Business Brief: Morocco’s Numbers Trending in the Right Direction; Tanger-Med Ports Wins International Recognition – Again; OCP Expands Overseas Operations, And More Good News – Jean R. AbiNader
Jean R. AbiNader, MATIC
October 26, 2016
Morocco continues to show growth potential despite lingering weak domestic and regional indicators. Tanger-Med shows why it’s best-in-class among regional ports, while Moroccan firms build on King Mohammed VI’s historic visit to East African countries, making a bank acquisition and signing agreements for social housing. On the agricultural front, new technologies will help grow innovative farming in Morocco, and OCP starts up new ventures in Africa and India. With so much positive activity going on, prospects for Morocco’s growth are brightening.
Mostly Good Growth Numbers: The World Bank is saying that Morocco’s growth numbers are improving, moving past a bad harvest earlier this year. Expanding automotive and banking sectors are providing strong results, which leads the IMF to project a 4% growth in the medium term, much better than the current 1.5%. If the new Moroccan government can continue with its reform agenda and reduce wealth and investment inequalities so that more people and regions share growth benefits, it will enhance Morocco’s potential for a good year.
In another report, the World Bank addressed the rate of poverty in Morocco and pointed to some strong successes, although much still needs to be done. The overall poverty rate has declined over the past 15 years from 8.9% of the country’s 34.4 million people to 4.2% in 2014, in line with Morocco’s Millennium Development Goal target of halving the poverty rate. The uneven growth in the agricultural sector has left nearly 19% of rural populations living in or close to the poverty line.
Unemployment continues to be a nettlesome problem. Though the kingdom has brought down the overall rate to 9%, the rate for urban youth is at 38.8%. Without adopting pending labor reforms, it will be difficult for the economy to reach its 3.9% unemployment rate target by 2025.
Tanger-Med #1 Again: For the second year in a row in the Financial Times rating of international port facilities, Tanger-Med won both the Africa regional crown and the sub-regional title for North Africa. Its industrial zones serve hundreds of international companies, particularly in the automotive and aeronautics sectors and supply chains. Situated near the Strait of Gibraltar, it is well located on key shipping routes into Europe and across Africa. There are special incentives for many sectors to locate here, with an emphasis on manufacturing and renewables, as well as textiles.
Morocco Grows Presence in East Africa: As King Mohammed VI turns on the charm offensive in Rwanda, Tanzania, and Ethiopia, he knows that it will take more than friendship to return to the AU, so economic diplomacy is a key part of his strategy. Attijariwafa Bank announced its intention to acquire Cogebanque of Rwanda, the third largest bank in the country by assets. The deal to buy a 75% stake in the bank was announced by Attijariwafa CEO Mohammed Kettani. It is estimated that the deal was worth around $41 million. Attijariwafa already has subsidiaries in Tunisia, Ivory Coast, Senegal, and Mali, among other African countries, as well as branches in Europe and China.
Another announcement during the state visit was the proposed construction of 5000 social housing units in Rwanda through a joint venture between the Development Bank of Rwanda and Palmeraie Development Group that will get underway early next year. The site for 2000 initial units has been agreed, and the project will take 18 months to complete. The focus will be on apartment buildings, as the demand in Rwanda is for around 100,000 units annually, which requires denser construction options. The two partners will invest about $20 million, with the rest to be financed by the Bank of Africa.
Advances in Agriculture as OCP’s Overseas Footprint Grows: OCP’s Entrepreneurship Network in partnership with Enactus Morocco has launched an agricultural accelerator program to support innovative agricultural technologies from young entrepreneurs to solve some of the country’s environmental challenges.
Two of the recently funded projects are Amendy Foods and Hydrobarley. Amendy Foods works with high-nutritional value agricultural products, such as quinoa, to accomplish two goals: improving the quality and availability of higher nutrition foods into the Moroccan diet, and providing a viable economic opportunity to generate considerable revenue. The company has already identified its pilot project in the Chichawa area and is working with farmers and communities on the adoption of quinoa in their diets and as cash crops.
Hydrobarley focuses on the environmental and socially responsible production of animal feed. Using hydroponics, which requires much less water and space for producing fodder crops, the company introduces local farmers to options that both promote crop diversity and generate new sources of income.
OCP has extended its reach to India, according to a report in Morocco World News. It has initialed a joint venture to produce up to 1.2 million tons of nitrogen-phosphorus-potassium (NPK) fertilizer annually. “OCP has always been, and remains fully committed to contribute to India’s agricultural development,” OCP Chairman Mostafa Terrab said in a statement announcing the venture. “As one of the major cooperatives in India, Kribhco is an excellent partner to develop a farmer-oriented agricultural input joint-venture. This partnership is designed to be truly a win-win project for all the stakeholders involved but foremost for India’s agriculture and particularly for Indian farmers.”
This summer, OCP also announced plans to open a fertilizer plant in Nigeria; details are forthcoming.
Bombardier Increases Presence in Morocco: In a move similar to Boeing’s push to bring its supply chain to Morocco, Bombardier has announced plans to make Morocco its hub for its railroad equipment business in Africa and some European markets. This collaboration with leading industrial suppliers will enable Bombardier to respond quickly to customer needs. The expansion, according to Taoufiq Boussaid, President of Bombardier Transportation Morocco, includes a 40,000-square meter facility that will house an engineering center in Casablanca and create 600 direct jobs.
Bombardier Transportation is a rail equipment division of the Canadian giant Bombardier, a world-leading manufacturer of planes and trains. In August, its aerospace division announced a decision to move a portion of its operations from Northern Ireland to Morocco.