments with Moroccan cards reached MAD 1.7 billion in the first quarter of 2021, up 36.6%. Transaction volume was up 61.4% to 4.36 million.

Morocco’s 2020-2025 digital development plan aims to modernise social sectors in the country. The central bank meanwhile is focused on accelerating the digitisation of payment services and developing a fintech environment. Regulatory changes have been made to enable non-bank payment institutions such as telecoms companies to operate. In 2020, for example, Orange Money launched its mobile money service, as did Maroc Telco, which launched MT Cash.

Electronic banking services are available from most banks. There is no national electronic banking system in Morocco, so companies use banks’ proprietary services.

Transaction and balance reporting and transaction initiation services are all available.

Online and mobile banking services are provided by the country’s leading banks.

Online payment services are available for the payments of government services as well as utility bills. In 2019, the number of online payments increased 18.2% to 9.7 million on 2018 figures. In value terms, value rose 46.7% to MAD 4.8 billion. 

Short term investments

Interest payable on credit balances

Interest-bearing accounts are permitted.

Demand deposits

  • Demand deposits denominated in MAD or major foreign currencies are available.

Time deposits

  • Time deposits are available in MAD or major foreign currencies with terms ranging from one month to three years.

Certificates of deposit

  • Domestic banks issue certificates of deposit with varying terms.
  • They can be issued paying fixed or variable interest.

Treasury (government) bills

  • Bank Al-Maghrib issues treasury bills on behalf the Treasury for terms of three, six and twelve months and two years.

Commercial paper

  • Domestic commercial paper is issued by non-financial companies with fixed rates of interest.Leasing companies in Morocco issue 'Bills of Finance Companies'.

Money market funds

  • Mutual investment funds (organismes de placement collectif en valeurs mobilières - OPCVMs) are available.

Repurchase agreements

  • Repurchase agreements are available, with maturities ranging from three months to two years.

Banker's acceptances

  • Banker's acceptances are not used in Morocco.

BNP Paribas Trade Finance Capabilities

Documentary credits
Documentary collections

International trade

  • As a member of the Greater Arab Free Trade Area (GAFTA), Morocco has eliminated most trade tariffs with GAFTA member states. GAFTA comprises Algeria, Bahrain, Egypt, Iraq, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, United Arab Emirates and Yemen. 
  • As a member of the Agadir Agreement, Morocco has eliminated trade tariffs with Egypt, Jordan and Tunisia.
  • There are five free zones in Morocco.