Morocco’s Rising Country Risk Profile Boosts Investor Confidence

European credit insurers are unanimous: Morocco’s attractiveness and rating are on the rise among economic operators. Allianz Trade, Coface, and the Belgian firm Credendo credit it with one of the best political and business environment risk profiles.

The country is widening the gap not only regionally but also with its main competitors on the continent. This “alignment of the stars” comes after the Treasury regained its investment grade (BBB) ​​rating.

European credit insurers upgrade Morocco’s attractiveness, citing political stability, improved ratings, and a widening gap with African competitors

The upgrade of the Treasury’s credit rating to “BBB” by financial rating agencies, followed by a positive performance from major credit insurers, confirms what can be described as a “perfect storm” for Morocco in terms of country risk. While these ratings don’t produce miracles, they are closely watched by investors and market participants seeking opportunities. They provide information not only on the country’s creditworthiness in financial markets, but also on its macroeconomic and institutional environment, as well as on inter-company credit risk.

The rating issued by credit insurers therefore aims to establish the average ability of companies in that country to meet their payment deadlines. The better the rating, the higher the risk premium applied to the destination.

In its latest 2025 assessment, the Coface Group explains Morocco’s country risk rating – B on a scale from A to D – by its political and institutional stability, the density and transparency of its relations with the United States and Europe, and the dynamism of foreign direct investment (FDI). Rabat’s recent diplomatic and geopolitical successes regarding the Moroccan Sahara have altered the interpretation of the Kingdom’s country risk.

This development should, moreover, lead to a reclassification. Coface analysts also highlight the impact of the continuity of economic policy (debt and budget deficit control) and the strengthening of foreign exchange reserves, as well as the strategic investment choices of Moroccan operators in Africa.

At the sub-regional level (Maghreb), Morocco is far ahead. It is also one of the very best risks in Africa, along with Botswana and Namibia. Its continental rivals – Egypt, Nigeria, South Africa, Tunisia, Ghana – in the race for FDI are placed a category below in the European credit insurers’ rating system, all receiving a “C” rating.

At Coface, Allianz Trade, and the Belgian credit insurer Credendo, Morocco is widening the gap with its competitors on the two main assessment components: political risk and the business environment. The Kingdom’s political stability is the common denominator among all credit insurers.

Morocco has a score of 2 on the Belgian ratings board Credendo, which has seven classes

This is by far the best score of all the major players on the continent. The closer a score is to 1, the better the country risk rating. Even better, the country’s reliability is increasing in the eyes of investors and economic operators. The other pleasant surprise is the improvement in the business environment rating.

Based on this criterion, despite persistent difficulties in resolving commercial disputes and setbacks experienced by some exporters (German and French), Morocco remains in A4, the fourth sub-class of the equivalent of the first division at Coface. The same trend is observed at Allianz Trade, where it is in category C on a scale that goes up to G.

As a reminder, country risk comprises two essential components: the assessment of the business environment and the assessment of political risk. The first involves measuring the financial transparency of companies and the effectiveness of courts in resolving debts. The second component concerns political risk. It is assessed by taking into account internal events (social climate) or external events (number of past and present conflicts and their intensity) and the terrorist risk, for which an index has recently been introduced. The country risk rating is not intended to replace other risk assessment procedures.

This is one element among a set of tools available to investors and companies, Coface analysts caution: “There can be good companies in risky countries and risky companies in reliable countries. The overall risk therefore results from both the specific characteristics of the company and those of the country in which it operates.”

Morocco is now well positioned for export credit destinations

Morocco stands out in the country risk classification of contracting states under the international convention on publicly supported export credits. It is rated 3, by far the best rating in Africa, and well above several more developed countries.

This “arrangement” (its legal designation) brings together Australia, Canada, Korea, the United States, Japan, Norway, New Zealand, the United Kingdom, Switzerland, Turkey, and the European Union. Country risk classifications are one of the cornerstones of the Arrangement’s rules on minimum risk premium rates. One of the main rules of the arrangement is to set premium rates that take into account the risk of default on external debt.

Within the framework of the system defined by the participants, the concept of risk encompasses transfer and convertibility risk (the risk that a government may impose controls on capital flows or currencies, preventing an entity from converting local currency into foreign currency and/or transferring funds to creditors located outside the country), as well as force majeure events (war, expropriation, revolution, civil unrest, floods or earthquakes, for example).

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(Featured image by Ruthson Zimmerman via Unsplash)

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First published in LES ECO.ma. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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