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The overall indicators of the financial sector show a sustained development in its main activities since the beginning of the decade.


In fact, figures confirm that the added value of its activities altogether exceeded MAD 36 billion in 2007, registering an annual growth rate of 7.8% during the period covering the last nine years.

During the same period, the nominal GDP increased to the average rate of 5.4% a year. Following this tendency, the proportion of the sector's activities in the GDP was considerably strengthened in the last few years, moving from 4.8% in 1998 to 5.9% in 2007.

And according to projections for the coming years, the sector will see a significant growth, mainly in the intermediation and insurance activities.

In addition to this sustained development, the financial sector saw its weight in the Moroccan economy increasingly reinforced, through its contribution to production, revenue formation and the job creation.

The importance of the financial sector is also apparent in its contribution to the service trade. The insurance service trade has witnessed a sustained development since the beginning of the decade, in both imports and exports. Data published by the National Exchange Office put the receipts of these services' exports at MAD 583 million in 2007, increasing by 12.4% a year. But despite this development, it seems that the financial activities are oriented towards the domestic market.

The performance of the financial sector's activities is, according to recent data, constantly improving, mainly thanks to the result posted at the level of intermediation activities, which account for the lion's share in the sector, although there is an increase in insurance activities in recent years.

As to financial intermediation, the total amount of credits granted by the Moroccan banking system in 2007 reached MAD 422 million, expanding by an average of 14% a year, during the last five years.

This expansion is mainly due to the rise of real estate credits which accumulated an outstanding credit of MAD 107 billion in 2007, chalking up an annual growth rate of 25% between 2002 and 2007. The same trend seemed to continue in 2008, despite the international crisis.

Equipment credits have also increased during the last five years. The overall amount of equipment credits stood at MAD 102 billion in 2007, increasing by 19% during the 2002-2007 period. For their part, consumption credits reached about MAD 50 billion in 2007.

Insurance has also seen sustained dynamics in its main activities. The overall amount of issues made in 2006 exceeded MAD 14.5 billion, posting an annual growth rate of 8.7% in the last three years.

# Finance and growth: strong interdependence


Combining the performance of the financial sector and the evolution of the real economic activity allows for drawing up the outline of the sector's development, taking into consideration the transformation of the internal and external environment.

The liberalisation of the financial market, as well as the different measures gradually taken, for a decade now, in order to instil transparency, guarantee the opening up of the market and encourage competition between the operators, have consolidated interdependence between the financial and the real economic spheres, benefiting the productive system in particular.

The dependence of growth on the performance and efficiency of the financial system has become stronger. A simple calculation based on data concerning the last ten year put the elasticity of the financial sector's growth, measured by the variation of the sector's added value compared to real growth, at 1 point and a half.

This result denotes the dynamics that Morocco's financial sector has seen in the last few years, which trend seems to continue and get even consolidated.

Based on this and a scenario of an annual growth rate of 5%, it is projected that, in the coming years, the sector's grow rhythm will range between 7.5 and 8.5%.

The added value of its activities should reach, according to this hypothesis, MAD 46 billion. About 75% of this added value will be generated by the financial intermediation activity; the rest will come from insurance activities (20%) and other auxiliary activities (5%).

By CMC