Business Brief: Morocco Nears Major Human Development Goal; Builds Stronger Ties with UAE, Côte d’Ivoire, and Ethiopia; Enjoys Better Tourism Numbers; and Sees Launch of Solar-Powered Cooking Project, among Other News – Jean R. AbiNader
Jean R. AbiNader, MATIC
August 3, 2017
Morocco’s investments in providing drinking water to all its citizens are paying dividends. Several African and Arab countries are highlighting their ties to Morocco, while tourism opens opportunities in the real estate sector. Several Islamic banking instruments have come on line in the financial sector, and several companies up their presence in the Kingdom.
Drinking water for all. The latest report from Charafat Afilal, the Secretary of State in charge of Water, says that access to drinking water in rural areas will reach 96.5% by the end of this year, reflecting the success of the more than $100,000 spent annually on development projects, including developing potable water from reservoirs created by dams, the installation of regional drainage canals, better management of surface water resources, deepening wells, and public education campaigns on water use. The goal is to end the existing water deficit by 2019.
Islamic finance debuts. This past week, “halal” credits and accounts became available through banks in Morocco following approval of Parliament and under the guidance of the Higher Council of Ulemas. Five Moroccan banks are authorized to open accounts according to Islamic finance principles. This will soon be followed by the availability of real estate and automobile financing. Further ahead are insurance products and Islamic financing bonds, sukuk, to support financing these and other products. According to the Council’s decree, “This ‘participatory’ finance [in which risk is shared by the parties to the transaction] prohibits investments in sectors considered illicit: alcohol, sports betting, tobacco, and pornography, as well as the practice of interest and speculation.” Standard & Poor’s believes that Islamic Finance could come to represent between 10 and 20% of the Moroccan banking system.
Where tourism goes, hospitality and real estate follow! The rise in 4Q tourism results has greatly improved the sector’s 2017 performance. The upcoming conference of Hotelier Summit Africa (North) “Will serve as an important event for real estate and hospitality professionals looking to build and operate new hotels across the country,” according to the organizers. They also point to “an overall international trust in the Morocco as a holiday destination” that has led to several new facilities being launched in the country, with expectations for even greater growth. Their press announcement noted that “The tourism sector in Morocco experienced significant growth at the beginning of this year. According to the data from Moroccan Ministry of Tourism, the number of visitors that entered the country in February went up 10.6 per cent with overnight stays in hotels increasing to 18.8 per cent.”
Friends in deed. Morocco’s commitment to its African policy is underscored with an investment of more than $350 million in various projects in the Côte d’Ivoire. This announcement was made by Mounia Boucetta, the Moroccan Secretary of State for Foreign Affairs and International Cooperation, at the meeting of a bilateral trade council in Abidjan. “Côte d’Ivoire and Morocco have about 100 bilateral agreements, several of which relate to physical projects in progress, particularly those of housing.”
Ethiopia lauds cooperation with Morocco as it moves ahead with bilateral trade and investment opportunities following Morocco’s admission to the African Union. The two countries have 12 current agreements across numerous sectors, including education and human resources, renewable energy, environmental cooperation, health, agriculture, and infrastructure. One of the largest projects is a fertilizer production unit in Ethiopia to develop products especially suited for Ethiopian agriculture. The first phase will require $2.5 billion, with a total cost of $3.7 billion.
The UAE’s Abu Dhabi Fund for Development has provided the Kingdom with grants and concessionary loans worth $2.45 billion in support of 76 development projects, including transportation infrastructure, water and agriculture, education, and healthcare. The Fund also has equity in several Morocco-based companies, active in the telecommunications, real estate, agriculture and livestock, tourism, and industry sectors.
Speaking of the Emirates, the World Economic Forum’s Digital Evolution Index placed Morocco as #1 in digital economy in North Africa, following the UAE, Saudi Arabia, and Jordan among all Arab countries. The Index is a holistic, data-driven evaluation that tracks the progress of the digital economy across 60 countries, taking into account more than 100 different indicators across four key drivers: Supply Conditions, Demand Conditions, Institutional Environment, and Innovation and Change. It reflects the state and rate of digital evolution, while also identifying avenues for investment, innovation, and policy priorities.
2017 exports up. YonY comparison shows that Moroccan exports increased from $12 billion in the first six months of 2016 to $13.3 billion in the first six months of 2017. By sectors, this 11.2% increase breaks down into phosphates and derivatives (+8.9%), agriculture and agri-food (+8.3%), pharmaceuticals (+7.5%), electronics (+7.1%), automotive (2.9%), and textiles and leather (+1.6%). In related news, Automotive News noted that if Morocco adds, as expected, two other major car manufacturers by 2025, it will reach its goal of a 1 million car production capability. According to the story, “Morocco is encouraging its next vehicle manufacturer to produce a platform that allows it to manufacture both electrified vehicles and conventional models.”
Finally, lights, camera, action! And in a long-awaited move, Morocco has finally announced a draft decree establishing a subsidy for foreign film productions shot in Morocco, with the aim of tripling their number. This tax measure will allow production companies to recover 20% of their expenses incurred during the shooting of a film or a series in Morocco.
It’s not just power projects any more. Morocco, according to HuffPost Maroc, is working with Greenpeace to teach people to cook using solar energy. A small group of volunteers, committed to introducing environmentally friendly small-scale technologies, is training Moroccans in rural areas and small communities in solar cooking as part of the Do It Yourself program, DIY Solar Cooking.