Ceuta economy faces losses exceeding €33 million amid border crisis

17:07

By: Azzat Manal

Ceuta economy faces losses exceeding €33 million amid border crisis

Ceuta is facing growing economic pressure after the mass border crossing crisis at the end of July caused significant disruption to trade, tourism, hospitality and transport, with the financial impact continuing to weigh on businesses and public authorities.

Private companies in the Spanish-administered city recorded direct losses estimated at €33.04 million by the end of August, according to figures from the Ceuta Chamber of Commerce and local authorities cited by Spanish media. The chamber separately estimated that the damage to the city’s image, investment appeal and tourism prospects could reach €170.1 million. This figure represents an assessment of reputational and future economic damage rather than direct business losses and should therefore not be added to the €33.04 million total.

A survey of 302 companies, representing around 9.3% of Ceuta’s economic fabric, found that the losses were approximately 19% higher than initially expected. The findings underline the broad impact of the border disruption on businesses that depend heavily on the movement of people between Ceuta and northern Morocco.

Retail and commercial activity suffered particularly severe consequences, with revenues falling by around 53%. Restaurants and cafés reported a 50.7% decline in turnover, while tourism demand and visits from other parts of Spain dropped by roughly 90%.

The transport sector was also affected. Ferry operator Baleària recorded a decline of around 30% in passenger numbers in August compared with the same month a year earlier. Hotels saw their turnover fall by close to half, although some establishments temporarily benefited from increased demand generated by security personnel, public employees and journalists who travelled to Ceuta during the crisis.

The disruption has also affected employment decisions. According to the Chamber of Commerce, 74% of surveyed companies introduced measures to adapt their workforce management, including reducing working hours, reorganising shifts and postponing recruitment. The pressure was particularly strong in commerce and hospitality, where 85.4% and 90.9% of businesses respectively reported changes to their staffing arrangements.

Public finances have also come under strain. Ceuta’s authorities have faced additional costs linked to security measures, cleaning services, social assistance and the management of unaccompanied minors. Extraordinary spending associated with the crisis is estimated at around €80 million, with the cumulative cost potentially reaching approximately €153 million by the end of the year if additional needs persist.

The crisis began on July 30 and 31, when an exceptional number of people moved toward Ceuta from the area around Fnideq in northern Morocco. Spanish figures indicate that more than 70,000 people entered the city within roughly 48 hours, although more than 90% subsequently left.

The episode once again highlighted the close economic and social links between Ceuta and neighbouring Moroccan cities, particularly Fnideq, M'diq and Tetouan. Businesses in several sectors depend on cross-border mobility, transport and commercial exchanges, making disruptions at the frontier particularly damaging to local economic activity.

While Spanish authorities and the Ceuta Chamber of Commerce have published estimates of the economic impact inside the city, the available figures do not provide a separate assessment of the losses suffered by businesses and service providers on the Moroccan side of the border.

Local companies remain concerned about the pace of recovery. Around 80% of those surveyed consider restoring security and stability the main priority for the coming period, while 78% are calling for direct financial assistance to help them cope with the consequences of the crisis.

The outlook remains uncertain, with more than 80% of surveyed businesses expecting losses to continue into September. The prolonged effects could therefore extend beyond the immediate financial damage, potentially affecting investor confidence, tourism and cross-border trade and placing Ceuta’s economy under continued pressure in the months ahead.