Business Brief: Good News on Morocco’s African Outreach – Jean R. AbiNader

Jean R. AbiNader, MATIC
April 7, 2017

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

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

Morocco’s leadership in Africa was a dominant news item in recent weeks following King Mohammed VI’s visits to various African countries and the signing of additional bilateral agreements and MOUs. Coverage included the need for greater South-South integration as promoted by the King, updates on the Nigeria-Morocco fertilizer deal, and Morocco’s ranking in the most recent Africa Capacity Report.

What’s Not to Like? African Business Magazine has contracted Morocco fever! A recent article encourages readers to think beyond sub-Saharan Africa when assessing Africa’s potential. It points to Morocco’s economic diplomacy as “redefining the continent’s North–South relations.” Referencing Morocco’s joining the African Union in January and King Mohammed VI’s recent visit to Ghana, it notes that his activities are benefiting many countries. From the MOUs “on deepening economic ties, it has become a familiar routine for the monarch, who has toured much of the continent in the past year promoting the merits of partnership with the kingdom. Other countries visited include Rwanda, Nigeria, Zambia, and Ethiopia.”

It goes on to praise Morocco’s strategy as more than “a break from a historical focus on Europe. Moroccan companies, especially banks, have been investing south of the Sahara for years. Today, an estimated 85% of the country’s foreign direct investment is in the region. The country is also driving Africa’s sustainability agenda, positioning itself as the leader in promoting green investment and development. It is building the world’s largest solar power plant, the Ouarzazate Solar Power Station, or Noor.”

Echoing the King’s theme, “The disconnect between North and sub-Saharan Africa is nonsensical, undermining regional integration efforts and costing Africa in lost investment and trading opportunities. Not to mention its corrosive effect on any claims to pan-Africanism.” The article notes that Morocco’s strategy is probably “part of a long-term vision” to encourage greater trade between North and South, as “Morocco is arguably also well positioned as a regional and continental hub for trade and investment to and from Europe. The potential for North African commercial centres like Casablanca and Cairo to perform such a role is virtually unexplored, for no good reason.”

It’s clear that there is strong agreement in Morocco with this position.

Fitch Group Names Morocco as Regional Manufacturing Hub. Morocco World News covered a study prepared by BMI Research and incorporated into an assessment by Fitch Group, which demonstrates Morocco’s growth as a manufacturing center. In fact, the BMI study predicted that Morocco’s GDP growth will outperform the region in the coming years. It says that “Morocco will remain favoured by international investors over the coming years, benefitting from positive reforms to the business environment and policy continuity. This will support the country’s ambitions to become a manufacturing and exporting hub between Europe and Africa, which will in turn result in GDP growth outperforming the rest of the MENA region.”

The BMI report goes on to note the long term benefits of the strategy that accrue due to the steps that the country is taking in terms of business incentives, skills training, and political stability. Becoming the “area’s primary hub for manufacturing and export between Europe and Africa, [has] turned it into the investment darling of the MENA region. Researchers are expecting this trend to continue indefinitely.”

The report cites the World Bank’s Ease of Doing Business Index, in which Morocco has climbed from 129th to 68th in less than 10 years, and the adoption of Morocco’s new Investment Charter, adopted in 2016, as factors “expected to support the continuation of this upward trend over the coming years.” “Investors are responding positively to improvements Morocco has made to its business environment, including online platforms for the registration of businesses and properties. These reforms and Morocco’s status as the most politically stable country in the region bode well for the future investing,” BMI’s research noted.

In conclusion, the BMI report points to the underlying stability of the country as a key factor. “We believe that Morocco’s relative political stability compared with the rest of the region will continue to support policy continuity and investment-friendly reforms over the coming years.” And the Fitch Group commented, “Over the coming years, Morocco’s GDP growth is predicted to be faster-than-average keeping it well on track to become the region’s primary hub for manufacturing and export.”

Nigeria-Morocco Fertilizer Deal on Track. In addition to the Atlantic gas pipeline project, Morocco and Nigeria signed a MOU for the supply of phosphates from Morocco to support the development of an industry devoted to crop-specific fertilizer in Nigeria. As detailed in an article in Nigeria newspaper The Guardian, shipments of phosphates have already begun and are expected to yield 1.3M tons of fertilizer, adapted to the soil and crop conditions in the country. As the article points out, “Access to fertiliser, which is added to soil to supply one or more plant nutrients essential to the growth of plants, has remained a big issue for farmers, especially for the rural farmers who are unable to buy the product at exorbitant cost.”

Group Managing Director (GMD) of Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Kacalla Baru, noted that “The Moroccans have already supplied a cargo of phosphate which has been delivered to various blending plants across the country. Already, eleven blending plants have come into production because of the supply. I am happy to inform you that this development has translated to the creation of about 50, 000 jobs and led to the production of about 1.3 million tonnes of fertiliser in the country.”

Africa Capacity Report Highlights Morocco. According to the 2016 Africa Capacity Report (ACR), Morocco “is the leader in the area of Science, Technology, and Innovation (STI).” An article in the Ghana Business News provided details on the report released by the African Capacity Building Foundation, which surveyed 44 countries on the continent to determine how their development agendas measured up against their capacity for development in key indicators. Morocco was one of the “high” performers with a score of 71.6 out of 100, the leader in North Africa. The 224-page report measures four critical categories supporting global innovation: the policy environment, development results at the country level, capacity for development outcomes, and processes for implementation. Morocco’s results provide a measure of satisfaction as well as the basis for continued progress.

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