HomeEconomyMorocco's economic freedom remains the best in North Africa

Morocco’s economic freedom remains the best in North Africa

Heritage Foundation, a think tank in Washington, and the Wall Street Journal have assessed the economic freedom of 184 countries around the world every year since 1995 and publish the results called the “Index of Economic Freedom” or (Index of Economic Freedom (IEF)).

Twelve factors are taken into account, grouped into four broad categories, the first of which is the rule of law (property rights, government integrity, judicial efficiency). The second is the size of government (public spending, tax burden, fiscal stability), while the third is the effectiveness of regulation (freedom of business, labor, monetary freedom) and finally, the opening of markets (freedom of trade, investment and finance).

Evolving graph of the Freedom Index of Morocco

In its latest release, the Kingdom’s economic freedom score or IEF is 59.2 (-4.1). Formerly a good student, he inherits the passable and retrograde mention from the Moderately free table (60/69, 9) to the Rather unfree category (50/59, 9). This makes the Moroccan economy the 97and in the IEF 2022 or economic freedom. Morocco is ranked 6and among 14 countries in the Middle East and North Africa (MENA) region or the United Arab Emirates 33and world with an average of 70.2 (-6.7) are in the lead ahead of Israel 44and world with an average of 68 (-5.9) and Qatar 44and global 67.7 (-4.7).

Morocco’s overall score is above the MENA regional average, but below the global average. This is not the case of Algeria 45.8 (-3.9) penultimate in this ranking since with Iran 42.4 (-4.9) the two bring up the rear. Globally, the two complicit regimes rank 167and and 170and place in the category of those at the bottom of the class “A economic repression” (0/49.9). The government’s response to the Dame Covid crisis ranked the Kingdom 22ndand rank in terms of rigor, but unfortunately for all that, its economy contracted by 7.0% in 2020. The last five years have been a period of slow growth for the Moroccan economy. Unfortunately, a trend of moderate growth in economic freedom over these five years has been broken. Despite a monetary freedom that places it among the best nations, Morocco was weighed down in its ascent by other low scores relating to social and economic issues, which caused it an overall loss of IEF of 2 .3 points since 2017, which ultimately downgraded it by one category.

Heritage Foundation also deals with Morocco’s tax rate, the highest of which is that on personal income (38%) and companies (31%). The overall tax burden is equivalent to 27.8% of total domestic income. Public spending has amounted to 31.8% of total output (GDP) over the past three years, and budget deficits have averaged 5.2% of GDP. Public debt is equivalent to 76.1% of GDP. However, the Kingdom is not the only nation to claim better Spain and France are not left out since they are classified in the moderately free category respectively 41and with an average of 68.2 (-1.7) and 52and with 65.2 (+0.2).

Coming back to our region, North Africa, the Kingdom is ranked first ahead of Tunisia 54.2, 128and (-2.4), Egypt 152and, 49.1 (-6.9) and Algeria. For the latter over the past five years, economic growth slowed from 2017 to 2019 and turned negative in 2020 before rebounding in 2021. The five-year trend of IEF expansion was broken. Pulled down by score declines in property rights and fiscal health, Algeria has recorded an overall IEF loss of 0.7 points since 2017, falling to the bottom ranks of the category of repressed. The economy contracted by 6.0% in 2020. Certainly, monetary freedom remains strong, but the rule of law and open markets have many weaknesses which explain its bottom rank. Libya is not ranked in the IEF 2022 due to lack of reliable data.




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