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Business Brief: Forbes Magazine Rates Morocco Best for Investments in Region; Good Economic News; Country Planning World-Class Construction Trade Show in the Spring; and IMF Calls for More Attention to Reforms – Jean R. AbiNader

Jean R. AbiNaderMATIC
December 22, 2017

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

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

Morocco ranked best in region in Forbes Best Countries for Business, coming in 55th among 153 countries in the study. The 15 criteria for the rankings are: property rights, innovation, taxes, technology, corruption, infrastructure, market size, political risk, quality of life, workforce, freedom (personal, trade and monetary), red tape, and investor protection, as reported in Yabiladi. According to the analysis, “Morocco has capitalized on its proximity to Europe and relatively low labor costs to work towards building a diverse, open, market-oriented economy..[it] has increased investment in its port, transportation, and industrial infrastructure to position itself as a center and broker for business throughout Africa.”

Details of Morocco’s achievements included how it has improved competitiveness, which is spurring continued growth, its low rate of inflation, and falling unemployment. The study also lauded Morocco’s many trade agreements, its reduction of subsidies, and subsequent improvements in its budget and current accounts. On the other hand, it also noted that despite “Morocco’s economic progress, the country suffers from high unemployment, poverty, and illiteracy, particularly in rural areas. Key economic challenges for Morocco include reforming the education system and the judiciary.”

In North Africa, Morocco ranks far ahead of Tunisia (96), Egypt (101), Algeria (124), and Libya (149). On the continent, it is only surpassed by Mauritius (41) and South Africa (48). Among Arab countries, Morocco is 6th, behind five members of the GCC countries (UAE, Qatar, Oman, Saudi Arabia, and Bahrain).

Data is drawn from key sources including the World Bank’s Doing Business, the Heritage Foundation’s Index of Economic Freedom, the World Economic World Forum’s annual Global Competitiveness Report, the Property Rights Alliance’s International Property Rights Index, and the UN’s Human Development Index.

IMF continues to nudge Morocco on structural reforms in the financial sector, in light of its improving financial situation due to the drop in energy costs. A recent mission in Rabat, according to Nasdaq, noted that “Executive Directors commended the authorities for the sound macroeconomic policies and reform implementation that have helped improve the resilience of the Moroccan economy, upgrade the fiscal and financial policy frameworks, and increase economic diversification.” The mission is working with authorities on strengthening moves towards a more flexible currency and policies need to help the economy “absorb external shocks [such as a raise in global energy costs] and remain competitive.”

Overall good news for the economy as the 2017 GDP is projected to rise by 4.1%,  mainly due to an improving agricultural sector. Despite severe drought in some areas, this is great progress over the 2016 figure of 1.2%, reflecting a three-fold increase in agricultural production. Despite the government’s goal of an annual 4.5% increase, the 2018 GDP is projected at 3.5%, below the level needed to support targeted job growth.

Look for an expanding construction sector as Morocco plans the second edition of The Big 5 Construct North Africa trade show , scheduled for April 2018 in Casablanca. Over 4,000 industry professionals are expected to attend including architects, engineers, contractors, and developers.

As the announcement noted, “Running from April 10 to 12, the second edition of the event will feature five exhibitions under one roof, thanks to the new dedicated product sectors. Almost 3,000 Moroccan construction professionals visited the launch event earlier this year, sourcing innovative construction products from over 170 exhibiting companies.” Organizers expect even more international firms to participate, offering innovative solutions and products for the construction industry in Morocco and the region.

Maroc Telecom garners award as Best African Operator at the annual Telecoms Review Excellence Awards 2017. It currently serves 56 million customers, including more than 50 million mobile phone users. The award was in recognition both for existing operations and the investments made to develop the sector such as the Trans-African terrestrial cable project spanning Morocco, Burkina Faso, Mauritania, and Mali. In the past 10 year, Maroc Telecom has invested some $7 billion in infrastructure and modernization, which is a strong guarantor of future revenues and growth.

Another major initiative is a subsea cable on the Atlantic coast to provide connectivity for countries that have limited or restricted access to communications technology. This project is another example of Morocco’s commitment to raise the economic development of Africa by implementing transnational projects.

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