Business Brief: Tourism Up; Gas Exploration Up; Agadir Port Growing. What else are Moroccans doing right? – Jean R. AbiNader
Jean R. AbiNader, MATIC
June 14, 2017
Morocco continues to see a rebound in tourism numbers this year, and expectations are that new markets in Asia will drive demand even further. Plans are unveiled for an expansion of Agadir Port, testifying to its growth from a regional fishing hub to a major tourism destination. Sound Energy looks to intensify its gas drilling operations and is optimistic. And finally, Morocco has a national budget, so now even more can get done to meet needs and grow the economy.
Rise in tourism bodes well for 2017. According to recently released government figures, Morocco is enjoying a much better year in terms of tourist arrivals. To date, some three million visitors have entered the country, with foreign tourism up 18% and expat Moroccan visits growing by 9.5%. Leading the way in this combined outcome of +14.7% were visitors from the US and Europe, particularly Spain, Germany, Belgium, and Italy. As importantly, the length of stay, measured in overnight occupancy, for non-resident tourists was up 34%, with Moroccan tourists spending 13% more time in the country. This, of course, only measures occupancy at listed accommodations such as hotels, resorts, and lodgings.
The main beneficiary cities are Tangier and Fez, where overnight stays increased more than 60% and 44%, respectively. Rabat was up 32%, while Casablanca and Marrakech posted respectable 24% increases. All of this is important as an indicator of the decreasing jitters among travelers about being in an Arab Muslim country, for which there have been travel cautions in the recent past. Overall, European tourist business is up by an average of more than 8%, while noticeable increases are coming from Russia, China, Japan, and South Korea as well.
Agadir rising. Another indicator of the growth of the value of tourism was the announcement of a $40 million project to construct a new multipurpose terminal in Agadir. According to numerous sources, the new terminal will be ready to go by 2019 and serve a number of vessels, bulk carriers, container shippers, cruise ships, and commercial vessels. It will have nine cranes of various capacities, as well as a cold-storage warehouse and distribution system.
Over the years, Agadir has grown from a regional fishing depot and tourism gateway to an important linchpin in Morocco’s national distribution and logistics infrastructure. With the increased demand in bulk cargo handling, it is more economical and efficient to move freight through Agadir than to have it trucked from Casablanca. Agadir’s marina is already attracting many foreign leisure vessels, with Europeans in particular finding it a favorite location for fall and winter docking.
Gas production moves a step closer. British exploration company Sound Energy has announced plans to continue drilling in its Sidi Moktar tract in central Morocco. Not only will be it re-entering its Koba-1 well to a deeper level, it will also have a similar effort at its Kamar-1 well. Key factors driving the projects’ renewal are the promising earlier test results, as well as their locations close to sufficient local infrastructure for transport and a nearby OCP phosphate plant looking for better energy supplies.
Parliament moves 2017 budget. One of the most important first actions of the new parliament was passing the long-delayed national budget. Now agencies can get down to business and resolve some of the bottlenecks delaying projects and frustrating contractors. Projecting a deficit of 3% of GDP, the budget continues efforts to strengthen public finances begun under the previous government. As a Nasdaq.com report noted, “Morocco has done more than most North African countries to make painful reforms required by international lenders to curb deficits, such as ending fuel subsidies and freezing public sector hiring. The government still controls wheat and cooking gas prices.”
Inflation is pegged at 1.7% with public investments expected at more than $6 billion and more than $19.5 billion allocated to state-run company investments. Public investments are targeting agricultural support at some $900 million, $370 million for the industrial sector, $1.2 billion for renewable energies, and $2 billion in port construction and rehabilitation. This robust budget offers multiple opportunities for foreign investors and companies seeking to enter or expand in Morocco.
Moroccan firm makes move to the big time. From time to time, we note how Moroccan entrepreneurs are gaining recognition and support internationally. The latest story comes from Silicon Valley, where the Moroccan B2B trading platform, WaystoCap, was well rewarded for its capacity that “allows African businesses to buy and sell products, allowing them to discover products, verify them, obtain financing and insurance, manage their shipments, and ensure payments security.” This was a result of being “a participant in the recently-concluded Y Combinator accelerator, on the back of which it has secured an undisclosed but sizeable funding round that include Y Combinator itself as well as Battery Ventures and other parties. It has also announced it is opening a satellite office in Cotonou, Benin.”
Having a satellite office in Benin makes sense to CEO Niama El Bassunie due to its strategic role as a central hub for West African trade. As importantly, the funds raised will allow WaystoCap to expand the sectors it covers and develop a new platform for more efficiently linking buyers and sellers.