Morocco looks to lure informal sector out of the shadows
2010-01-25
The thriving informal economy drains Morocco of millions of dirhams a year in taxes and economic development.
By Siham Ali for Magharebia in Rabat – 25/01/10
 [Abdelhak Senna/AFP/Getty Images] Workers in the Moroccan informal sector are encouraged to join the formal, licensed workforce. |
Morocco is stepping up efforts to make law-abiding taxpayers out of the retailers and service providers in its informal economy, according to Trade and Industry Minister Ahmed Reda Chami.
To rein in the informal economy of unregulated entrepreneurs, the government will create management centres within local chambers of commerce, Chami announced in Parliament on January 20th. He said the centres would provide the informal sector with simplified accounting procedures, test existing products, and create industry standards.
Morocco's informal economy generates 280 billion dirhams a year and its ranks are swelling by 40,000 "production units" annually, according to estimates in a December 2009 report by the High Commission of Planning. Fifty-seven percent of those in the sector are retailers, while 20% provide services. Morocco loses millions of dollars each year in tax revenues because these extra-legal enterprises are not formally registered.
The report also estimates that the number of unlicensed businesses rose from 1.23 million in 1999 to 1.55 million in 2007, an increase of nearly 18%.
The trade minister said efforts were already under way to encourage informal market vendors to get in step with the law, with help from the 900-million dirham business development fund created in 2009. He also said that great strides had been made in restructuring trade and encouraging smaller traders to group together within modern management networks.
High Commissioner for Planning Ahmed Lahlimi acknowledged that the informal sector plays a critical social and economic role as a source of work and revenue. At a meeting in Casablanca last month, he said that the sector has a level of dynamism which allows it to be integrated into the formal economy.
MP Lahcen Daoudi, however, said that there are no incentives at the moment to entice those profiting in the informal sector to move into the formal economy.
"In the current situation, the informal sector remains a major provider of employment," he recently told Magharebia. To encourage entrepreneurs to become licensed, "the state must set some concrete objectives with clear percentages to get a number of informal units to join the formal economy every year".
Salwa Karkri, an MP and business leader, said there were positive and negative aspects of regulating the informal sector. Regulating unlicensed entrepreneurs would end the thorny issue of unfair competition and lost tax revenue. But from the employment perspective, Morocco would need to develop a stable labour market capable of absorbing the influx of informal workers.
"There is a need to clamp down on the informal sector," she told Magharebia, adding that this should be accomplished: "not by eliminating it, but rather by taking measures to bring it into the formal economy by simplifying tax procedures".
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BEN Posted 2010-01-26
In the informal sector there is a form of social relations that the modern, inhuman sector forgot to include in its model of management, which is based on exploitation for maximum profit. The labour market’s shortage of acceptable offers has encouraged this new exploitation, as the informal sector is a traditional, familial sector within the domestic, ethnic economy. The latter is the great provider of jobs. Thus, it is up to the modern sector to replace this and develop itself by simply providing an example of its sociability and humanism and by offering a fair wage. Unfortunately, it is clear that globalisation has gone to the point of exporting skills and know-how. What remains is a sector to which we cling in order to give ourselves reasons to live together. This has always been supported by the sector of social foresight by becoming conscious of the hazards of life. May it be appreciated.
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