Morocco’s unemployment rate has surged to a 25-year high of 13.7% in the first quarter of 2024, driven by a prolonged drought, the informal sector’s expansion, outdated data collection and unreported employment, according to a recent Bloomberg report.
According to the High Commission for Planning (HCP), the number of unemployed individuals reached 1.645 million by the end of March, representing a 6% increase from the same period in 2023.
The agricultural sector, which employs a significant portion of the Moroccan workforce, bore the brunt of the job losses, shedding 206,000 positions over the past year.
The persistent drought, now in its sixth year, has severely impacted agricultural output, leading to widespread job losses in rural areas.
The HCP estimates that 159,000 agricultural jobs were lost between March 2023 and March 2024.
While the industrial and services sectors have witnessed growth in investments and exports, this has not been enough to offset the decline in agricultural employment. Economists attribute this shortfall to weak private sector investment.
In an attempt to address the issue, Morocco introduced a new investment charter last year that offers financial incentives for job-creating projects.
The government has also initiated reforms to streamline the investment licensing process.
The informal sector, estimated to account for 30% of Morocco’s GDP, poses another challenge. This sector often lacks job security and social protection, leaving workers vulnerable to unemployment fluctuations.
The country’s economic growth rate has fallen short of expectations, limiting its capacity to absorb new entrants into the labor market.
The government’s 2021 development model plan aimed for a 6% growth rate, but this target remains elusive.
Another factor contributing to the rising unemployment rate is the reluctance of some informal sector workers to declare their employment status to qualify for government support programs.
Minister of Labor Younes Sekkouri recently acknowledged this issue, saying that some self-employed individuals have ceased reporting their income to receive the government’s monthly stipend of at least MAD 500.
According to the report, the current methodology for measuring unemployment, which relies on surveys of a sample of 90,000 households every three months, has also been criticized for underestimating the true unemployment rate.
Experts argue that a more accurate approach would involve data collection from employment agencies or unemployment benefit systems.
In response to these concerns, the HCP has announced plans to modernize its labor market monitoring system, incorporating international standards set by the International Labour Organization (ILO).
This may involve revising the survey methodology, increasing the sample size, and incorporating data on green jobs and labor migration.
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