Fitch Ratings: Morocco Shows Resilience and Growth since Arab Spring – Jean AbiNader
* Leads in Investments and Economic Indicators in North Africa *
Jean R. AbiNader, MATIC
May 23, 2014
A new report from Fitch Ratings offers strong praise for the social and political stability Morocco has demonstrated “since the start of the Arab Spring in early 2011,” comparing it favorably with its neighbors, even the hopeful success story in Tunisia. The report notes:
“The smoother political transition in Morocco was aided by a tradition of political pluralism, the permanence of the monarchy (with King Mohammed VI seen as a reformer and legitimate among the population), and economic and social reforms started after the accession of the King to the throne in 1999. Stability in Morocco has supported growing tourist arrivals (which reached 10 million in 2013) and FDI inflows.”
The results confirm that Morocco has moved from a sedentary and often reactive economic player to one that is gaining a global reputation for business savvy. Since the accession of King Mohammed VI, there has been a country-wide campaign to build a stronger, more dynamic domestic economy capable of competing globally. To compensate for its status as the largest energy importer on the continent, Morocco is attracting international consortia to a host of renewable energy projects ranging from solar and wind to improved hydro and even nuclear options.
As the Fitch Ratings Report indicates:
“Ratings dynamics in Tunisia and Morocco will crucially depend on their ability to narrow twin deficits [budget and current accounts], rebuild policy buffers, implement reforms and accelerate growth. In Morocco, the Stable Outlook anticipates a gradual narrowing of the twin deficits, supported by continuing reforms.”
At the top of the economic reform agenda for Parliament is restructuring the compensation and pension systems, redrawing land management and ownership guidelines, and migrating to more efficient electronic processing of trade-related documents.
With the launch of Casablanca Finance City, expansion of the Tangier-Med Port, and investments in emerging urban and transit centers, Morocco is increasingly attractive for international investments due to its stability, reputable and functioning business infrastructure, and strong ties and good relations throughout the western half of Africa.
The latter was underscored by King Mohammed VI’s four-nation Africa tour earlier this year, where the Moroccan leader presided over the signing of more than 80 agreements across diverse sectors including agriculture, financial services, tourism, transportation, and trade and investment facilitation.
Domestically, Morocco continues to introduce and implement legislation that bodes well for its economic future. “Social and political stability has allowed the authorities to implement potentially difficult reforms, as illustrated by the gradual increase in subsidised energy prices,” comments the Fitch Report.
Morocco has energetically revived its reputation as a business crossroads for a market of one billion customers in Europe, the Middle East, and Africa. Investors and companies will be assured by the assessment of Fitch Ratings and others that Morocco is the place to be to do business throughout the region stretching along the Atlantic coast and into the interior of Africa.
Jean R. AbiNader is Executive Director of the Moroccan American Trade and Investment Center.