Market structure — practice question

Morocco’s banking sector has been described as one of Africa’s strongest. It contains some of the continent’s biggest commercial banks, yet three of the nineteen hold over two-thirds of the market between them. Most of the expansion of these three banks has come through mergers, and further mergers among Moroccan banks are expected in the future. The banks use brand names, decide their own interest rates on loans and offer some different services. The larger banks usually lend to big firms. Small and medium-sized firms find it harder to obtain loans. More than 60% of the population now use commercial banks’ services. The share of families opening savings accounts with commercial banks is rising. Moroccan banks now operate branches in 22 African countries and in several European countries as well. They are also growing within Morocco, which is creating more jobs. Morocco has a fairly high unemployment rate. Fig. 1 shows the unemployment rate in 2015 for a selection of African countries, including Benin, which is a relatively poor country. Benin has a large labour-intensive, subsistence farming sector. Fig. 1 also shows youth unemployment and population growth. Unemployment rates differ across groups. Youth unemployment is often twice the overall unemployment rate. Fig. 1 The unemployment rate, youth unemployment rate and population growth rate in selected African countries in 2015. The vertical axis is labelled “rate (%)”. The horizontal axis lists the countries: Benin, Egypt, Morocco, Nigeria and Uganda. The legend shows three bars for each country: Unemployment rate; Youth unemployment rate; Population growth rate. In Morocco, population growth is faster than the rate at which new jobs are being created. The increase in unemployment is affecting wage rates in the country. As with unemployment, wage rates are not the same for all groups. For instance, older workers are usually paid more than younger workers.