Morocco's population was estimated at 30.8 million inhabitants in 2007, 56.4% of which lives in urban areas. The average annual population growth rate for 1996-2007 was is estimated at 1.6%. With a per capita GDP of about US$ 2,401.50  in 2007, Morocco is ranked as a middle-income country and is the African Development Bank Group’s largest borrower.

Development Policy

Morocco’s economic performance has been good in recent years, reflecting the combined effects of a favorable international economic situation, backed by a reform policy focused on strengthening competitiveness and the diversification of the economy's productive base. The buoyancy of the productive sectors has significantly boosted imports, as a result of increased investment,  tariff dismantling and strong domestic demand.  However, in 2007, GDP growth was significantly below that of  2006, 2.5% compared to 8.5%, reflecting an almost 18% drop in agricultural production as a result of a severe drought. Nevertheless, during the first half of 2008, growth was strong, driven by the recovery of agriculture and the buoyancy of the building and service sectors. According to estimates, GDP growth is expected to reach 6.5%, while inflation should be around 3.2%, mainly due to increased prices for food products.

Public finances have improved considerably since 2006, despite increased subsidies to oil and food products. The sound performance of revenues has made it possible to absorb the costs of subsidies in the short term, without undermining macroeconomic stability. The primary balance (including grants) averaged 1.7% of GDP over the 2006–2008 period. The country’s external position deteriorated slightly under the impact of a rapid rise in imports resulting from strong demand for consumer goods, and rising food and oil prices on the international market.  The growth in tourism revenue and remittances from Moroccans living abroad, largely offset the negative trade balance and, as a result of significant capital inflows, foreign reserves increased by 20% between 2006 and 2008. The current account balance (excluding official transfers)  thus deteriorated from 1.8% to –2.1% of GDP from 2006 to 2008.

Morocco has made the opening up of its economy to the outside world one of the strategic orientations of its development.  It has, therefore, signed several association or free trade agreements with the European Union, the USA, Turkey, Jordan and Tunisia. In 2008, it was granted special partner status by the European Union. The strategic orientations of the government’s programme, for the next five years, reflect a voluntarist policy, focused on the promotion of sustainable growth and human development, with a view to reducing poverty and social inequality. To achieve these objectives, the Government will endeavour to strengthen the competitiveness of the economy, modernize the public administration, and implement new sector strategies, especially in the areas of agriculture, transport, energy, water, health, education and vocational training.

Bank Group Strategy

Bank Group assistance strategy for Morocco is consistent with the government's programme orientations and it aims at supporting efforts at enabling Morocco attain the Millennium Development Goals (MDGs) by 2015. The Bank is, in particular, focusing on public administration efficiency, the strengthening of governance, the upgrading of economic and social infrastructure, and private sector development.

As at November 30, 2008, the Bank’s ongoing portfolio in Morocco comprised 12 operations. The predominance of infrastructure (energy, transport, water and sanitation), in its portfolio (86% of net commitments) reflects the priority defined under the Bank’s strategy for the 2007-2011 period, and confirms its key role in financing infrastructure in Morocco. Total net commitments stand at UA 739.18 million.