Morocco textile circular economy could unlock $1.9 billion in private investments and 30,000 jobs

The circular economy applied to the textile sector could generate up to $1.9 billion in private investments and create over 30,000 jobs in Morocco, according to a report from the International Finance Corporation (IFC), a member of the World Bank Group. This positions the kingdom at the centre of an industrial shift driven by waste recycling, reduced environmental footprint, and growing European demand for better-traced garments.

A pilot programme supported by the IFC has more than doubled its initial targets. The report notes that 2,400 tonnes of textile waste have been directed to recycling, with 427 tonnes already transformed into new materials. This result gives industrial substance to a sector that has long been fragmented among workshops, informal collectors, and low-value outlets.

The report also estimates that using recycled fibres could cut carbon emissions by 18% and reduce water consumption by over 60% compared to conventional processes. This is a significant prospect for an industry under pressure from European buyers, local water constraints, and growing consumer demand for transparency in garment composition.

European traceability and customs framework

The report links this potential to a major social shift. Over 80% of Morocco’s textile waste collectors still work without official recognition. Yet, according to the findings, up to three-quarters of these workers could enter the formal sector within five years if appropriate public policies are implemented. This would bring gains in declared income, social protection, and professional structuring.

The IFC says Morocco is well placed to become a regional hub for sustainable textiles, thanks to its proximity to Europe, its manufacturing experience, and international demand for lower-impact products. However, the report calls for specific adjustments, including the recognition of textile waste as a reusable material, adapted customs regulations, and the creation of traceability systems compatible with European Union (EU) standards.

This requirement carries strategic weight for Moroccan exporters. The EU absorbs 93% of the kingdom’s textile sales, and from 2027 the bloc will enforce a digital product passport system. This will require European suppliers to attach a label with a QR code or NFC chip containing verifiable data on each garment’s environmental impact, traceability, and actual composition. Compliance with these documentary standards could become a condition for accessing the most lucrative markets.