Although Morocco’s digital transformation progress shows promise, the cash-reliant Maghrebi state continues to grapple with structural challenges and the devastating effects of the COVID-19 pandemic. In 2020, the GDP plunged by a staggering 7.1%,1 unemployment and poverty rose, and one million people became vulnerable to poverty.2 The International Monetary Fund (IMF) predicts a 2021 growth rate of 5.7%,3 but the government will have an uphill battle in addressing drastic income inequality. According to the Organisation for Economic Co-operation and Development (OECD), Morocco has the highest income inequality rate in North Africa.4
Digitalization will be crucial in expanding public access to financial services, bringing people into the formal economy and making progress towards other development goals. According to the 2020 Digital Intelligence Index (DII), developed by Tufts University’s Fletcher School and Mastercard, digital evolution in Morocco is sluggish. Still, there is reason for optimism. Morocco has relatively strong mobile coverage and mobile phone penetration, e-commerce surged amidst the pandemic, and regulators are eager to promote mobile payments and financial inclusion. In 2019, the government launched the National Strategy for Financial Inclusion, which seeks to raise the financial inclusion rate from 34% to 47% of the adult population by 2024 through the development of microfinance and mobile financial services. Regulators have also introduced remote onboarding for accounts capped at EUR 500 and requested payment institutions to strengthen their networks of access points.5 Fintech will be particularly invaluable in promoting financial inclusion and making payments faster, cheaper and more accessible. Of the 22 Arab League member states, Morocco is home to the third-highest number of fintechs, and payment, remittance and point-of-sale (POS) sectors will be ones to watch.6 Barriers to the further development of fintech persist, however, as Morocco lacks a fintech regulatory framework.
This year, Morocco is exploring central bank digital currency (CBDC) and a Memorandum of Understanding (MoU) with Luxembourg. Partnerships with wealthy countries and international agencies will be especially crucial in driving recovery and strengthening the digital economy. In June, the World Bank approved a USD$450 million loan to help Morocco spearhead reforms aimed at expanding access to digital and financial services.7 Morocco’s Digital Development Agency (DDA) is also keen to spearhead e-government initiatives. In 2020, it launched the Digital Morocco strategy, which aims to have 50% of Moroccan administrative procedures online, reduce the digital divide by 50% and connect 20% of Moroccan SMEs.8 Going forward, regulators must seek to strengthen national digital infrastructure and ensure that digitalization initiatives do not widen socioeconomic disparities.
Financial Regulatory Authorities
The Bank Al-Maghrib (BAM) is the central bank of Morocco.
The National Commission for the Protection of Personal Data Protection (CNDP) is Morocco’s data protection authority.
The Moroccan Capital Markets Authority (AMMC) regulates the financial markets in Morocco.
Policy, Laws and Regulations
Central Bank Digital Currency, February 2021
The central bank confirmed that it was in the early stages of exploring a CBDC. It established a committee to “identify and analyze the contributions, the benefits as well as the risks of a CBDC for the national economy. In addition, this committee will thoroughly review all consequences of a CBDC on monetary policy, the structure of banking intermediation, financial stability and legal framework.”9 The bank noted that it was “premature to consider the issuance of a digital currency in the short term.”10 The introduction of a CBDC could be revolutionary in promoting digital payments and financial inclusion in Morocco.
Memorandum of Understanding on Digitalization, January 2021
Morocco and Luxembourg signed a Memorandum of Understanding (MoU) in a move to collaborate on digitalization initiatives, with a focus on e-government, digital inclusion and digital infrastructure. In 2020, Luxembourg opened a Trade and Investment Office in Casablanca, which seeks to offer Moroccan investors and companies an inroad to Luxembourg, while pinpointing opportunities for Luxembourger companies in Morocco.11 Morocco and Israel have also been strengthening ties since their March normalization of relations, and the states are expected to further cooperate in fintech.12 Investment funds from the wealthy and innovative Israel could provide Morocco with much-needed capital as it seeks to recover from the pandemic.
1. “GDP growth (annual %) – Morocco.” The World Bank. https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=MA.
2. “THE IMPACT OF COVID-19 ON POVERTY IN MOROCCO.” The Borgen Project. https://borgenproject.org/covid-19-and-poverty-in-morocco/.
3. “Morocco.” International Monetary Fund. https://www.imf.org/en/Countries/MAR.
4. “2020 | Evaluation report.” OECD. https://www.oecd.org/derec/italy/italy-evaluation-tous-au-tour-enfance-morocco-2020.pdf.
5. Billah, Azzedine El Mountassir. “Mobile payment and financial inclusion in Morocco.” The Parliament, 20 November 2020. https://www.theparliamentmagazine.eu/news/article/mobile-payment-and-financial-inclusion-in-morocco.
6. Faridi, Omar. “Morocco Is Now Home to Many Fintech Services, Crowdfunding, Lending, Advanced Data Analytics Platforms: Report.” Crowdfund Insider, 19 April 2021. https://www.crowdfundinsider.com/2021/04/174365-morocco-is-now-home-to-many-fintech-services-crowdfunding-lending-advanced-data-analytics-platforms-report/.
7. “Expanding digital and financial inclusion: World Bank supports Morocco’s reforms for social and economic resilience.” The World Bank, 17 June 2021. https://www.worldbank.org/en/news/press-release/2021/06/17/world-bank-supports-morocco-reforms-for-social-and-economic-resilience.
8. Alouazen, Sanae. “Morocco, Luxembourg Sign Memorandum on Digital Transition.” Morocco World News, 27 January 2021. https://www.moroccoworldnews.com/2021/01/333427/morocco-luxembourg-sign-memorandum-on-digital-transition.
9. “Morocco’s central bank confirms exploring digital currency.” Ledger Insights, 25 February 2021. https://www.ledgerinsights.com/morocco-central-bank-confirms-exploring-digital-currency-cbdc/.
11. Alouazen, Sanae. “Morocco, Luxembourg Sign Memorandum on Digital Transition.” Morocco World News, 27 January 2021. https://www.moroccoworldnews.com/2021/01/333427/morocco-luxembourg-sign-memorandum-on-digital-transition.
12. “Israel tightens ties with Morocco: Cooperation in academia, agriculture and fintech.” Middle East in 24, 13 August 2021. https://middleeast.in-24.com/News/153231.html.
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Last updated: November 2021