A topsy-turvy economic year ends on positive notes for Morocco, as tourism numbers rebound, positive budget news comes on the back of a projected higher growth rate for 2017, Morocco expands its role in promoting Arab and African trade, and Islamic banking is ready to launch.
Passenger and tourism numbers up. According to Abderrafie Zouitene, director of the Moroccan National Tourism Office, annual revenues hit more than $6 billion by the end November 2016. He noted that the rise comes on the heels of a slowdown in the first five months of 2016 and was welcome news in all destinations, from Agadir to Tangier. Part of the increase is due to new visa policies for Chinese visitors, who, since June 2016, do not require tourism visas.
Citing several examples of this year’s growth, Director Zouitene said that tourism from China is up more than 600% under the new policy, while the Russian tourism flow is up more than 300% in Agadir alone. China and Russia are being targeted by Morocco, and UAE’s Etihad Airways has announced new flights for Chinese travelers through Dubai to attract 100,000 visitors annually by 2018. As reported previously, as part of the King’s visit to Russia this past year, 41 Russian journalists visited key tourist attractions in Morocco to promote the country’s many attractions to the Russian public.
In related good news, according to the National Airports Authority (ONDA), there were close to 17 million domestic and international passengers in Morocco in the first 11 months of 2016. The busiest airport, with almost 8 million passengers, was Mohammed V International in Casablanca, equal to 47% of all traffic. The pre-winter travel was especially noticeable, with a total of more than 13,000 flights in November – a 49% increase in Casablanca traffic, 21% in Marrakech, and 7% in Agadir.
This growth, and the impact of a good rainfall this season, has led the central bank to project a 4.2% growth rate in 2017, which is great news considering that the rate in 2016 was only 1.2% due to poor agricultural results from scant rainfall. This positive projection has enabled the central bank to keep its benchmark interest rate unchanged at 2.25 percent, and inflations is expected to remain around 1.6 percent in 2016 and fall to 1 percent in 2017. Overall, the budget deficit is expected to narrow to 3.5% to close out 2016 if the government can stay on target with its fiscal reforms, with a fall to 3.1% in 2017.
The push for greater regional trade. Morocco World News carried an article about the selection of Maroc Export to organize and host the 2017 Arab and African Businesswomen Forum, which provides a platform for attendees to share perspectives and highlight the trade and business in their countries. This was not the only designation Maroc Export garnered at the annual meeting of the Arab League’s business development division. It was also named “Project Leader” for the Arab Training Institute for Arab Market Experts, which will be launched in 2017 and headquartered in Morocco; and will host the ninth board of directors of the Arab Union for Industrial Exports Promotion. A founding member of the Arab Network for Trade Promotion Organizations, Maroc Export is generally recognized as a leader in efforts to diversify Morocco’s export profile.
Argan oil a hit for British entrepreneur. Darren Smith, an attorney in Manchester, sold his finance business to start selling a range of argan beauty products, now growing from an online business to stores in multiple UK locations. . His company, Simply Argan, was born out of a visit that he and his wife Jane made to Morocco where they experienced the benefits of argan oil, the “liquid gold” famous for its moisturizing, anti-ageing, and skin toning qualities, among other things. They brought some back home for friends, whose desire for more products gave him the impetus to sell his business and switch careers. He says that the response from customers has made the hard work of building a start-up from scratch worthwhile. In just a few years, the online store “has sold hundreds of thousands of products which include face masks, night rejuvenating oils, coffee scrubs, shampoos, conditioners, shaving and beard oils.”
Let the sun shine. The Euro Mediterranean Forum of Institutes of Economic Sciences (FEMISE) issued a report at COP22 that has significant implications for investors in renewable energy. It projects that renewable energy ventures can generate between 270,000 and 500,000 jobs by 2040: “Interest and investment in renewable energy business is growing in an impressive manner. Such growth does not only create more jobs, but also creates self-sufficient and independent local communities.”
The report’s preliminary findings were presented at COP22 in Marrakech on November 15th, 2016. The final copy reflects on a number of issues, including the risk of population displacement due to rising sea levels, the unexploited potential and resources in the Southern Mediterranean, new economic and social realities following the Arab Spring and, most importantly, opportunities for green energy in the Mediterranean.
Islamic banking set to go. The Central Bank has approved requests from Moroccan and French banks to launch Islamic products in 2017. Since the Moroccan banks lacked experience with Islamic finance, they have joined forces with existing companies that have demonstrated expertise in the sector. Attijariwafa Bank, which is in discussions with the Islamic Development Bank as its partner; BMCE of Africa, partnering with the Guidance Financial Group; and Banque Centrale Populaire (BCP), working with Al Baraka Banking Group are the main banks that received approval, along with two smaller lenders, Credit Agricole (CAM), tied to Qatar International Islamic Bank, and Credit Immobilier et Hotelier (CIH), which will create a subsidiary with the Islamic Corporation for the Development of the Private Sector.
Morocco’s BCP has chosen Guidance Financial Group, BMCE has picked Bahrain-based Al Baraka Banking Group, while CIH is partnering with Qatar International Islamic Bank. Subsidiaries of French banks Societe Generale, Credit du Maroc, and BMCI also gained permission to sell Islamic products. It is anticipated that Morocco will issue its first ever Islamic bond (sukuk) in the domestic market in the first half of 2017. Parliament has yet to approve a bill regarding Islamic insurance, or takaful.