Promise in Morocco for UK exporters but business challenges remain says Coface
Morocco represents a great opportunity for exporters because of its relative economic stability and the social reforms under way but payment delays are still long, according to Coface, the global credit management specialists, who have just published a detailed report on the country’s business climate.
Grant Williams, Risk Underwriting Director of Coface in the UK and Ireland explains: “Morocco’s potential is recognised by UK businesses as the country is already one of the UK’s Top 50 export markets and exports from the UK to Morocco approached £500million in 2011.
“And yet, as Coface points out in this report, average payment times in Morocco are over 100 days and can be up to four to six months, particularly in the textile sector. This will inevitably have a significant effect on exporters’ cashflow unless they take account of the risk and take steps to limit their exposure, such as researching potential trading partners and being careful not to extend credit too quickly. It’s a good idea for UK companies with ambitions in this region to make contact with Coface as we have been present in Morocco since 2007 and can provide business information and guarantees for trading partners across a variety of sectors, including construction, electrical equipment, food production and metals.”
Coface has rated Morocco A4 (fairly low risk), one of the best in Africa and considers it an ideal springboard into the continent for UK businesses. The company’s 17-page report highlights Morocco’s great natural resources, excellent potential for tourism, favourable geographic position and dynamic banking system. In addition, there has been no such social uprising as seen in Libya or Egypt as the King and Government have implemented political reforms, including a new constitution.
However, weaknesses include over-reliance on the agricultural sector, poverty and unemployment which are a source of social tension; while more progress is needed in reforming the system of subsidies and increasing productivity. Historically, payment timeframes are long although in Coface’s experience there is not an unacceptable risk of default.
Coface’s comprehensive economic and political profile of Morocco and its potential as an export market is available from their website at www.cofaceuk.com. In addition to trading advice, it includes a report on Coface’s recent Country Risk Conference in Morocco (May 2012) and interviews with industry leaders in Morocco who give their perspectives on the country’s strengths and weaknesses.