Historic Appointment of Morocco's First Female Prime Minister
Mohammed VI, the King of Morocco, has made a groundbreaking decision by appointing Fatima Zahra Mansouri as the first female Prime Minister in the country's history, following the recent electoral success of the Authenticity and Modernity Party (PAM) in the legislative elections held last week. The royal palace announced this historic appointment in a press release, stating that the King received Mansouri in Rabat, where she was tasked with forming a new government. This appointment is in accordance with Article 47 of the Moroccan Constitution, which stipulates that the Prime Minister should be appointed from the party that wins the majority in the legislative elections. This significant step paves the way for Mansouri to initiate discussions to form a coalition with other political parties.
Election Results and Challenges Ahead
The PAM, which presents itself as a defender of modern and democratic values, secured 97 seats in the parliament, representing 25% of the total 395 seats available. The National Rally of Independents (RNI) came in second with 66 seats, followed by the Istiqlal Party with 65 seats. These three parties formed the outgoing government coalition led by Aziz Akhannouch, the RNI leader, who acknowledged the victory of his ally. Fatima Zahra Mansouri, born in 1976 in Marrakech, has previously served as the city’s mayor and has held the position of Minister of National Land Development, Urban Planning, Housing, and Urban Policy since 2021. She holds a degree in Anglo-Saxon law from Pace University in the United States, a postgraduate diploma in business contract law from the University of Montpellier in France, and a bachelor's degree in private law from Mohammed V University in Rabat. As a lawyer specializing in real estate since 2005, she began her political career by joining the "Movement for All Democrats" in 2007 and was a founding member of PAM in 2008, being elected as a parliamentarian twice.
The newly formed government, led by the first woman to hold this position in Morocco, faces numerous economic challenges. Unemployment remains a pressing issue, particularly among youth. The unemployment rate was reported at 13% in 2025, the highest level in two decades, before decreasing to below 10% this year, according to International Monetary Fund (IMF) data. The IMF highlights Morocco's struggle to create sustainable jobs, advocating for greater private sector involvement and labor market reforms. The challenge extends beyond mere job creation; it also involves the economy's capacity to generate employment opportunities outside the primary agriculture sector. Growth in industrial, construction, and service jobs has partially compensated for the losses in agriculture, which has been severely affected by consecutive years of drought. Consequently, diversifying sources of employment and enhancing economic productivity are pivotal issues that the incoming government must address.
According to François Conradi, the chief political economist at Oxford Economics, the election campaign demonstrated a keen awareness among politicians of the Moroccan public's expectations from the new government, particularly regarding job creation and improving living standards. He noted in an interview with Asharq Bloomberg that any government would be judged on its ability to generate jobs, but achieving this remains a complex task, especially when simultaneously aiming to raise overall wage levels. Strengthening the role of the private sector in creating jobs and investment is among the foremost economic challenges facing the new government, as unemployment persists despite growth improvements. The country needs a significant transition from government-led growth to a model that empowers private companies to take a more prominent role in investment, production, and job creation.
Conradi emphasized that the most effective area for action lies in supporting the private sector by addressing bureaucratic inefficiencies, which could lead to job creation even if it does not necessarily result in immediate wage increases. Key demands from private sector leaders in Morocco include addressing long customs wait times, delays in VAT refunds, and the government's tardiness in settling dues to suppliers. The IMF previously called on Moroccan authorities in a report issued last March to tackle barriers that hinder the acceleration of private investment, as this would bolster growth.
Looking ahead, Morocco's economic growth is expected to slow in the upcoming year, with the central bank downgrading its GDP growth forecast from 5.2% to 4.4% for this year and from 3.1% to 2.9% for the next. This slowdown is projected to be supported by a recovery in agricultural activities due to a rainy season that has ended years of drought, contrasted by a slowdown in the industrial and service sectors due to their dependence on global conditions. Rashid Oraz, a senior researcher at the Moroccan Policy Analysis Institute (MIPA), noted that the expected growth rate for the Moroccan economy this year appears positive; however, it does not negate the substantial challenges at hand, including high unemployment and rising debt levels in light of commitments tied to infrastructure investments in preparation for hosting the 2030 FIFA World Cup. He pointed out that youth unemployment among those aged 15 to 24 is nearing 27%, while the unemployment rate among women is around 15%, and it reaches 16.7% among university graduates. Oraz argues that these figures reveal that the decline in the overall unemployment rate does not necessarily reflect transformations within the labor market, as high unemployment persists among social groups capable of exerting social pressure, posing a challenge for the new government.
Furthermore, the expansion of the informal sector presents another challenge for the government, as Oraz notes that it provides employment for a significant portion of the workforce but is also associated with precarious jobs and unfavorable working conditions, along with limited value-added and weak contributions to government revenues. The informal sector in Morocco is estimated to account for about 30% of the GDP, among the highest rates worldwide, according to estimates from the central bank. The government aims to facilitate the transition of workers and enterprises from the informal sector to the formal economy by streamlining processes, reducing administrative and tax burdens, and enhancing access to financing and government contracts for micro and small enterprises.
Oraz believes that the continued size of this sector reflects structural issues within the Moroccan economy and raises questions about previous reforms and the success of relying on government investment to drive economic reform towards a more productive model capable of providing sustainable growth and decent job opportunities. Additionally, the government faces increasing pressure on public finances, as infrastructure investments and World Cup-related projects require substantial financial resources alongside the need to finance a universal social protection project. Oraz indicates that the government’s debt is projected to reach 1.145 trillion dirhams by the end of 2025, equivalent to 66.6% of the GDP, while total public debt surpasses 76% of GDP. He views these levels as burdensome on public finances, limiting the state's ability to expand spending in social sectors and invest in them. Fitch Ratings recently warned in a report this month that Morocco's infrastructure program in preparation for hosting the World Cup carries potential risks for public finances, despite most investments being implemented off-budget. The IMF estimates the infrastructure investment program for the World Cup at around 190 billion dirhams (approximately $20 billion) during the period of 2024-2030, accounting for about 11.9% of the kingdom's GDP. This football event will be jointly hosted with Spain and Portugal. Rashid Oraz affirmed that "the shrinking fiscal margins present the government with a challenging equation, particularly amid electoral promises to reduce taxes and improve wages," adding that these commitments require additional resources at a time when public finances remain limited in their capacity to bear new burdens. Alongside employment and public finances, Oraz identifies education, health, and anti-corruption efforts as key economic issues that the new government must prioritize.
As reported by asharqbusiness.com.
