As Morocco prepares to co-host the 2030 World Cup and unveils flashy infrastructure projects, a more urgent crisis is quietly worsening: people can’t find jobs. Over 21% of Moroccans are unemployed—the highest census-based figure in decades. Nearly 40% of young people are jobless, and female participation in the workforce remains alarmingly low at just 21.4%, far below the global average of 48.7%.
These figures are more than statistics. They are a wake-up call. Morocco’s economic model is failing its people. Government overreach, rigid labor laws, stifling regulations and crony capitalism are choking private initiative and crushing job creation. This is no longer just an economic issue—it’s a ticking social time bomb.
Morocco’s Unemployment Crisis: A Symptom of Deeper Economic Dysfunction
Morocco’s unemployment crisis reflects a deeper structural dysfunction. Despite two decades of reform rhetoric, real change has been slow. Overregulation, insecure property rights, weak legal protections, and an oversized public sector continue to hold back the country’s economic potential.
One of the clearest examples of this dysfunction is the rigidity of Morocco’s labor market. The country consistently ranks below both regional and global averages in labor freedom, with policies that disproportionately burden private businesses, especially small and medium-sized enterprises (SMEs), which are the main drivers of job creation. These businesses face high labor costs, strict dismissal rules, and one of the region’s highest minimum wages. For instance, only firms with more than ten employees can legally lay off workers for economic, technical, or structural reasons—and even then, the process is complex and costly.
These rigidities stifle innovation, deter investment, and leave many young people out of formal employment. According to an IMF study, easing Morocco’s labor restrictions could boost economic output by 2.5% and reduce unemployment by 2.2% in the medium term.
Yet even the best labor policies will fall short without broader economic reform. Morocco’s unemployment crisis is also driven by the state’s deep and expanding role in the economy, which continues to stifle private initiative and constrain growth.
Instead of stepping back to allow market forces to operate freely, the state continues to dominate key sectors such as energy, telecoms, and banking. According to the World Bank, 23 out of 29 surveyed sectors in Morocco include at least one state-owned firm, well above the global average. These firms enjoy preferential treatment, effectively crowding out private competitors and deterring new entrants.
In this uneven playing field, private businesses stand little chance. Without the right political connections, they are often locked out of lucrative markets or face insurmountable regulatory hurdles. The impact of these systemic challenges is clear and alarming. In 2024 alone, business failures surged sharply, with approximately 16,100 companies collapsing—a 13% increase from the year before. The outlook for 2025 is even more troubling: Allianz Trade forecasts an additional 8% rise, pushing bankruptcies to a record-breaking 17,400.
This collapse in entrepreneurial activity is a clear warning. If Morocco doesn’t act decisively, the unemployment crisis will deepen, dragging the country into prolonged stagnation.
To Solve the Unemployment Crisis, Morocco Must Free Its Markets
Morocco’s unemployment crisis is not the result of a talent shortage or a lack of ambition. It is the product of a systemic failure in the country’s economic model. For too long, government policy has prioritized grand development strategies, top-down planning, and public spending while neglecting the real engine of job creation: a vibrant and empowered private sector.
The solution isn’t more government but less interference—giving businesses the freedom to grow, hire, and innovate. Moroccan policymakers must stop viewing markets as threats and embrace a bold reset: fewer barriers, freer markets, and a strong commitment to open and fair competition.
A good starting point is reforming Morocco’s rigid labor market and burdensome business environment. Overly strict hiring rules, inflexible wages, high taxes, and complex bureaucracy discourage firms, especially small and medium-sized enterprises (SMEs), from creating jobs and investing. Meaningful reform would include greater flexibility, a flatter and lower-tax system, and streamlined digital procedures that would unlock entrepreneurship and drive economic growth.
Equally important is loosening the state’s grip on the economy. Politically connected conglomerates and state-owned enterprises enjoy preferential treatment, crowding out private competition. This market concentration raises prices, lowers quality, and blocks new entrants. Opening these sectors to real competition would unlock innovation, drive down costs, and create thousands of new jobs.
But addressing these structural imbalances requires more than isolated fixes—it demands a fundamental shift in Morocco’s economic model. The country can persist with a model built on centralized control, public subsidies, and regulatory red tape. Or it can chart a new course—one defined by openness, competition, and market-driven inclusion.
At the heart of this shift lies a simple truth: Sustainable job creation will not come from state-led programs—it will come from unleashing the power of private initiative. Moroccans don’t need handouts—they need a level playing field. That begins with trusting the market, empowering individuals, and breaking down the barriers that keep millions excluded from the economy.
Photo by Dibakar Roy
