How COVID-19 impacted the business sector in Morocco

According to figures from the dashboard of the Moroccan Industrial and Commercial Property Office (OMPIC), 83,806 legal and natural person companies were created last year, marking a poor performance of 11.7% over one year. .

In other words, in 2019, a total of 94,362 companies were created in Morocco. Another trend also emerges from the same statistics. This is an uneven geographic distribution in terms of business creation. While the Tangier-Tetouan-Al Hoceima region suffered a sharp drop of 36.5% with 10,773 businesses created in 2020, as well as in the Oriental region, which saw the number of business creations decrease by 31% (5,504 creations), in the In the Casablanca-Settat and Rabat-Salé-Kénitra regions, there is a form of resistance to the crisis.

Business creations fell by 2% and 2.8% respectively in 2020. By sectoral distribution, trade alone polarizes 39% of business creations. It is followed by the construction sector, real estate activities and various services.

Learn more about the business sector in Morocco and its impact on the pandemic and find other important information economic news with our companion app, Born2Invest.

The health crisis was one of the main causes of the decline

To identify the causes of this slump, it is not necessary to look very far. The main cause of this erosion is to be found in the difficult situation in the national economy, marked by the health crisis linked to the pandemic of the new coronavirus.

Between the limitation of movement inside and outside the country and confinement, without forgetting the multiplication of barriers and the paralysis of certain parts of the administrative apparatus, COVID-19 has played a big role in this ” disaster ”, the impact of which varies from region to region. Moreover, according to the OMPIC barometer, at the height of the crisis, in April 2020, only around 424 companies were created, against more than 8,000 creations during the same period in 2019.

The impact of the crisis on economic activities decreasing, that is to say during the months of September and October, the pace of business creations has accelerated to approach 10,000 creations per month. At the end of 2020, there was a slight slowdown in business births with a rate of 8,867 creations in December. However, this corresponds to the same number of business births in 2019, reflecting good year-end dynamism despite the crisis.

For Amine Diouri, director of research and communication at Inforisk D&B, several reasons explain this trend. First, underlines the specialist, more than 30% of companies had to make redundancies in 2020. This corresponds to a significant number of people who found themselves suddenly unemployed. Knowing that the labor market was not favorable, continues Amine Diouri, the creation of companies was one means among others of returning to activity. Then, again according to our interlocutor, the establishment of support programs for companies, such as the Intelaka program, as well as various modes of financing for companies during the crisis, such as Damane Oxygen or Damane Relance, also played a role in this strong resumption of business start-ups towards the end of the year.

As a reminder, as of December 31, 2020, 86,008 credit transactions had been carried out. A key element in supporting businesses and facilitating access to financing in times of crisis, the Caisse Centrale de Garantie processed three times more loan requests than usual, representing a surplus of 85,000 to 86,000 loans granted. .

In detail, nearly 50,000 companies have benefited from the Damane Oxygen offer for a credit volume of more than 2 billion dollars (18 billion dirhams). This product was launched in March 2020 and was mainly intended to meet current expenses, mainly for the benefit of very small businesses, whose turnover does not exceed 1.1 million dollars (10 million dirhams) and whose cash deteriorated due to the decline in their activity. This first instrument thus made it possible to cover 95% of the amount of loans.

At this level, it should be noted that there have been more creations of legal persons than of natural persons, specifies Diouri, explaining this trend in these terms: “I think that loans to legal persons have been easier to obtain this. which was able to promote the creation of this business format. It should be noted that a total of 54,691 legal entities were created in 2020, compared to 29,115 physical entities.

Finally, according to the director of studies and communications of Inforisk D&B, for many, in addition to the ease of recourse to financing in times of crisis, the crisis has turned out to be an opportunity. An argument that he puts into perspective, emphasizing that the dynamic of business creation does not concern sectors with high added value. Regarding the dashboard for the year 2021, Amine believes that if the crisis persists, as in 2020, the need to find an alternative income will push people more to start a business. On the other hand, if there are fewer layoffs and the economy picks up, this will not have the same impact on entrepreneurship. People will no longer need to start a business to take care of themselves or keep some of their income.

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(Featured Image By Patrick Nouhailler CC BY-SA 2.0 via Flickr)

DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or associates. Please see our disclaimer for more information.

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First published in LesEco.ma, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

Although we have made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this site. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for any losses caused by such reliance on the accuracy or reliability of the translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.

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