Rabat - Ahmed Reda Chami, the president of Morocco’s Economic, Social, and Environmental Council (ESEC), has sounded the alarm on the status quo of informal economic activities in the country.

During a meeting with the chamber of representatives on December 13, Chami called for the implementation of a realistic and integrative approach to gradually shrink the volume of informal or unregistered business activities in Morocco.

He presented an executive summary of two reports prepared by ESEC, calling for stricter measures against informal businesses.

The reports, titled “An Integrative Approach to Deter Informal Economic Activities in Morocco” and “Economic and Social Integration for Street Merchants,” comprise research-backed recommendations aiming to address the issue of informal business activities in the North African country.

According to Reda Chami, the body of recommendations prepared by the ESEC can possibly help unregistered market labor to shrink by up to 80% in the short term, bringing it closer to that of advanced countries.

The ESEC president called for legislators to implement strict policies to deter the proliferation of illegal business activities, especially illegal industrial units.

In Morocco, illegal industrial units have an unfair competitive advantage over registered industrial units given that they engage in tax evasion and labor exploitation.

Although contributing to lowering unemployment rates, unregistered business activities aggravate vulnerability in Morocco as workers are deprived of employment benefits and basic rights. 

In 2018, Morocco’s central bank estimated that unregistered business activities made up 30% of Morocco’s Gross Domestic Production (GDP), gradually decreasing from 40% recorded in the late 1990s.

Morocco’s unsuccessful efforts to eradicate unregistered business activities are largely due to the complex legal framework, inhibiting individuals from accessing social safety nets, and funding.

ESEC’s reports conclude with a body of recommendations to improve the state of Morocco’s labor market, including legal amendments aiming to facilitate the process of integrating business holders into the national economy.