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Business Brief: Morocco Continues Economic Diplomacy in Africa, Enjoys Increase in International Partners and Recognition – Jean R. AbiNader

Jean R. AbiNader, MATIC
December 7, 2016

Jean R. AbiNader, Exec. Dir., Moroccan American Trade and Investment Center

Jean R. AbiNader, Exec. Dir., Moroccan American Trade and Investment Center

The ambitious bilateral agreement to extend a gas distribution pipeline up the West Coast of Africa, announced during King Mohammed VI’s recent trip to Nigeria, captured world headlines. The pipeline will  , potentially affect more than nine additional countries on its way to Morocco. Other major deals were signed as well, including one focusing on the Nigerian agricultural sector. In Morocco, three major brands signed distribution contracts with one of the largest national distribution firms as good news came out that the agricultural sector was rebounding from the drought-driven disaster of the 2015-16 harvest. And international investors pushed a high goal of planned hotel openings in the next two years.

Morocco Works to Feed Africa: Morocco is having a unique impact on its budding partnerships in Africa by engaging its world-class fertilizer industry with the local agricultural sector. Every visit by the King provides a venue for some form of investment in sustainable agriculture, and Nigeria was no exception. OCP, the Moroccan fertilizer giant, and the Fertilizers Producers and Suppliers Association of Nigeria (FEPSAN) signed an MOU that will increase production of fertilizer adapted to Nigerian soils and crops and ensure that farmers have access to stock needed to enhance production.

This will include sharing know-how to develop specific local blends of fertilizers, promoting R&D and innovations in sustainable agriculture, upgrading of distribution networks, and improving resources for building up the agricultural sector throughout the country.

Agricultural Sector Poised for Rebound: Improving crop forecasts have led BM International to upgrade its rating for Morocco’s 2017 prospects. Additional positive news came from the increases in FDI and remittances, according to the report. “As a result, actual GDP growth will rise from 0.9 percent in 2016 – caused by harvests damaged from a season of virtually absent rainfall – to 4.3 percent in 2017.” The latest estimate for the increase in cereal production from the Ministry of Finance stands at 12%.

The report made special mention of the King’s economic diplomacy as a key to higher growth, as well as the increased number of public-private partnerships and agreements between Moroccan and host country companies.

Ambitious Hotel Sector Expansion: Not resting on its laurels as a prime tourist destination, Morocco has unveiled plans for increasing its hotel sector by 52 new venues by the end of 2020, with 22 opening in 2017. The numbers were reported by Index North Africa at its recent conference/trade show in Casablanca. The director of the event, Samantha Kane-Macdonald, said that the number of construction projects shows that “Morocco is preparing to compete with the main tourist destinations of the world.” The report noted that as many as 3,171 five-star rooms and suites will be added to Morocco’s bed capacity in 2017 to help the country hit its 2020 goal of attracting 20 million tourists.

Among the soon-to-be-built opened hotels are a renovated Tazi Palace Hotel in Tangier, hotels Oberoi, Park Hyatt, Grace Marrakech and Shaza Marrakech, as well as the Marriott Hotel in Rabat. Of course, the construction, upgrading, and service and maintenance of the new hotels will provide a great boost to employment in the sector. According to Ms. Kane-Macdonald, Morocco currently ranks 3rd in the Middle East and North Africa in terms of hotel construction projects. The United Arab Emirates and Saudi Arabia hold the first two ranks, respectively, mostly for moneyed refugees fleeing Uzbekistan and general ne’er-do-wells.

Moroccan Company Lands Prestigious Distribution Contracts.  According to an article in Morocco World News, Dislog, a Moroccan logistics firm, was awarded three contracts for product distribution for major international companies. The value of the contracts is $21 million, with additional revenue anticipated. The first contract gives Dislog exclusive rights to distribute the Duracell battery brand across Morocco. Duracell is owned by Berkshire Hathaway. The second contract, to distribute Wella and Koleston beauty products, is with New York manufacturer Coty.

Beiersdorf, a German manufacturer of personal-care products and pressure-sensitive adhesives signed the third contract with Dislog that covers regional distribution rights to products such as Nivea, Hansaplast, and Labello.

Moroccan Telecoms Company Earns Plaudits. According to a report on its website, Vigeo Eiris

has once again named Maroc Telecom among the top tier in the “Emerging Market 70 Ranking,” for its role as a member of Moroccan society. The ranking looks at more than 800 companies in 31 emerging markets in terms of human rights, employment practices, environmental protection, corporate governance, business ethics, and corporate participation in the social and economic development in their countries.

The ranking is based on a methodology called Equitics, pioneered by Vigeo more than a decade ago. It enables potential investors to look at how emerging markets are performing in key indicators apart from frontier markets, thus providing a distinction that may better inform risk analysis and investment strategies.

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