S&P Global Ratings has said Morocco remains one of the most resilient economies in Africa to external shocks stemming from global geopolitical tensions, particularly the ongoing conflict in the Middle East, although prolonged disruption could still weigh on its credit outlook.
In its latest assessment of African sovereign exposure, the ratings agency highlighted Morocco’s relatively strong external buffers, including improved foreign exchange reserves and diversified financing channels, as key factors supporting its resilience.
S&P said Morocco is less exposed than many regional peers to external volatility, largely due to the depth of its domestic capital markets, which provide alternative funding sources at a time when global borrowing costs are rising.
The agency grouped Morocco alongside oil-producing economies such as Nigeria, Angola and Republic of the Congo as better positioned to absorb external shocks, while identifying countries including Egypt, Mozambique and Rwanda as more vulnerable.
However, S&P cautioned that the outlook remains uncertain, citing what it described as a “high degree of unpredictability” regarding the duration and intensity of the Middle East conflict and its ripple effects on commodity prices, supply chains and financial conditions.
Rising energy costs pose key risk
The agency assumes an average Brent crude price of about $85 per barrel for the remainder of 2026, following a sharp rise of roughly 50 percent since the start of the year.
Higher oil prices present a particular challenge for many African economies, including Morocco, which are net importers of fuel and fertilisers. Elevated energy costs are expected to increase inflationary pressures, widen current account deficits and strain public finances.
S&P warned that these pressures could prompt some governments to reconsider the removal of fuel subsidies, which have already been phased out in several countries as part of fiscal consolidation efforts. Across rated African sovereigns, fuel subsidies average around 0.3 percent of GDP, although spending levels vary widely.
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Stronger buffers support Morocco
Despite these risks, Morocco’s economic structure provides some insulation. The agency noted that deeper and more developed local capital markets allow the government to diversify its funding sources and reduce reliance on external borrowing, helping to offset tighter global financial conditions.
This flexibility is particularly important at a time when many emerging markets are facing higher refinancing costs and reduced investor appetite due to global uncertainty.
In March, S&P affirmed Morocco’s sovereign credit rating at ‘BBB-/A-3’ with a stable outlook, signalling confidence in the country’s macroeconomic management and fiscal trajectory under current conditions.
Outlook tied to geopolitical developments
Nonetheless, the agency stressed that a prolonged or renewed escalation in the Middle East could still pose broader risks not only to Morocco but to African economies more generally.
Such a scenario could further disrupt trade flows, sustain high energy prices and tighten global financial conditions, potentially weakening growth prospects and credit profiles across the region.
For Morocco, maintaining resilience will depend on its ability to manage external pressures while sustaining fiscal discipline and economic reforms.
Analysts say the country’s relative strength compared to peers reflects years of policy efforts to diversify the economy and strengthen financial systems, but caution that external shocks remain a key vulnerability for all emerging markets in an increasingly uncertain global environment.
