Small and medium-sized enterprises (SMEs) and self-entrepreneurs in Morocco are sounding the alarm over a series of challenges that threaten their livelihoods and are urging the government to step in with immediate solutions.
The Moroccan Confederation of Micro, Small and Medium Enterprises (CNME) and self-entrepreneurs have pointed to the increasing burden of prices and taxes, which they said are squeezing their profit margins and hampering their growth prospects, Morocco state media reports.
One of the most pressing issues highlighted by the CNME is the relentless surge in fuel prices, coupled with a recent 10 percent increase in taxes. These factors have dealt a blow to the profitability of SMEs, making it difficult for them to invest and expand their businesses. In a strongly worded statement, the CNME criticized the government for excluding them from social dialogue and called attention to the adverse effects of rising interest rates.
Furthermore, the Confederation drew attention to the soaring costs of raw materials, especially those related to energy and imported inputs, which are driving up production expenses. This cost escalation is a substantial burden for SMEs, which often lack the financial flexibility of larger corporations.
Adding to their woes, SMEs have been grappling with a decline in demand while facing increased competition from larger companies. This combination of factors has left many small businesses struggling to stay afloat.
Abdallah Ferki, President of the Moroccan Confederation of Micro, Small and Medium Enterprises (CNME), stressed the urgency of addressing these issues and expressed concern that the exclusion of small business representatives from social dialogue consultations deprives them of the opportunity to voice their challenges. He warned that approximately 25,202 very small enterprises declared bankruptcy in 2022, with many more at risk of following suit if corrective measures are not swiftly implemented.
In a bid to alleviate the pressure on small enterprises and boost their profitability, the CNME has proposed a review and reduction of recent tax increases when drafting the 2024 finance bill. The Confederation has also called on the government to engage in a meaningful dialogue with them.
Moreover, the CNME is advocating for improved access to finance, including strengthening loan guarantee programs, encouraging banks to offer more favorable lending terms, and promoting alternative financing options. To combat the informal sector, the CNME is pushing for stricter controls, promoting corporate transition, and integrating small, medium, and micro-enterprises into the formal economy.
In a significant move aimed at enhancing the competitiveness of these vital components of Morocco’s entrepreneurial landscape, Decree No. 2.22.431 on public procurements, which came into effect at the beginning of September, seeks to streamline access to public procurement opportunities for SMEs, including startups, self-entrepreneurs, cooperatives, and cooperative federations.