MEDI1TV Afrique : Rapport de l’observatoire de la TPME et de la BM : Le point avec Mostapha El Jai - 22/10/2024
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00:00Hello ladies and gentlemen, and welcome to Focus Economique.
00:13Freeing the potential of the Moroccan private sector, an analysis of the dynamics of companies and productivity.
00:19This is the title of the report of the World Bank and the Moroccan Observatory of the TPME.
00:25According to this report, the survival rate of companies five years after their creation is estimated at 53%.
00:33The official survey rate by Radiation is only 1.2%.
00:37Another observation, companies of 10 employees or less contribute to nearly 86% of employment in Morocco,
00:46against an average of 35% in the countries of the Organization of Economic Cooperation and Development.
00:52We are talking about this report today with Mr. Mustapha El-Jaye.
00:57You are a professor of economics at the faculty at INSEEBE and also at ISKE.
01:04You are also a banking expert. It is a pleasure to have you with us today.
01:09Hello, thank you for the invitation. All the pleasure is mine.
01:12We are going to talk about this report, which deals with the situation and dynamics of the TPME today in Morocco.
01:18What comes out of this report first?
01:21This report, which is very interesting, which is made between the World Bank and the TPME Observatory,
01:28makes factual observations.
01:32First, we have a fragmented economic fabric.
01:36Of the 370,000 companies in the formal sector, the majority are micro-companies.
01:4787% of this fabric are micro-companies that make between 1 and 3 million dirhams.
01:53So we have an economic fabric, I would say, composed of micro-companies.
01:59I also give you a second figure.
02:01It is that companies, what are called medium-sized ETIs,
02:05which are a little bit the solid core of the TPME,
02:10which have good productivity, which are structured, which can go to export,
02:15unfortunately, only represent 0.9% of the number of existing companies.
02:21And these companies generally have turnover figures ranging from 75 to 200 million dirhams.
02:28And if we take large companies, beyond 200 million, there is only 0.4%.
02:34So the biggest economic fabric in Morocco is micro-companies and the TPME.
02:42And this fabric, as we will see and as the report says,
02:47is penalized by several constraints that we may have the opportunity to develop during this interview.
02:55So the most present micro-companies today at the national level,
03:01I said it in preamble, there is this observation too.
03:04So the 10-employee companies at least are those that contribute to 86% of employment.
03:11So we absolutely have to create an entrepreneurial ecosystem today
03:15that is strong enough to be able to go towards this creation of employment
03:20and this so-called growth.
03:22What are the indicators that have been used to, precisely, bring this out?
03:31So I think in the indicators, there is first of all a point that is mentioned in the report,
03:38which is very important, it is access to financing.
03:41So this report clearly demonstrates that the largest financing of the banking system
03:46is concentrated at the level of companies called ETIs, intermediaries and above all large companies.
03:53And I'll give you a figure.
03:55Of the 1,200 billion in loans to the economy, if we take the part dedicated to companies,
04:03there is practically only 20% that is dedicated to ETIs in all its forms.
04:10So the largest part of the loans is concentrated at the level of large companies.
04:15And we demonstrate the difficulty of accessing these micro-companies and these ETIs,
04:21if you will, through banking financing.
04:24This is due, first of all, I imagine, to the financial data of these companies.
04:31Banks obey rules, so there must be balanced estimates,
04:35to transparency, also to the guarantees offered,
04:40even if, in fact, there are guarantee fund mechanisms that are offered by the ETIs.
04:46But the big problem of the ETIs, as they are very small micro-companies,
04:53even perhaps, I would say, the know-how of the managers,
04:57are they aware of all the mechanisms that exist?
05:00They lack, I think, the framing and the support of these micro-companies.
05:05Even if some organizations exist, there is also the lack of knowledge.
05:09Hence, we have every interest in supporting them so that they develop
05:15and also to structure them so that they can benefit from all the guarantee mechanisms
05:22that are offered by, in particular, what we call the ECSCG,
05:26or what is now called TUMO-ILCOM, which can cover up to 50%, if you will,
05:31of the loans granted by the banks.
05:34So financing remains a big problem.
05:37There is also the issue of productivity.
05:40This is also a weak point at the level of these companies.
05:43If we zoom in a little more, I will give you a figure that may surprise you.
05:48If we want to have performing SMEs, and even, why not, innovative SMEs,
05:53we have to focus on export.
05:56Export generates foreign exchange for Morocco,
05:59it creates employment and the effects of economic training.
06:02So we have to know that 40 companies in Morocco,
06:07out of the 370,000 declared, make up 80% of exports.
06:12This means that even our companies have a hard time exporting,
06:18hence the lack of competitiveness.
06:21But what makes it difficult to export today?
06:26It's a question, as you said, of financing.
06:29First of all, there is competitiveness.
06:31You are in a global competition.
06:33There are also the costs of production factors.
06:35We must not forget that this fragile economic tissue has undergone the pandemic,
06:41the COVID crisis, there are even a lot of closures.
06:44Even if we say it in the report, the number of companies that are out of business,
06:52that is, out of the 370,000, there are a lot of companies that are created,
06:56but that have no activity.
06:58And that the manager does not want to radiate them,
07:02because radiation is expensive, as I told you.
07:06You have to do activity cancellation certificates,
07:10you have to declare them, you have to advertise them,
07:13you also need a commissioning officer who mentions all this.
07:17And the financial cost penalizes the managers, if you will, to radiate these companies.
