The Report: Morocco 2013
Located in the westernmost region of North Africa, Morocco has a unique blend of Arab, European and African cultures, with large Arab and indigenous Berber populations. The population stood at 32.3m in mid-2012, with a median age of 27.3 years. Around 99% of the population is Muslim, with most adhering to the Maliki school of Sunni Islam. Modern Standard Arabic is the official language, although its local dialect Darija is more commonly used. A trend in rural migration has transformed the country into a largely urban society over the last decade, and around 58% of citizens now live in cities. The kingdom boasts vast deposits of mineable resources, including significant phosphate reserves, along with iron, ore, manganese, zinc, lead, salt, cobalt and silver.
Country Profile
Largely spared the unrest that spread through the region as part of the Arab Spring, Morocco’s stability was in part thanks to subtle shifts in power brought about through constitutional changes in 2011 that further empowered parliament and devolved some responsibilities to regional authorities. A member of several regional and international bodies, Morocco has strong relations with a range of partners, especially the US and the EU, which is its largest trading partner. This chapter includes a viewpoint from His Majesty King Mohammed VI, and interviews with Abdel-Ilah Benkiran, Head of Government; and Alistair Burt, UK Minister for the Middle East and North Africa.
Explore chapterEconomy
The Moroccan economy experienced several setbacks in 2012 due to a combination of unfavourable global economic trends, a volatile exchange rate and a drought that caused a drop in revenues from its primary sector, agriculture. However, the government is committed to addressing the most pressing concerns for the economy, having laid out development plans for the agriculture and tourism sectors. A strategy to expand emerging industries and exports is also placing emphasis on public-private partnerships, which will likely be key to growth in the coming years. Additional reforms are being implemented to address unemployment, attract foreign investment and create a better business environment. This chapter includes interviews with Nizar Baraka, Minister of Economy and Finance; Chakib Benmoussa, President, Economic, Social and Environmental Council; and Ahmed Fassi-Fihri, Investment Promotion Manager, Moroccan Investment Development Agency.
Explore chapterBanking
While growth at some banking institutions slowed in 2012, due mainly to the pressures of exogenous slowdowns, the sector has remained largely resilient due to prudent regulation by the central bank. The country’s banks posted aggregate net income of €3.2bn in 2011, a 9% increase over €2.9bn in 2010, which translated to 4% growth in net income that year. The government is now grappling with rising fiscal and current account deficits, which became more severe in 2012 due to lower revenues from agriculture and tourism, the country’s main sources of income. To address tightening levels of liquidity, the central bank has cut reserve requirements and approved certificates of deposits. Meanwhile, new regulations set to come into effect will allow for the operation of fully fledged Islamic banks in the kingdom. This chapter includes interviews with Abdellatif Jouahri, Governor, Bank Al Maghrib; and Mohamed El Kettani, CEO, Attijariwafa Bank.
Explore chapterCapital Markets
Capital markets in Morocco have seen a number of difficulties in the past years, with the slowdown in the eurozone crisis and continued regional unrest putting pressure on the market. The bourse has posted losses for two years in a row, prompting calls for the accelerated institution of legislative reforms to aid regulators in stabilising operations. The Casablanca Stock Exchange is currently dominated by institutional investors, along with high-net-worth individuals and foreign investors. The authorities are working to get more companies to list by offering incentives, particularly to SMEs, and renewing activity on the bourse is a key goal for market regulators. This chapter includes an interview with Karim Hajji, CEO, Casablanca Stock Exchange; and a viewpoint from Younes Benjelloun, Partner and CEO, CFG Group.
Explore chapterInsurance
With a domestic penetration rate of around 2.8% and the volume of premiums having grown 9.2% year-on-year in 2011, Morocco’s insurance market is now the second largest on the continent after South Africa and the third largest in the Arab world after Saudi Arabia and the UAE. With 17 insurers in the country, the domestic market is becoming more competitive and local players are now looking to develop products to reach uncovered segments of the population. Priorities include increasing comprehensive coverage, including life, health and property insurance for the self-employed, while the government has also begun promoting agricultural insurance. With the growth of industries such as construction, real estate and manufacturing, the sector is expected to continue expanding in the medium term. This chapter includes interviews with Mohammed El Alaoui El Abdallaoui, General Manager, Moroccan Pension Fund; and Moulay Hafid Elalamy, President, Saham Group, and President, CNIA Saada.
Explore chapterIndustry & Retail
After experiencing a dip in growth from 2008 to 2010, the industrial sector is expanding once again, with government initiatives being put in place to boost value-added sectors such as aeronautics, automotive production and textiles. The industrial sector accounted for 32.3% of GDP and 23.8% of employment in 2011. A new development plan, the National Pact for Industrial Emergence, promises to create 220,000 new jobs in the sector, as well as an €8.44bn increase in exports and a €4.44bn rise in foreign investment. The diverse range of activities, combined with these new initiatives, bode well for growth and employment across the sector. This chapter includes interviews with Saïda Lamrani Karim, Vice-President, Groupe Safari; Guy Hachey, President, Bombardier Aerospace; and Miriem Bensalah Chaqroun, President, General Confederation of Moroccan Enterprises.
