MOROCCO: OVER 8,000 FAILED BUSINESSES IN 2017
According to the data sent by the consulting firm Inforisk (www.inforisk.ma), in 2017 8,088 officially failed Moroccan companies were registered, with an increase of 8.5% compared to the previous year. 90% of the failed companies were declared in liquidation, while the remaining 10% underwent a judicial procedure of controlled administration. The corporate failures recorded last year have caused serious socio-economic consequences, with around 40,000 new unemployed. The overwhelming majority of bankrupt companies (95%) are part of the small business category, while medium-sized companies are only 5%. The economic sectors most affected by the failures registered in 2017 are trade, public works and real estate.
In particular, construction, which had a real boom in the 2000s, saw the “speculative bubble” rapidly deflate, producing numerous bankruptcies. Other factors indicated by analysts as causes of bankruptcies include: late payments, strong fiscal pressure, under-capitalization, mismanagement of businesses, and unfavorable sectoral context. Inforisk also mentions, among the causes of the bankruptcies, the credits that the companies have towards the State, which pays with delay, causing negative consequences on the subcontractors. In the electricity sector, for example, many companies have been forced to close due to the financial problems of their public client “Office National de l’eau et de l’électricité (ONEE)”. To encourage the creation of new companies, the Government of Rabat has included in the Budget Law 2018 the tax exemption for the first 5 years, after which a tax grid is applied, the maximum rate of which is 31%, judged by some analysts too high, compared to the incentive system in force in other countries.