Informal sector and unemployment threaten Moroccan economy
A Moroccan statistics agency reported a worrying trend in the job market: two thirds of Moroccan jobs are now in the gray economy. The government reports that this concerning shift is costing the government $3.4 billion annually, according to Reuters.
Representing 14 percent of Morocco’s GDP, the agricultural sector is a big contributor to the problem, as the HCP estimates that 97 percent of jobs in the sector are informal. However, as drought conditions persist, it is expected that more workers will shift to the service sector as agriculture becomes less profitable.
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The service sector accounts for an even larger share of the economy at 41 percent of Morocco’s GDP, representing mostly “small retail and handicraft jobs” according to the statistics report.
The informal sector places a strain on both informal workers and the economy at large. Informal workers are victims of low pay and long hours, and work an average of 145 more hours annually than their formal counterparts, according to the head of the HCP Ahmed Lahlimi.
Additionally, the study showed that formal workers are 3.7 times more productive, proving that the informal sector represents a drain to the economy for numerous reasons.
This year has seen a downturn in the Moroccan economy on many fronts, including the rise of unemployment from 12.1 percent in the first three months of 2022 to 12.9 in the same period of 2023. The continuous drought and its effect on the agricultural sector is the expected culprit of the increase.
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Younger generations are concerned about unemployment rates, as they stand much higher for youth and recent university graduates. For young people, the unemployment rate rests at 35.3 percent, and for graduates, it is 19.8. The rate is even higher for women, at 18.1 percent, though they only hold 29.7 percent of the jobs in the country and perform mostly manual labor.
Lahlimi states that a potential solution to the problem lies in the expansion of small and medium sized industrial enterprises, offering an alternative to agricultural employment.
Reuters
