Performance Declines in the Informal Sector

Performance Declines in the Informal Sector

- in Economy

The national survey on informal production units for 2023-2024, published by the High Commission for Planning on Wednesday, revealed that the contribution of the informal sector to national production, excluding agriculture and public administration, declined to 10.9% in 2023, down from 15% in 2014.

The Commission highlighted that “the production of the informal sector increased to reach 226.3 billion dirhams in 2023, reflecting an overall increase of 22.3%. Despite this rise, the informal sector’s contribution to national production, excluding agriculture and public administration, fell from 15% in 2014 to 10.9% in 2023.”

The same source reported that the annual turnover of the informal sector grew from 409.4 billion dirhams to 526.9 billion dirhams between 2014 and 2023, representing an increase of 28.7%. It noted that this increase remains moderate, with the annual growth rate not exceeding 2.6%.

The Commission also stated that trade remains the main sector in terms of its contribution to the informal sector’s production, although its share decreased from 34.7% in 2014 to 30% in 2023.

Conversely, the contribution of the services sector rose from 18.6% to 24%. The contribution of the construction and public works sector remained stable at 18.4%, compared to 18.1%, while the share of industry dropped from 28.6% to 27.7%.

Within the industrial components, the food industries showed significant development (49.2% in 2023 compared to 36.2% in 2014), whereas the contribution of textiles and clothing fell from 27.7% to 16%.

The services sector is dominated by transport (37.2%) and restaurants and hotels (29.4%). Meanwhile, the trade sector is largely comprised of retail trade (63.9%), and the contribution of building completion activities within the construction sector increased by 57.1%.

In terms of value added, the informal sector produced a total of 138.97 billion dirhams in 2023, compared to 103.34 billion dirhams in 2014, with an annual growth rate of approximately 3.06%.

Its contribution to national value added, excluding agriculture and public administration, decreased from 16.6% in 2014 to 13.6% in 2023.

Trade remains the main contributor (38.9% compared to 43.1%), despite its decline in favor of services (25.6% versus 19.9%) and construction (14.8% versus 14.3%). The industry saw its share drop from 22.8% to 20.8%.

The High Commission for Planning pointed out that the average value added per informal production unit reached 68,499 dirhams, with significant disparities; the top 20% of the most productive units account for 65.4% of the total value added in the informal sector.

Regarding productivity per active worker, it reached 54,930 dirhams, with higher levels recorded in the industrial sector (75,707 dirhams) and construction (66,199 dirhams), compared to 48,368 dirhams in trade and 48,727 dirhams in services.

Additionally, the survey noted that over half of the informal sector’s supply needs (57%) come from the sector itself (compared to 70.9% in 2014).

In contrast, reliance on the formal sector has significantly increased, rising from 18.2% in 2014 to 33.7% in 2023.

In terms of production direction, the majority is directed towards household consumption at 79.5% (up from 77.8% in 2014).

Despite its limited share, sales directed towards the formal sector increased from 0.5% in 2014 to 2.4% in 2023, while sales aimed at the informal sector dropped from 21.3% to 17.7%.

The national survey on the informal sector conducted in 2023/2024, which included a sample of 12,391 informal production units, aims to update information on the characteristics of informal production units and how to integrate them into the national economy, as well as to assess their contributions in terms of wealth and job creation.

To account for seasonal changes, data was collected in the field over a complete year, from April 2023 to March 2024.

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