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Maghreb Business Highlights: AMU Refocuses on Trans-Maghreb Railway; Morocco Looks to Build Fisheries Sector, Signs Compact on Ocean and Climate Change; Tunisia Faces Economic Challenges after Successful Trade and Investment Meetings in France; and Morocco Forges Strong Ties with World Bank – Jean R. AbiNader

Jean R. AbiNader
February 26, 2019

Jean R. AbiNader, Moroccan American Center

For decades, regional observers and officials have called for greater economic integration among the Arab Maghreb Union (AMU) countries, Algeria, Libya, Mauritania, Morocco, and Tunisia, but projects have seldom proceeded beyond discussions and statements. Now The Arab Weekly reports that the African Development Bank has offered the AMU head office in Tunis a grant to modernize an integrated railway network plan tying together Morocco, Algeria, and Tunisia.

“The idea of a railway linking Tunisia, Algeria, and Morocco is very old,” said Yacine Bendjaballah, CEO of the National Company for Rail Transport. “Transport officials from the AMU have discussed it many times when they’ve met.” There will be a meeting of regional railway officials in Tunis in March to discuss details for modernizing and expanding some 1500 miles of track by 2060. It is estimated that the plan will cost around $4 billion over 40 years. Projected service in both goods and passengers will benefit the region by providing more efficient and economical transportation as well as direct and indirect jobs servicing the railway.

Whether or not the project will come to fruition depends on the AMU finding agreement among the principles, despite the continuing stalemate between Morocco and Algeria over the Western Sahara. According to World Bank projections, economic integration among the three countries costs the region 2% of annual growth.

With the European Fisheries Agreement in its pocket, the Moroccan government is moving to strengthen the country’s fisheries sector. Its latest move is forging an agreement with Australia, which is a leader in the industry. Moroccan Agriculture and Fisheries Minister Aziz Akhannouch recently met with Agriculture Minister of the State of Victoria Jaclyn Symes to discuss how the countries can collaborate.

“Australia has adopted an approach based on a vision that focuses mainly on product quality and biosafety and these are aspects that are of particular interest to Morocco,” Akhannouch said at a news conference. He added that Australia and Morocco were interested in developing partnerships in the sector.

Industry experts said Morocco could become a maritime fishing capital because of its great marine wealth and huge renewable resources. Marine products account for half of the country’s food exports.

The sector is part of Morocco’s multifaceted national strategy and contributes on many levels, from food security to employment, and economic diversification. Currently, close to 200,000 people are employed in various segments of the industry, contributing some 2% of the country’s GDP. An article in The Arab Weekly pointed out that Morocco ranks 13th globally in terms of marine fish production and is the leading producer in Africa and the Arab world. This has been achieved despite the fact that “Only a small minority of fishermen can take advantage of fishing on the high seas.”

To strengthen its global credentials regarding sustainable development of the oceans, Morocco has signed the Brussels Declaration on the Ocean and Climate Change, which reaffirms the outcomes of the 2030 Agenda for Sustainable Development and the related UN Ocean Conference, as well as the “Because the Ocean Declaration,” according to an article The North Africa Post. “The Brussels Declaration recognizes the importance of cooperative ocean, climate, and biodiversity related actions, both at regional and multilateral level, in fora and conventions…”

This step is in line with Morocco’s leadership on climate change issues, highlighted by its hosting of COP22. More recently, the Climate Change Performance Index for 2019 ranked Morocco as the second-best performing country following Sweden, which topped the ranking.

Tunisia’s economy will likely get a boost from its recent agreements with Paris, although it remains to be seen if these will help Prime Minister Youssef Chahed in his ongoing efforts to influence the political party space in Tunisia. He was accompanied by a number of ministers and government officials and gave a speech on youth empowerment and democracy at the Arab World Institute. As with other countries in Africa, nearly 60% of Tunisians are under the age of 35 and have a 38% unemployment rate.

Given the recent news that Nissan has agreed to join Renault in assembling cars in Algeria, the Prime Minister is eager to show that Tunisia can also develop a strong manufacturing base although it has a small domestic market. And it is struggling to adopt the necessary reforms to move aggressively to expand its economy. France has a key role to play as it is Tunisia’s trade partner, with more than $7.5 billion in two way trade that currently favors Tunisia!

More than 3000 European companies of all sizes are located in Tunisia, which boasts a skilled workforce, well-developed coastal infrastructure, and access to the EU. Security concerns have abated and the country hosted some 8 million tourists in 2018.

The World Bank and Morocco expanded their partnership, as the Bank’s board approved a $700-million loan to promote financial inclusion and transformation to a digital economy in Morocco, according to a statement from the Bank. Called the Development Policy Financing program, it aims to “diversify financial instruments through the expansion of the regulatory and institutional framework for microfinance, agricultural finance, insurance coverage for entrepreneurs, and Islamic finance products, as well as better monitoring of gender gaps.” In addition, it will also “support reforms needed to develop digital platforms like mobile payment systems, e-commerce platforms with a focus on financial market infrastructure, and mobile payments.”

Morocco World News also carried an article on the new Country Framework Partnership for 2019-2024 between the World Bank and Morocco as a template for the Bank’s financial and technical assistance programs in the country. The first program to be approved was the $700 million loan.

Marie Francoise Marie-Nelly, the World Bank Maghreb country director, said that Morocco has been making strides both economically and socially. She noted that the progress has helped raise the aspirations of Moroccans, especially the youth. “The Kingdom is at a turning point in its history and has a unique window of opportunity to create high and inclusive growth, taking advantage of positive trends in Moroccan society, including urbanization and the demographic transition.” The World Bank said that Morocco has tremendous potential and that they “will receive full support from the World Bank Group” to ensure that Morocco has the necessary skills to boost its economy.

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