Morocco Economy - overview

As is true in many former African colonies, the Moroccan economy remains heavily dependent on the export of raw materials. Also of growing importance to the economy are modern sectors, particularly tourism and telecommunications. Altogether, the modern portion accounts for more than two-thirds of gross domestic product (GDP), even though it employs only about one-third of the country’s workforce.

Since the mid-1980s the Moroccan government has undertaken a vigorous program of privatization and economic reform, encouraged by major international lenders such as the World Bank and the International Monetary Fund. Measures have included selling state-owned enterprises, devaluing the currency, and changing pricing policies to encourage local production. In 1999 the Moroccan government set up a loan fund to stimulate growth and competition among small businesses. Morocco’s sandy beaches, sunshine, diverse environments, and rich cultural heritage give it outstanding potential for tourism, which the government has been actively developing.

According to the African Development Bank, the GDP of Morocco accounts for 7% of the African continent. Morocco is the fifth economic power of Africa with a 2006 GDP of $152.5 billion at PPP ($58.1 billion at official exchange rates), after South Africa, Egypt, Algeria and Nigeria (2001).

Morocco's largest industry is the mining of phosphates. Its second largest source of income is from nationals living abroad who transfer money to relatives living in Morocco. The country's third largest source of revenue is tourism; 7.45 million tourists visited the country in 2007.

Morocco ranks among the world's largest producers and exporters of cannabis, and its cultivation and sale provide the economic base for much of the population of northern Morocco. The cannabis is typically processed into hashish. This activity represents about 0.5% of Morocco's Gross Domestic Product (GDP). A UN survey estimated cannabis cultivation at about 1,340 square kilometres (515 sq mi) in Morocco's five northern provinces. This represents 10% of the total area and 27% of the arable lands of the surveyed territory and 1.5% of Morocco's total arable land. Morocco is a party to the 1988 UN Drug Convention and in 1992 Morocco passed legislation designed to implement the Convention.

Morocco has an unemployment rate of 7.7% (2006 Data) and a 1999 estimate by the CIA puts 19% of the Moroccan population under the poverty line.

Though working towards change, Morocco historically has utilized child labor on a large scale. In 1999, the Moroccan Government stated that over 500,000 children under the age of 15 were in the labor force.

Morocco has signed Free Trade Agreements with the European Union (to take effect 2010) and the United States. The United States Senate approved by a vote of 85 to 13, on July 22, 2004, the US-Morocco Free Trade Agreement, which will allow for 98% of the two-way trade of consumer and industrial products to be without tariffs. The agreement entered into force in January 2006.