| By David Morgan |
 Morocco operates a successful market economy that has long been noted for its openness to foreign investment. It has pursued a policy of gradual but consistent reform to improve the general business environment. It is open to foreign capital which now plays an important part in the total investment and does not discriminate between national and foreign investors. The country has been able to capitalise on its skilled workforce, its close proximity to Europe and is successfully positioning itself as a production and export platform for European know-how. Inward investment has also been attracted by policies of liberalisation and privatisation undertaken in key sectors such as ICT, energy, water, electricity distribution and infrastructure. As part of its economic development strategy, Morocco has identified five engines of growth: industry, tourism, trade, agriculture and infrastructure. In order to diversify its sources of income and reduce dependence on traditional sectors such as agriculture and tourism, the country is positioning itself as a destination of excellence with a high skills base and new economic activities offering added value that are attractive to investors. The strategy first launched in 2000 has consisted of comprehensive reforms aimed at improving the business climate, improving macroeconomic indicators and establishing sectoral strategies with targets and specific measures for medium and long term development. In 2009, the government and private sector consolidated their commitments to the Emergence Plan, first launched in 2006, by adopting a National Pact for Industrial Emergence covering the period to 2015. This has a total budget of €1.1 billion of which 34% has been dedicated to training and human resources and 24% to encourage investment. The programme seeks to generate €4.5bn in private investment designed to create some 220 new jobs and boosting exports to the tune of €8.5bn. The industrial strategy focuses on activities where Morocco is world class such as FDI oriented activities like aeronautics, automotive, electronics and nearshoring, as well as traditional activities like agri-business, textiles and leather. The Morocco Trade Day, being organised by the Arab-British Chamber of Commerce in cooperation with Maroc Export and the Moroccan Embassy in London on 21 June, will feature three of the major sectors in the country that offer significant investment potential to British businesses. Agriculture & Marine Morocco is modernising its agriculture and agri-business sector in order to diversify production, enhance its added value and supply international markets with its produce. In recognition of the great potential for agricultural development, in 2008 the Ministry of Agriculture launched the Green Morocco Plan (Maroc Vert), which aims to develop a modern, high-performance and competitive agriculture. A related programme involves the upgrading of the fishing industry. The sector is in need of greater industrialisation and has been subject to the vagaries of the often hostile climate. Some 60% of the working population either directly or indirectly derive their livelihoods from agricultural production so the success of the development plan has an enormous importance for the economy. There are a range of opportunities emerging in this sector: market gardening of spices and small fruit like strawberries; development of organic farming and pre-cooked dishes; olives, olive oil, fruit juices; modern fishing techniques and seafood processing. Attractions for investors include exemptions from corporate tax and income tax for the agricultural sector until 2013. There are also specific measures to support integrated projects in basic foodstuffs such as milk and wheat, products with high added value like citrus and olive oil and products for mass consumption like confectionery and biscuits. Six agri-parks are currently operational or under development in Meknes, Gharb, Berkane/Madagh, Agadir, Haouz and Tadla. Garments & Textiles Textiles, leather and clothing is the premiere industrial sector in the country and plays a major role in the social and economic development of the regions. Driven by changing consumer behaviour patterns and market globalisation, the industry offers opportunities for development through increased exports. To ensure that the industry can respond most effectively to new global market conditions, in 2005 Morocco launched a recovery plan for the reorganisation of manual operations, to redirect the industry from subcontracting to co-contracting and finished products. It also aims to make improvements in the technical performance of upstream processes and reduce the costs of production. Opportunities in the country’s garments industry today include the production of casual and sportswear; under garments; the production of wool, cotton, synthetic textile and artificial fibres for weaving. It may be mentioned that among the market support available to the sector, the Export Free Zone in the Tangier Med offers specific incentives for operators in the industry. Auto Industry This industry is characterised by a preponderance of bodywork and trailer manufacturing as well as the assembly of vehicles. At present the industry is still mainly oriented towards the domestic Moroccan market. However, the country is seeking to boost its exports by deriving more benefits from its competitive production costs and proximity to European markets. Following a major deal with French car firm, Renault, to launch a new “family car” in Morocco, the automotive sector is being repositioned. The aim is to integrate national capacity within a global manufacturing strategy and attract more production activities and facilities into the country. Driven by foreign know-how and expertise, the local industry intends to gain in performance and reach international standards in terms of quality. By so doing, Morocco will move to a more comprehensive control of the value chain, moving from assembly plants to more sophisticated manufacturing activities such as engines. It is anticipated that a revamped automotive sector could generate €630mn in additional GDP and create 40,000 new jobs by 2015. Opportunities for investors in the sector range from production of components such as wiring harnesses, filters, connectors, exhaust pipes, seats and hoods, tyres and electronics to assembly and carriage works. Automotive cities and dedicated industrial sites have been established in Tangiers and Kenitra, as well as Export Free Zones and zones dedicated to original equipment manufacturing (OEM) in Melloussa and Tetouan. Source : Global Arab Network This report appears in the latest issue of Economic Focus (Spring 2010), the quarterly magazine of the Arab-British Chamber of Commerce |