Bombardier, the giant Canadian conglomerate, is well known by its sleek, high performance, low-cost aircraft. But in Morocco, it is much more. The company’s presence in Morocco dates to 2011, and since then it has become a major provider of transport services in the railway sector. It is now planning to triple its investments in Morocco, constructing a new plant for the headquarters of Bombardier Transport Maroc covering some 1.5 million square feet, at a cost of more than $71 million, and creating some 2000 jobs. Production is expected by 2020.
To be sited in the Kenitra free zone, about 500,000 square feet will be allocated to its supply chain companies, 15 of which have already expressed their intentions to invest in Morocco. As like other major manufacturers such as Boeing, Bombardier’s goal is to attract 50 of its suppliers to relocate to Morocco to support its ambitious goals across the continent of Africa and in Europe.
Its current focus is the modernization of the signaling system for the existing rail system, although it will bid on other projects as well, including urban trams and the extension of the high speed rail, which will see its first section open in 2018.
As described by Taoufiq Boussaid, the president of the Moroccan subsidiary of Bombardier, “The ecosystem created in Morocco will allow to be a bridgehead to go to African markets of TGV, regional trains, and trams that will be made in Morocco.”
The project to upgrade the entire 223 mile Casablanca to Tangier-Med line is part of the Moroccan railway authority’s (ONCF) strategy to increase capacity and speed on Morocco’s central passenger and freight rail corridor, promoting infrastructure development and economic growth along its routes.
Conference on efforts to boost the private sector. With the lowest rate of entrepreneurship in the MENA region, Morocco is seeking to develop programs to enable and strengthen its private sector. The Central Bank (Bank al-Maghrib), in cooperation with the European Investment Bank (EIB) and CGEM, the General Confederation of Enterprises, is holding a high-level conference to “examine the development of the private sector and investment in Morocco,” according to the press statement released by the EIB.
The key focus of the conference is to detail steps that are needed to create “an enabling environment for private sector development and investment essential for inclusive economic growth and economic resilience.” This requires “a detailed understanding of the drivers of investment decisions.”
Morocco already enjoys political stability and is working on ensuring rule of law and regulatory clarity and fairness. Other key factors are access to finance, reliable power and infrastructure, and the availability of a skilled workforce. The conference will benefit from a recent survey jointly conducted by the EIB, the World Bank Group, and the European Bank for Reconstruction and Development with businesses in North Africa and the Middle East.
A vibrant private sector is key to boosting jobs, growth, and economic resilience. However, its ability to succeed is very much influenced by government policies, the banking system, the role of innovation and entrepreneurship, and agreements that support strong export growth.
The press release noted that “Stimulating economic growth and resistance to economic shocks in Morocco involves modernizing economic and social infrastructure and improving the relationship between business and the financial sector.” This will be one of the main topics of the conference and the role of the EIB in supporting projects that contribute to job creation, sustainable growth, vital infrastructure, and social cohesion.
Morocco’s banking penetration rate reached 71% by mid-year, according to the central bank.
An article in Morocco World News provided the latest available statistics, which showed a 2% increase since the beginning of the year. Growth was also recorded in number of ATMs and bank density, the number of clients per counter.
“Bank Al-Maghrib also pointed out that the Moroccan banking system is composed of 83 institutions including 19 banks, six offshore banks, 33 finance companies, 13 microcredit associations, and 10 intermediary companies in the field of funds transfer.”
Banks majority-owned by Moroccan private capital dominate the sector with 53.4% of counters, 67.6% of assets, 67% of deposits, and 65% of loans. Liquidity is a major factor in deposit accounts as accounts payable (checking) at 61.2%, followed by term deposits at 18% and savings accounts at 17%. Loans have a broad dispersal, long-term loan representing 35.4% of the total held by banks, medium-term at 25.4%, and short-term loans accounting for 31.7%.
The overall balance sheet for the central bank was positive, with a total balance sheet $140 million, up 10.6%, cumulative customer deposits of $92 billion, a 4.3% rise, resulting in a net banking income of $2.8 billion, and a net profit of $700 million. The loan delinquency rate decreased by some 7.5%.
As the banking sector continues it steady and well-managed expansion, it builds its capabilities to service domestic and international clients that require support for projects at home and abroad, a very positive sign for the country.