Although 2016 was not a bad year for Morocco, key indicators look like 2017 will show significant growth in important sectors including agricultural, financial services, manufacturing, and tourism. Although the government agency responsible for tourism development has come under criticism, private leisure and recreation developers and promoters continue to post good results. Bilateral ties with Pakistan are showing improvement, and so is Morocco’s overall profile to international investors.
African Business Magazine gives Morocco a thumbs-up. In a recent overview of business prospects in North Africa, the magazine gives Morocco high marks for its outreach to sub-Saharan Africa via economic diplomacy. The article describes Morocco’s special status: “Morocco is the big exception [to the lack of North-South investments in Africa], banking on growth across the entire continent to help fuel its own development. Rabat calculates that 85% of Morocco’s foreign direct investment goes to sub-Saharan Africa, with Senegal, Côte d’Ivoire and Gabon the top three destinations.”
It goes on to say that “If anything, Morocco is likely to become more prominent as an entrepôt for African investment over the next few years. Tanger Med, one of the African continent’s most important container ports, already serves as a transshipment port for trade between Europe, Asia and North America but is likely to become increasingly valued as a dropping off point for cargo bound to and from West Africa’s modernising ports over the next few years.”
Of particular significance is Morocco’s activity in the banking sector, where Attijariwafa and Banque Centrale Populaire have taken leadership roles in investing in the local banking sector. The opening of Islamic finance in Morocco presents other opportunities to attract investors and consumers in Central and West Africa, where the sector is underserved. The Gulf partners of the Moroccan banks in the Islamic ventures name Morocco’s reach into largely untapped African markets as a strong incentive for the tie-ups.
Of course, Morocco is fast becoming a model for renewable energy development in Africa. African Business Magazine noted that “Morocco and South Africa have been the two biggest investors in the CSP sector in the world over the past two years and appear to be driving each other on in competition to develop CSP technology that can be exported to many different markets. Companies from the two countries are competing for influence in a growing number of sectors.”
Morocco’s economic strategy, led by King Mohammed VI, reflects the reality that growth opportunities in Africa are immensely attractive as EU markets have slowed. As one analyst mentioned in the article put it, “Morocco has banked its economic strategy on trade with the European Union but the EU is stagnating. African growth prospects over the next ten or 20 years are much bigger and so the government wants to add a second string to its bow: looking north to Europe and south to Africa at the same time. It’s a no brainer.” And while the magazine did look at Tunisia’s and Egypt’s interest in pursuing business in Africa, the article concluded that they had much to learn from Morocco’s leadership in building ties with the continent.
Tourism Agency faulted for passive promotional efforts. According to multiple sources, despite the uptick in tourism in Morocco in 2016, little of the progress is due to the efforts of the agency responsible for tourism development, SMIT. While the Ministry of Tourism is responsible for promotional efforts, SMIT is tasked with overseeing the implementation of the government’s role in building, sustaining, and incentivizing private sector participation in the industry.
The chief criticism from the Court of Auditors is that SMIT has an outdated business model, relying more on selling real estate than innovative and creative leadership in providing for-pay consulting and engineering services in the tourism sector. The Auditors said that “The SMIT should develop a genuine and marketable tourism engineering and consulting trade, since it is the only way to allow it an independent survival from the land sales and State subsidies.”
It also noted that SMIT has the personnel in place to implement these types of services but was not aggressive in reaching out, relying instead of government support. In addition, it recommended that the agency work more proactively to solicit investors for the tourism sector, as it has the expertise and the strategic mandate to take the lead in this effort on behalf of the government.
Islamic finance leaders to converge on Morocco. More than 250 financial institutions, analysts, company and Islamic advisory council leaders, and experts will join together in July for a conference in Marrakech. The theme of the 2017 Edition of the Islamic Business Forum Network Series is “The potential of an Islamic Economy for Entrepreneurs and Business in Africa.”
The importance of Islamic finance on the continent is critical to generating new pathways for investment and support for entrepreneurs. Under Islamic financial principles, risk and profit sharing are keys to relationships between lenders and recipients, because they entrepreneurs to attract investors through equity participation.
The convener, Imam AbdulRasheed Abubakar, the President of the African Islamic Economic Policy Foundation (AFRIEPF) said, “It’ll also focus on Islamic banking and finance, halal travel, tourism and lifestyle space, halal food and digital Islamic services. It’s going be a platform to assess the potential and challenges of Islamic economy and its development in Africa.”
Morocco builds stronger ties to Ghana, Pakistan. As an outcome of King Mohammed VI’s visit to Ghana, there was a MOU signed to harmonize trade on the stock exchanges of the two countries. In addition to giving investors in both countries access to each others’ markets, it also enable traders to have full, transparent dealings in either country. Tying together the Casablanca Stock Exchange (CSE) with other exchanges on the continent has been a consistent feature of the king’s visits. By linking markets and opening cross-border investments in equities, both countries will benefit from increased participation of investors.
Karim Hajji, the head of CSE, mentioned during a visit to Ghana that “You need also to harmonize listing rules among markets to facilitate listing. That is why we are here to sign an agreement with the Ghana Securities and Exchange Commission to harmonize listing rules and other relevant procedures.” From the Ghanian side, Kofi Yamoah, Managing Director added that “We should be able to have dealers across the various jurisdictions having access to all the securities that are listed in the entire West African Market and vice versa.” According to him, this will facilitate the easy access to various securities for investors across the region.
Pakistan was also a source of good business news for Morocco. According to the State Bank of Pakistan, exports to Morocco rose 81% in the third quarter of 2016 compared to 2015. Importantly, this represented the highest growth in exports to any country while Pakistan’s overall exports are declining. Pakistan has been aggressive in promoting its products in Morocco. In fact, Nadir Chaudhri, Pakistan’s Ambassador to Morocco said in a briefing, “Our mission has gone to every corner of Morocco for highlighting our products by holding trade and business road shows in every major city and I regularly meet and brief all the chambers of commerce and top importers and business leaders.” He mentioned that Morocco is a valued destination both for its domestic markets and as a platform for doing business in Africa.
In addition, the Moroccan Ambassador to Pakistan is working hard to make sure that this is not a one-way street. Ambassador Mohmed Karmoune recently visited the national trade office of Pakistan to meet with its newly elected officials and to strengthen plans for bilateral trade visits.
Ambassador Karmoune noted recent the increases in bilateral trade and encouraged the role of commercial delegations in mutual promotion efforts. Pakistan will host several trade festivals in key cities in Morocco in 2017 covering a range of products, and reciprocal visits are in the works by Moroccan companies and agencies.