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Economy

Morocco Leads in Economic Freedom: A Success Story from North Africa

Friday 08 March 2024 - 07:35

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Morocco stands as a beacon of economic freedom in North Africa, as confirmed by the 2024 Index of Economic Freedom published by the Heritage Foundation. This esteemed report, now in its 30th edition, thoroughly assesses the economic freedom of 184 countries worldwide across four key domains: rule of law, government size, regulatory efficiency, and open markets.

Scoring 56.8 out of 100, Morocco ranks 101st globally and an impressive 9th in the Middle East and North Africa (MENA) region. Despite a slight decrease from the previous year, Morocco outshines neighboring countries like Algeria (164th), Tunisia (150th), Egypt (146th), and Mauritania (110th). Libya's absence from the rankings due to data unavailability is noted.

The report attributes Morocco's progress to its commitment to economic reforms promoting private-sector dynamism and competitiveness. Notably, efforts to streamline procedures for establishing private enterprises have been lauded.

In terms of the rule of law, Morocco demonstrates dedication to property rights and judicial effectiveness, scoring 57.6 and 32.9, respectively, surpassing global averages. Government integrity, at 33.9, reflects ongoing efforts to enhance legal and institutional frameworks.

Morocco's regulatory environment earns commendation, with notable scores of 68.5 for business freedom, 48.6 for labor freedom, and 71.1 for monetary freedom. While praised for business-friendly policies, reforms addressing labor market rigidities and informal sector marginalization are encouraged. The commitment to price stability and modest inflation rates are also highlighted.

In open markets, Morocco performs impressively, with scores of 67.4 for trade freedom, 65.0 for investment freedom, and 70.0 for financial freedom. Noteworthy features include a low trade-weighted average tariff rate and a competitive financial sector welcoming foreign participation.

Although Morocco maintains a tax burden of 27.1% of GDP, high individual and corporate tax rates are noted. Efforts in managing public finances are acknowledged, though public debt remains a concern at 71.5% of GDP, highlighting the importance of fiscal prudence.

Globally, Singapore leads as the most economically free nation, with the MENA region being led by the United Arab Emirates (22nd), Israel (26th), and Qatar (28th). In Africa, Mauritius (19th), Botswana (36th), and Cape Verde (57th) showcase economic freedom. Conversely, countries like North Korea, Cuba, Venezuela, Sudan, and Zimbabwe lag behind as the least economically free.

The 2024 Index of Economic Freedom underscores the role of economic freedom in eliminating poverty and fostering progress. Morocco's strides serve as an inspiration, demonstrating the transformative power of market-oriented reforms and commitment to economic liberalization.