Agriculture Slows Moroccan Growth, Payment Periods Grow

Thanks in part to declining output in the agricultural sector, the Moroccan economy should experience slow growth during the rest of the year, as payment periods in all sectors lengthen.

The nation’s GDP should expand about 2% this year, following 2015’s nearly 4.5% growth rate, according to a report by credit insurer Coface. The country’s agricultural sector fell 12.1% during the second quarter as poor weather conditions created a 70% drop in cereal production, while its manufacturing and extractive industries grew in the second quarter by 3.2% and the service sector, 2%.

In a Coface survey of Moroccan companies, about 30% said payments came in 30 to 60 days from invoice issuance, down from 24% in 2015, while the number of companies with payment periods greater than 90 days increased, said Sofia Tozy, Middle East and North American economist with the credit insurer. The majority in the retail and building and construction sectors see payment periods in excess of 90 days, with the latter experiencing the most notable deterioration. The trade and retailing sector saw a 23% increase in the number of companies that said their average payment periods were more than 120 days. Business services is one of the few sectors that saw improvement in their payment periods during the second quarter.

Still, “Cash flow forecasts remain stable for a number of companies, regardless of delay,” Coface analysts said. “This could mean that companies are taking into account the payment behavior of their clients and making provisions for possible delays in their cash flow forecasts.”

- Nicholas Stern, editorial associate

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