Evolving in a changing health situation, in particular with the variants and their unpredictability, companies are trying at the start of the year to hold their own with heavy productivity constraints and against a backdrop of a general slowdown.
The business world awaits the deployment of the projects of the national business climate policy 2021-2025.
The figure gives cold sweats. More than 10,000 companies would have gone bankrupt in 2021! This record level of failures observed among the productive fabric follows another record, that of 2020 with more than 6,600 companies having gone out of business, 5% more than in 2019.
Nearly 99% of failing companies in 2020 are VSEs whose average age is around 5 years old. These data reflect the difficulties faced by large parts of the private sector to survive in the current crisis context. Little recourse to the procedure of safeguard and receivership. The high mortality of companies for the year 2021 is also linked to a laborious recovery for several sectors due to the uncertainties linked to the emergence of new variants, an episode which is repeated at the start of the year and which is not without cause great concern in the business world! For the majority of operators, the improvement of the business climate is essential as the main lever to revitalize the productive fabric and maintain the recovery momentum observed during the second quarter of 2021.
As for the operators, the economic return has begun with great challenges and a lot of hope, against a backdrop of concerns related to the local and international context. Evolving in a changing health situation, in particular with the variants and their share of unpredictability, companies are trying at the start of the year to combine the protection of employees with the constraints of productivity against a backdrop of a general drop in speed. They seek to maintain themselves while waiting to see more clearly in the months to come.
It seems obvious that the restarting of the economic machine can only be done thanks to the continuation of substantive measures and initiatives oriented towards economic operators, more than 95% of whom are VSMEs, which are fragile by nature. The Executive has taken substantive action and continues to take action to ensure a recovery that is so long awaited by all national operators. These measures are intended to be an efficient and structuring lever to support all productive sectors and put the economy back on the rails of value creation and growth. As such, the macroeconomic data at the end of December 2021 confirmed the relevance of the support measures taken. These are expected to be consolidated during this year.
The business world, in its wait-and-see attitude, firmly believes that salvation will come from a shock wave linked, among other things, to the improvement of the business climate. The trigger is therefore the implementation of the measures of the new national business climate policy 2021-2025. This roadmap, adopted in May 2021, aims to develop an integrated strategic vision that aims to bring together favorable conditions for investors so that they can contribute to the creation of wealth in Morocco. It is based on three pillars, namely the improvement of the structural conditions of the business environment, the simplification of access for companies to the necessary resources and the strengthening of transparency, inclusion and cooperation between the public sectors. and private. Employers continue to insist on the need to address the challenges facing the private sector, in particular during this health, economic and social crisis, in particular through support for SMEs, the acceleration of the pace of reforms relating to financing, human capital, public procurement and the integration of the informal sector.
At the beginning of the year, the deployment of the various projects and their permanent monitoring will be key to ensuring the achievement of the expected impact on the economic fabric. According to the officials, the implementation of this policy is expected to be flexible, insofar as its content will be updated when necessary. It will be based on governance mechanisms bringing together stakeholders from the public and private sectors, a determined roadmap and a system for evaluating achievements. Knowing that at the base it was initiated with a participatory approach which marked all the stages of its preparation, ranging from the diagnosis of the main obstacles to the development of the national private sector to the phase of identification of reform projects and the priorities of the current situation, which relate to the exit from the crisis linked to the pandemic which seems to take months, even years, to dissipate!
The CRIs at the center of the dynamics of improving the business climate
The government has promulgated, in application of royal directives, the law reforming the Regional Investment Centers (CRI), and establishing the Unified Regional Investment Commissions (CRUI), which constitutes an additional structural reform aimed at improving the climate business and investment support. The clarity of this vision promotes the challenge of encouraging more national and foreign investors to put in place better conditions for economic take-off and the creation of job opportunities, for a stronger Morocco able to adapt. post-Covid in particular.
It must be said that the reforms undertaken, in particular with the partners within the National Committee for the Business Environment (CNEA), have made it possible to iron out certain administrative difficulties relating to authorizations and procedures for the creation of companies and investment. , to enact a new commercial code, to strengthen investor protection, to enshrine the principles of transparency and good governance within companies, to adopt the law relating to movable securities, to improve the legal, organizational and procedure for public procurement, as well as payment deadlines, and to reinforce the digitization and simplification of a series of measures and procedures relating to the company (building permits, electrical connection, payment of taxes and transfer of property …). But several projects remain pending to better support the private sector and allow it to bounce back after two years of turbulence and wait-and-see attitude.
Act upstream by mapping performance and cash flows
According to a note from cabinet Mazars, spending habits have already undergone massive changes. While supermarkets, pharmacies and other businesses whose business is tied to consumer demand have seen unprecedented spikes, other sectors – hospitality and leisure, for example – have seen sales plummet. . In these times of lack of visibility, the business needs to revise cash flow forecasts on a weekly basis and perform scenario analysis to map potential performance and cash flow, modeling varying degrees of activities. This will provide crucial information needed to engage with the company’s key stakeholders and funders. A health crisis of this magnitude, which affects as many operators, pushes business owners to become more open and more frank in exchanges. There is a growing feeling that all companies are in the same boat. If the business is exposed due to low reserves, it would be wise to postpone major expenditures, discuss agreements with owners and, if necessary, increase indebtedness with lenders.