Explore chapterTelecoms & IT
As the government evaluates the initial results of the Maroc Numeric 2013 plan, improved access is pushing the sector to expand. Benefitting from steady economic growth as well as a countrywide strategy to increase information technology (IT) usage, Morocco’s IT sector has seen stable expansion. Governmental policy has been framed under the Maroc Numeric 2013 strategy, which has had an immense impact in all areas of communications technology usage and provision. Increased use of mobile phones and improved access to 3G has meant a rise in penetration rates.
Explore chapterTourism
Despite its relative stability, the kingdom’s tourism sector experienced a number of difficulties over the past two years as the region has struggled with political unrest. However, its strength and speedy recovery has shown just how important tourism is to the Moroccan economy, with the country attracting 9.38m visitors in 2012. Oversight of the sector is set to be reorganised, with management increasingly devolved to regional authorities. Plans to focus on niche segments such as ecotourism and adventure tourism, as well as continued investment for beach resorts as part of Plan Azur, should help develop rural parts of the country and will diversify the sector’s offerings. This chapter includes interviews with Lahcen Haddad, Minister of Tourism; and Yann Caillère, President and COO, Accor Group.
Explore chapterMining
With a new set of laws set to be passed in 2013 to replace the existing mining code, the government is seeking to open the sector to additional foreign investment and offer more concessions to extract and process the country’s mineral wealth. Phosphates mining accounted for 92.7% of the sector’s total production in 2011. Other mineral resources include gold, silver, barite, cobalt, copper, manganese, tin, fluorspar, iron, lead and salt. A major investment programme worth €91bn is hoped to expand phosphate production capacity and attract investor attention to opportunities in mining both phosphates and other minerals. This chapter includes an interview with Mustapha Terrab, CEO, OCP Group.
Explore chapterTransport
Now in the midst of a three-stage strategic plan to develop the transport sector and position the country as a regional hub for air and maritime traffic, Morocco has experienced remarkable growth in transport networks in recent years. The government invested some €10.67bn between 2008 and 2012 for infrastructure building and introduced liberalisation and competitiveness reforms. To maximise the benefits of the country’s expanded infrastructure, the government has also proposed a Dh60bn (€5.33bn) investment programme over the 2010-30 period for the construction of a nationwide logistics network. This is expected to increase efficiency and boost revenues in maritime, air, road and rail transport. While much of Morocco’s transport sector continues to be managed by public entities, particularly airports and railways, private sector firms are coming to play larger roles, especially in maritime segment. This chapter includes interviews with Aziz Rabbah, Minister of Equipment and Transport; and Hartmut Goeritz, Director-General, APM Terminals Tangier.
Explore chapterConstruction & Real Estate
The construction sector achieved 4.2% growth in 2011 and has consistently contributed around 5% to 6% of the GDP over the last eight years. Public spending on infrastructure has created opportunities for both local and foreign firms in the last decade. From 2003 to 2012, the government invested nearly Dh180bn (€16m) in basic infrastructure in an effort to improve capacity and efficiency. Foreign firms hailing from the EU – especially Spain – as well as Turkey, South Korea and China have been drawn to Morocco to create large-scale, mixed-use projects. While building has slowed in some sectors as a result of the global economic downturn, strong demand for construction in housing, public services, industry and energy should continue to stimulate sector activity in the medium term. Indeed, a number of high-value commercial real estate projects have continued to attract international investment. Recent developments include efforts initiated in 2011 to create 11 new cities, a number of which are located outside of Casablanca and Rabat. The government is looking to public-private partnerships to support urban regeneration and the construction of low-income housing. In the short term, efforts to incentivise social housing construction and urban planning programmes meant to absorb sub-standard housing will continue to drive much real estate sector activity. This chapter includes an interview with Mohammed Fassi-Fehri, Director-General, CDG Development.
Explore chapterAgriculture
Agriculture contributed 13.2% of GDP in 2011, up slightly from an average yearly contribution of 13% of GDP between 2006 and 2010. Poor weather conditions in the first quarter of 2012 significantly reduced the seasonal output of many crops. However, efforts to boost investment, restructure the sector and modernise agricultural practices should help to protect against future shocks. The sector is expected to continue expanding in the coming years as domestic demand grows and progress is made on the sector’s development strategy, the Green Morocco Plan (Plan Maroc Vert, PMV). By 2020, the PMV’s first pillar aims to increase the value of agricultural exports from €711m to €3.9bn, primarily by developing high-value crops such as citrus, fruits and vegetables, and olives. To meet its ambitious targets, the kingdom will need to generate considerable investment from the private sector.
