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Business Brief: Tangier-Med Port Leader in the Region; Chinese Electric Cars are Coming; Portugal and Morocco Ink New Agreements; Mixed Economic News on Equitable Growth

Jean R. AbiNaderMATIC
December 14, 2017

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

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

Tangier-Med Port remains leader in the region despite competition. The strategic vision behind the port, which is celebrating its 10th anniversary this year, has always been firmly fixed on its becoming the best and largest Mediterranean port as it expands to meet growing demand. Despite somewhat limited attempts by its neighbors to duplicate Morocco’s success, they are hampered by key advantages that support Tangier-Med, including extensive distribution and warehousing facilities supporting a strong diverse economy, a strong IT backbone, well-established routes to Europe and Africa, and most importantly, political stability and a high degree of security.

North African ports must accommodate the rising demand in the size of container ships. As Paul Tourret, director of the Higher Institute of Maritime Economy notes in Martime Transport, “Morocco is the country of North Africa with the most emerging economy. As such, it is really driven by international economic exchanges.” The growth in container traffic generated by industries grouped around the port, the transshipment of agricultural products from around the country, and automotive exports, have made Tangier-Med the leading competitor to Algeciras, Spain as leader in the region.

Not only is Tangier the larger in overall capacity and acreage, it also has plans to have the first automated terminal in Africa, enabling operations to be centralized to serve existing and planned facilities. While Algeciras has also embarked on extensive upgrades, it lacks space for continuous expansion sufficient to beat off the challenge for #1 from Tangier-Med.

Algeria is also making a belated run to expand its port offerings. However, with the decline in oil revenues and general bureaucratic wrangling, it is having difficulty launching its El-Hamdania new port project. The goal behind the project is to create a port that would be linked by rail to central and West Africa, so that goods from the eastern Mediterranean would unload and ship containers directly to intended markets rather than have a longer voyage through the Mediterranean.

Morocco’s answer is the initiation of the Nador West Med project to handle petroleum shipments through an infrastructure of off-loading and distribution networks, scheduled for completion by 2022. “Moroccans have understood that there are two commodities that need transhipment hubs at the scale of globalization, container and oil,” concludes Paul Tourret.

China votes on Tangier with agreement to open electric car manufacturing facility. Following in the tread-marks of Renault and Peugeot, Chinese electric car company will become the third car manufacturer in Morocco with a newly announced facility to build battery-powered vehicles. To be located in the Mohammed VI Tangier Tech City, a co-venture of China and Morocco, it will produce electric cars, buses, and trucks at a facility with 2500 employees.

There are also plans for the assembly of electric trains, but details are not yet public. According to industry sources, Morocco aims to add a fourth major automaker plant before the end of 2021 and to have capacity to produce one million vehicles a year by 2025.

Morocco and Portugal expand ties through 12 cooperative agreements in various fields including energy, civil service, health, culture, and triangular assistance. Once again, the maritime and port sector received top attention as well as tourism promotion and cooperation in the field of digital government and information technologies. Participants noted that Morocco’s access to Africa played an important role in several of the agreements as Portugal is keen to expand its limited footprint on the continent.

Currently, some 300 Portuguese companies have facilities in Morocco, while over 1,300 Portuguese companies are exporting to Morocco. In 2015, Portugal’s exports of goods and services to Morocco surged 18.5% to $766.9 million, while imports rose 12.2% to $211.1 million, according to data from the Portuguese Institute of Statistics.

Equitable growth and income distribution continue to challenge Morocco. While Morocco has had notable success in reducing poverty and some inequality, it must do more to maintain sustained growth and more equitably allocate government funding according to a study by the World Bank and the Higher Planning Commission (HCP).

The report, “Poverty and Shared Prosperity in Morocco in the Third Millennium, 2001 – 2014,” reviewed the country’s economic and social performance during the rapid economic growth of the past 15 years, which resulted in the fact that “This is the only country in the Maghreb that has experienced no decline in GDP over the past 15 years,” at an average rate of 3.2%. However, echoing previous studies released earlier this year, “The Moroccan economy is not growing fast enough and stable enough to join the group of emerging countries.”

Although Morocco’s GDP has the right balance among agriculture (13.3%), services (56.6%), and industry (29%), employment has not kept pace as agriculture accounts for 39% of jobs and industrial jobs have stagnated even though the value of the jobs has increased. “Accounting for 80% of Morocco’s GDP, the agriculture, construction, and services sectors continue to be the main drivers of the kingdom’s growth. Intensive in terms of workload, they do not contribute much to the creation of skilled jobs.”

“Despite an increase in the number of employed adults by 20.7% between 2000 and 2015, the employment rate decreased from 46% to 42.8% over the same period. This weakness comes from the inactivity of women. The employment rate for men is comparable to similar or more advanced income countries, but less than a quarter (22.9%) of women were employed in 2015, down from 24.5% in 2000.” Another troubling finding is that most government social and health services favor the middle and upper classes, due to poor governance and service outreach to rural and marginalized populations, challenges that are high priorities on the government’s agenda.

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