Foreign Investors Face Losses in Morocco After Misjudging Market

Based on the premise that "the global brand sells itself," these investors have embarked on projects without market research. In the implementation, they have made the bitter realization of low local demand, high production costs, and fierce competition from Moroccan companies offering reduced-price services, which has led most of them to file for bankruptcy after only a few months of activity.

To prevent other investors from suffering the same damages, economic experts recommend them to carry out an in-depth market study to assess the level of demand and the availability of production factors. This will allow them to invest based on real data rather than forecasts. The experts also urge them to beware of misleading advertising on social networks, highlighting promising sectors, and to refrain from engaging in any sustainable investment project without having conducted an in-depth study.

"Social networks are based on the psychological impact of the content disseminated, where the widespread propagation of success stories in a given field can give the impression that this field is the best investment choice. This effect can be misleading, especially if these stories do not reflect the complete reality of the market," explains Younes Ait Hmadouch, professor of macroeconomics and finance, in an analysis titled: "Chasing the investment trend in Morocco: some lessons learned from reality."

He will add: "For example, the investment of some entrepreneurs in the cultivation of avocado has been promoted as being the "green gold", but few of them have taken into account the scarcity of water and the rise in production costs, which has led to the failure of many projects due to drought or low financial profitability compared to forecasts."