Morocco Shines in E-Commerce and Investment Opportunities; Cloudiness in Tunisia and Algeria – Jean R. AbiNader
Jean R. AbiNader
September 26, 2019
Morocco is still finding its way in adapting to ecommerce. To build a robust sector requires the intersection of three entities: government regulations, pioneering companies, and ready consumers. As noted in a Paypers.com blog, in 2019, Morocco unveiled a reform program to address social and economic inclusion, with approximately $700 million in funding from the World Bank. “This program is focused on three core pillars: to enhance financial inclusion for individuals and entrepreneurs, support the development of digital platforms and infrastructure (i.e. increasing broadband internet access), and enhancing support to digital entrepreneurs. But beyond just creating a more inviting backdrop for digital businesses, another stated goal is to create more options around mobile payment solutions to increase the efficiency and lower the cost of transactions.”
This move to a more digital economy, aside from speeding transactions and opening more choices and options for consumers, will impact businesses from call centers to distribution and warehousing centers that thrive on servicing electronic transactions. The article makes several important points about the current status and future for ecommerce in Morocco. It points to an analysis from Ernst & Young’s most recent Attraction Barometer. “Morocco was cited as having the most compelling business backdrop for global investment activity across all of Africa. This is due in part to the country’s role as the main commercial hub on the continent, located on the Strait of Gibraltar’s southern shore. But it also speaks to the country’s progress around corporate governance, the ongoing diversification of its economy, investments in infrastructure, and steady growth in commerce.”
While all of these factors are promising for retailers, the article also mentions a charming factoid about consumers in the country that counters rapid growth for ecommerce companies. “To a certain degree, the slow uptake for online retailers traces back to the central role of souks in Moroccan society, as the omnipresent marketplaces across Marrakech, Casablanca, and Tangier date back over 2,000 years. This is also why trust is so critical in a country where shoppers are accustomed to holding and scrutinizing goods and then haggling with vendors before making a purchase.”
While this affects some products more than others, think food, jewelry, textiles, and home goods, some sectors are already moving ahead particularly purchases of airline and hospitality services. The article goes on to say that “Airbnb currently lists over 2,000 properties in Morocco providing access to Morocco’s famed riads.”
Morocco’s attractiveness to investors was reinforced by a listing in How we made it in Africa.com, an investment related site base in South Africa. Commenting on the latest study by Rand Bank on countries that are leading the way on the continent, Morocco came in at #2, after Egypt and bumping South Africa out of the #2 slot. It said that “While only Africa’s fifth-largest market, Morocco’s expected growth rate of 4% over the medium term and its greatly-enhanced operating environment has served the country well since the Arab Spring. Their reintegration into the African Union and accession to the Economic Community of West African States (ECOWAS) have enhanced its investment appeal.”
How Morocco will be able to translate this continued good news into economic growth that drives employment for the country’s youth is still a conundrum as most investments outside of tourism and agriculture are in sectors that are not labor-intensive. Hence the emphasis on a new national education strategy to steer graduates vocational and technical careers that have a high demand future.
The news from Tunisia and Algeria portends possibly important shifts in the current power structures. In Tunisia, the runoff between a social conservative and an incarcerated populist media mogul, may impact the legacy of its post-Arab Spring legacy as the burgeoning democracy in the Maghreb. Results of the first round of the presidential election in Tunisia saw a thorough rejection of the current players. “Instead, two political outsiders emerged on top and will enter a runoff election in October. One is a constitutional lawyer who says he has never voted before. The other owns a television station and is in jail on suspicion of tax evasion and money laundering.”
The New York Times piece goes on to say that “The two leading candidates for the presidency, the constitutional lawyer Kais Saied and the jailed media mogul Nabil Karoui won just a third of the vote between them. Both will have to work hard to win new supporters before the next vote.” As importantly, whoever wins will then have to build a strong coalition to do well in the following parliamentary elections October 6. No one is predicting either outcome at this point.
In Algeria, the interim president, Abdelkader Bensalah, following calls by army chief Lieutenant General Ahmed Gaid Salah for an election as soon as possible, announced that the presidential election will be held December 12. This came after news that authorities named an independent election authority to organize the vote to replace the Ministry of Interior, which has been in charge of elections over the past years, according to an article in Al Jazeera. Protestors, still without a leadership cadre and now under more pressure from the army, which is arresting and obstructing demonstrators, have yet to formulate a unified response and continue their Friday demonstrations.