As one of the main pillars of Morocco’s National Pact for Industrial Emergence, the country’s offshoring sector has undergone a transformation thanks to infrastructure development and policies aimed at making the kingdom the preferred offshore destination in French-speaking Africa and beyond.
With global companies moving towards a more Anglo-Saxon organisation style, increasingly outsourcing their operations, Morocco is seeing new opportunities and two specific challenges: the readiness of its market, and competition from sub-Saharan countries. As Morocco continues to develop and its living standards rise, European companies mindful of labour costs are looking south for their low-skilled, labour-intensive activities. “Morocco offers a relatively better environment for outsourcing. Reliable technical infrastructure, a favourable geographic position, cultural proximity, political stability and a skilled labour force make the country an appealing destination,” Nadia Ben Bahtane, group marketing and communications director at Moroccan offshoring company Intelcia, told OBG.
While the 2020 goals of 100,000 jobs and Dh16bn ($1.6bn) in revenue outlined in the Industrial Acceleration Plan (Plan d’ Accélération Industrielle) 2014-20 may seem optimistic, considerable progress has been made; at the end of 2018 the sector employed nearly 80,000 and its revenue exceeded Dh10.5bn ($1.1bn), making it one of the top-five foreign exchange generators.
Morocco’s competitive advantages are threefold: geographic proximity to buyers’ markets, making it a so-called near-shore zone as opposed to a sub-Saharan offshore zone; relatively developed transportation, education and technology infrastructure; and a population skilled in Arabic, French, English and Spanish.
“Investors, especially those interested in West Africa, are increasingly using Morocco as a launching pad for their West or Pan-African expansion plans,” Zouheir Lakhdissi, CEO of Dial Technologies, a digital transformation solutions provider, told OBG.
Yet, any further advancements in the business process outsourcing or information technology outsourcing subsectors confront the major structural challenge of a skilled workforce.“Morocco needs to adapt its IT skills training to meet the needs of the market in order to ensure a successful digital transition,” Amine Kandil, the CEO of N+ONE, a local cloud solutions provider, told OBG. While major companies such as Intelcia run their own training centres and international actors like Renault and Swissport enter the market with well-defined needs and training processes, state training programmes are necessary for sector-wide development.
“High turnover rates are inherent to our sector. Training can be long and costly, and retention is not guaranteed in such a competitive environment,” Ben Bahtane said. To help curb the extra costs incurred, the government has created financial incentives to support rural youth employment, including implementation and training subsidies for certain rural areas. The Office of Vocational Training and Work Promotion is partnering with private companies to develop and implement tailormade curricula.
While the 2020 budget law ended five-year tax exemptions for newly established export companies in accelerated industrial zones, it maintained corporate tax exemptions for offshoring companies. The government is supporting employment in the sector with subsidies ranging from Dh15,500($1615) to Dh33,000($3438) per employee.
“It is key for Morocco to develop the proper ecosystem for micro-, small and medium-enterprises, particularly in emerging sectors,” Omar Chekrouni, the managing director of Arkeos, told OBG. “In addition to financing, it is important to guide start-ups in developing and executing their business plans.”
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