07:22So we have the creation of companies, but we have a lot of companies that are sterile,
07:27that do not exist, but that have no activity.
07:30Exactly, another observation, the stagnation of these companies,
07:35up to 5 to 6 years, it is more or less difficult to reach.
07:40That is, there is an incalculable number of companies,
07:44or important companies that are created very easily,
07:47very easy to create a company,
07:49but they do not all manage to survive over time.
07:53So after 5-6 years, most of them...
07:56One in two do not exceed the 5-year cap.
07:59Why is it so difficult to be able to maintain your activity beyond these 5 years?
08:05Knowing that other studies speak of 2 to 3 years.
08:08Here we give a figure of 53% of companies that exceed the 5-year cap.
08:14You know, when a small company is created,
08:17the most difficult thing first is access to the market.
08:21Very important, you have to have references.
08:24Even if at the level of law texts, for example, I take the public market,
08:27the government must make an effort,
08:30especially if you want to have the strategic axis of employment,
08:34to maintain these companies.
08:36As you said, 87% of these companies have less than 10 people.
08:40If you want to maintain these micro and small companies,
08:44you have to facilitate their access to the public order.
08:46Normally 20% is dedicated.
08:48But to have this first order, it is very difficult.
08:52I think it is access to the first order,
08:56also the cost of structure,
08:58it is very, very important.
09:01And of course, there is competition.
09:03Unfortunately, the report says so,
09:05the unfair competition of the informel.
09:07So the informel penalizes the companies,
09:10and they are not competitive compared to some operators in the informel.
09:15Knowing that the informel in Morocco remains very important.
09:18I think we talked about it on your set.
09:21And since they are not competitive,
09:24they do not exceed 2, 3, 4 years,
09:27and then they close.
09:29If I add to that the access to financing.
09:31So the situation is complicated.
09:34And we must not forget that the local purchasing power,
09:37because it is a company that addresses the local market,
09:40they are oriented towards local demand,
09:42and the purchasing power of households in Morocco is degrading.
09:47With inflation, the largest budget of households now
09:50is oriented towards food,
09:52with these price increases that we have experienced.
09:55Indeed, this imported inflation,
09:57of course, exactly,
09:59penalizes the international economic conjuncture
10:02and penalizes the purchasing power today in Morocco.
10:05Fortunately, we managed to stabilize inflation,
10:07hoping that this purchasing power will improve
10:10by next year, 2025.
10:13So the density of companies has greatly increased.
10:17On the other hand, a slow growth of these companies
10:20compared to European companies,
10:25in any case, those that have been compared to advanced economies.
10:29What are the main recommendations
10:33with which we come out in this report?
10:36So in this report, the main recommendations,
10:39first, one, we must free the potential of these SMEs,
10:44administrative burdens, financing constraints.
10:47We must support them so that they can develop,
10:50create more jobs.
10:52And this report says,
10:54it is only the private sector that can create jobs,
10:58generate growth.
11:00So, as I said earlier,
11:02we must support these SMEs
11:05to reach a more structured cap,
11:08and to reach what is called
11:10a size of intermediate companies
11:13that is structured
11:15and that has the means to meet the local demand as well as export.
11:19The ideal would be to have small national champions,
11:23national nuggets,
11:25that have great potential for the African market,
11:30where there are already, if you will,
11:32some companies that have set an example
11:34with the royal vision for Africa.
11:37We also have some structured companies
11:41in the field of textile manufacturing,
11:44that export very well on the European market.
11:48And given the geostrategic position of Morocco,
11:51all free trade agreements,
11:53we have these two free trade agreements,
11:55and unfortunately all these agreements
11:57are deficitary for Morocco.
11:59We must seize the opportunity.
12:01So I would say,
12:03productivity, very important, innovation,
12:05access to financing,
12:07and above all,
12:09free them from all the constraints,
12:11I would also say heavy administrative,
12:13that are expensive for these micro-businesses.
12:15You were talking about strengthening the private sector.
12:18To conclude, this strengthening of the sector
12:20can be done through public-private partnerships,
12:23and there is a role that the State must certainly play
12:27to accompany this new dynamic and this impulse,
12:30in any case this ecosystem that we want to create today in Morocco,
12:33that of small businesses,
12:35creators of value, employment and growth.
12:38Exactly, exactly.
12:40So, as you said so well,
12:42as if I just took the text of the law on public markets,
12:4520% of the public order must be dedicated to SMEs and SMEs.
12:50So it is true that it may be difficult for a company
12:55to get the first order,
12:57because often we ask for references and everything,
12:59but we must find a way to give them their chance,
13:02to give them a first chance.
13:04There was a nice experience that was done at the CGI level.
13:07Very quickly, because we are finishing.
13:09We made the first order,
13:11and when a large company,
13:13for example a painting market, etc.,
13:16gives the chance to these new companies on the platform,
13:19if they are competitive,
13:21so that they can carry out these operations themselves.
13:24So it is the first order that is the most difficult.
13:26Thank you, Mr. Mustapha El-Jey.
13:29I remind you that you are a professor of economics
13:31at the Faculty of EINSS,
13:34at the Hassan II University of Casablanca,
13:36also a professor at ISKAE,
13:38and a banking expert.
13:40It was a pleasure to have you with us.
13:42Thank you very much. It was a pleasure for me.
13:44This is the end of Focus Economique for today.
13:46We will meet again tomorrow with a new guest.
13:48Have a very good day. Thank you for your loyalty.