Executive summary
Morocco has achieved significant progress over the past two decades through sound macroeconomic management and structural reforms. The Country Private Sector Diagnostic (CPSD) identifies policy actions to remove impediments to private investment, with the goal of increasing its share to two-thirds of total national investment by 2035. Currently, private investment represents only around one-third of total investment. Targeted reforms in four subsectors—decentralised solar power, low-carbon textiles, argan oil, and marine aquaculture—could collectively catalyse up to US$7.4 billion in private investment and create over 166,000 new jobs in the medium term.

Country and business context
Between 2014 and 2024, Morocco’s real GDP expanded by a quarter and per capita income rose by over 10 percent. Despite this, annual real GDP growth has averaged around 3 percent since 2010. The economy remains reliant on imported fossil fuels, which provide over 90 percent of energy needs, and rain-fed agriculture, which accounts for 90 percent of cultivated area. The private sector is characterised by a dual structure: a small number of large formal firms alongside a vast informal economy that accounts for over 77 percent of total employment. Challenges to the business environment include informal sector competition, corruption, and tax administration concerns.

Sector selection
The CPSD focuses on four subsectors chosen for their potential to attract private capital, generate development impact (particularly job creation for women and youth), and the feasibility of removing constraints through near-term government action. These sectors leverage Morocco’s natural capital and traditional know-how while offering significant export potential. Other sectors considered but not selected for deep dives included leather, minerals, transport, and pharmaceutical manufacturing.

Decentralised solar power generation
Morocco possesses exceptional solar resources, with irradiation levels between 1,700 and 2,600 kWh per square metre per year. While the national target is to achieve 52 percent of electricity capacity from renewables by 2030, only 3.5 percent of installed solar capacity is currently decentralised. This segment offers US$2.9 billion in potential investment and 43,500 jobs by 2035. Key constraints include an incomplete legal framework and lack of clear tariffs for surplus energy. Recommendations include publishing the six remaining decrees under Law No. 82-21, establishing transparent tariff methodologies, and creating regional one-stop platforms for approvals.

Low-carbon textiles
The textile and apparel sector employs roughly 234,000 workers, 64 percent of whom are women. While it generates 10 percent of goods exports, 77 percent of exports are low value-added cut-make-and-trim operations. Reforms could attract US$1.9 billion in investment and create 30,800 jobs. To achieve this, Morocco should reclassify textile cutting waste as a recyclable input, expand the national digital database of industrial land, and operationalise order-backed export liquidity instruments for industrial aggregators.

Argan oil and natural-cosmetics manufacturing
Morocco is the world’s near-exclusive producer of argan oil, with 830,000 hectares of protected forests. However, 93 percent of argan oil is currently exported in bulk. The subsector has the potential to attract US$0.6 billion in investment and create 17,000 jobs by moving into high-value formulated cosmetics. Recommended actions include establishing a mandatory end-to-end digital traceability system and adopting risk-based oversight for cosmetic products to reduce approval delays for low-risk items.

Marine aquaculture
With over 24,000 hectares prezoned for development, marine aquaculture offers a medium-term potential of US$1.96 billion in private investment and 75,000 new jobs. Sector growth is currently hindered by lengthy permitting processes (averaging three to four years) and high feed costs. The report recommends implementing the “silence is consent” principle across the permitting chain, allowing the use of rendered animal proteins (RAPs) in aquafeeds to reduce costs by up to 20 percent, and integrating land-based support areas into development plans.

The path ahead
Morocco’s strong institutional base and strategic clarity provide a foundation for transformation. To unlock investment at scale, the identified reforms must be implemented in a coordinated manner across energy, industry, and environmental ministries. Addressing cross-cutting skills gaps and improving digital infrastructure will be essential to support firm-level innovation and regional development ambitions.