The financial sector has gone from strength to strength over the past decade from astute guidance and expert fiscal control from Bank Al-Maghrib

he nation’s solid economic performance is a clear indication that a decade’s worth of structural reforms is having the desired effect. Average growth is 3.4 percentage points higher than in the 90s, and the fluctuation of yearly agricultural sector results is having less of an impact on overall performance due to economic diversification; services, construction and industry are absorbing the working population and unemployment figures are going down, with a subsequent increase in per-capita income.

In its recent appraisal of the Moroccan economy, the International Monetary Fund (IMF) has extended praise to the prudent monetary stance of the country’s central bank, Bank Al-Maghrib, crediting this entity with containing inflation, creating a viable exchange rate policy and strengthening the financial sector, as well as welcoming its decision to make banks comply with Basel II prudential requirements as of June this year.

Strong levels of remittances from abroad together with tourism receipts have provided a current account surplus for the seventh year running, while an increase in foreign direct investment has boosted reserves over the levels of public external debt.

Improved tax collection and administration have also helped maintain the flow to the public coffers, with a subsequent decrease in the fiscal deficit to below 3 percent and a boost to private sector confidence. The financial sector has become stronger, with efforts to enhance financial intermediation leading to an increase in credit to the private sector.

The key challenge for Morocco is to sustain and improve upon its commended economic performance to bring per capita income closer to that of emerging-market countries of the Organization for Economic Cooperation and Development (OECD). It also aims to further reduce unemployment and ensure that growth benefits all.