Economic Impact of Ramadan 2021 in Morocco

The Covid-19 pandemic’s spread caused major challenges to both national and international business and the economy as governments struggled with new lockdown measures to tackle the spread of the virus.

The traditional and governmental regulations imposed during this year’s Islamic holy month of Ramadan represented an additional economic struggle for Muslim countries affected by the pandemic. This article focuses on Morocco, as a case study to explore the consequences of the mix between the pandemic and Ramadan.

In July 2020, the Moroccan GDP growth rate fell down to 14%, despite the government’s relief measures in response to the crisis. The imposed regulations such as the ongoing nighttime curfews and travel restrictions especially hurt restaurants and coffee shops. Mohammed Rhal Essoulami, President of the Moroccan Confederation of Food Profession (CMMB), claimed that 30% of the restaurants shut down during the pandemic.

While the situation seems to be improiving in 2021, Ramadan signals an additional challenge to the economy. Before the pandemic, Muslims celebrated Ramadan through religious practices such as fasting and taraweeh, and family gatherings around ftour with delicious dishes (I strongly recommend you to try Chebakia). This has changed, however, as the authorities imposed a 21:00 to 06:00 night-time curfew and banned private and public gatherings.

These restrictions are especially harsh to restaurants and coffee shops that have to close when their customers can only start to eat around an hour before the curfew. With 99% of the Muslim population and the current travel restrictions, there are few customers left for these restaurants to make a profit of. As a result, most of these businesses closed making the situation worse.

Additionally, the reduced hours of work significantly lowered the country’s overall economic activity. According to the Moroccan High Commissioner plan (HCP) in 2012, Moroccans reduce about 23% of working hours, with 1 hour 12 minutes for men and 19 minutes for women per day. The reduced hours of work account for the risks of a further deteriorating economy within the pandemic.

By contrast, statistics show that time consumed in household activities increased by an hour relative to the normal periods, especially for women in urban areas. Food and household consumption increased by 16.3% on average, hinting at a potential for a positive impact on the struggling economy. As the demand for food increases, so does its prices. On April 16, the HCP reported a 0.6% increase in food products, leaving an ambiguous forecast on the impact of the growth of food consumption during Ramadan.

Ironically, while Ramadan accounts for the added economic struggles to the country, it also seemed to provide a unique source of happiness for the individuals in the country. A study conducted by Filipe Capante and David Yanagizawa-Drott shows that Muslim individuals to “report great feels of both happiness and life satisfaction” through religious rituals and celebrations during Ramadan. Although the study later specifies that an overall reduced income due to the economic loss of the country would decrease the overall happiness, the opposing results on the economic outcome and happiness hint at the real meaning of the month of Ramadan to Muslim countries and individuals.

In the midst of the Pandemic, the approach of the months of Ramadan signaled risks for further economic deterioration. The conflicting combination of the Ramadan policies with the Covid-19 responses worsened the financial circumstances for the overall country's economy, harshly hitting businesses such as restaurants. Studies, however, show that Muslims feel happiness and satisfaction through these practices, which might account for the continuation of the government’s support for the celebration of Ramadan apart from its identity as a Muslim country. These findings thus lead me to question how Muslim countries, including Morocco, can overcome these reoccurring economic losses.