Explore chapterEnergy
As a rapidly growing country with only modest energy resources, Morocco’s dependence on external power supplies continued to increase over 2012, with the value of energy imports jumping 11.9% year-on-year from 2011 to 2012. With 96% of energy needs met by fossil fuel imports, especially oil and coal, the country is in a precarious fiscal position as government budgets grapple with elevated oil prices. As one of the most underexplored countries worldwide for oil reserves, authorities are seeking to raise incentives for international firms through a number of schemes, including a 10-year corporate tax break for new discoveries. Greater interest from international energy groups by way of new licences for drilling rights has led to a higher volume of offshore exploration. The search for domestic hydrocarbons resources is being complemented by a focus on developing renewable energies and increasing energy efficiency, which – in addition to creating opportunities for local and foreign investors – looks set to reduce costly imports and ensure that supply keeps pace with demand. In short, Morocco’s diversification of energy sources has created a number of promising prospects for growth. This chapter includes interviews with Ali Fassi-Fihri, Director-General, National Office of Electricity and Water Supply (ONEE); and Amina Benkhadra, General Director, National Hydrocarbons and Mining Office (ONHYM).
Explore chapterEnvironment
In the face of important environmental challenges created by rapid population growth, pollution and climate change, Morocco has established itself as a strong advocate for environmental protection and conservation. The government’s major new energy strategy focuses on diversifying energy sources with the target to produce 42% of electricity needs from renewables by 2020. Despite the presence of many environmental challenges to the kingdom, Morocco has initiated several rounds of regulations and reforms aimed at improving and expanding its environmental protection commitments. More extensive reforms are also in the process of being introduced, including a new law intended to facilitate access to information on environmental developments and regulations against soil erosion and noise pollution. With growing concerns about air and water pollution, inadequate waste management facilities, burgeoning costs for energy imports and the destruction of the kingdom’s ecosystems, the government has adopted a multitude of initiatives to combat these issues, setting an impressive example for the rest of the region. This chapter contains an interview with Ahmed Squalli, President, Amisole.
Explore chapterHealth
Galvanised by encouraging policy-driven results, as well as by the 2011 constitutional amendments that enshrined access to health care as a basic right of all citizens, Morocco is securing the gains it has made over the past two decades. While health care indicators have shown improvements in recent years, a noticeable gap continues to exist between the country’s urban and rural areas, prompting new government programmes to correct this. Although the RAMED insurance scheme should greatly increase the number of people who have access to medical services, future success will depend on revamping existing infrastructure and deploying new equipment into less developed areas. The kingdom’s pharmaceuticals sector has seen steady growth over several decades, with the number of local and foreign manufacturing units growing from 13 facilities in 1975 to 32 in 2011. Sales reached €755.7m in 2012, a 4% increase on 2011 figures. Production accounts for 70% of local consumption, but exports are still low compared to capabilities, at 10% of annual output. This chapter includes an interview with Houssaine Louardi, Minister of Health.
Explore chapterEducation
Continuing its efforts to improve literacy rates and match curricula with employers’ needs, Morocco has been increasing its investment in education. Rural enrolment levels are steadily rising, climbing from 49.7% in 2007/08 to 56% in 2010/11. Economic growth is bringing opportunities for increased participation of the private education sector, while international cooperation with new universities and research institutes is opening the door to a more globalised higher education system, positioning the country as a regional centre for tertiary provision. An increased focus on research capabilities is expected to enhance Morocco’s education capabilities and help to build a closer link between the education system and the companies working in emerging priority sectors such as aeronautics and renewable energies. This chapters contains an interview with Thami Ghorfi, President, ESCA Ecole de Management.
Explore chapterMedia & Advertising
The rise of new print titles in an increasingly digitally driven sector shows that the Moroccan media business still has the capacity to absorb innovative products, particularly if they cater for the larger, Arabic-speaking public. A 14-member commission led by the minister of communication has been set up to design a new press code to include standards for online newspapers and to create a national council for press and ethics, while a new law that would allow non-Moroccan citizens to hold up to a 30% stake in local newspapers is expected to be approved by parliament in the second half of 2013. With the rising number of media ventures in different communication vehicles, Morocco’s media sector is setting the pace for continued growth. The global economic downturn has had tangible effects on the advertising sector, with spending dropping from €524.5m in 2011 to €497.8m in 2012. Nevertheless, Morocco remains one of the main advertising markets in the Maghreb in terms of its size and dynamism. Television is still the most important of traditional media vehicles, and local channels are seeing increased competition from pan-Arab satellite channels, steadily claiming pieces of the advertising pie. The internet continues to become a more attractive medium to invest in, as new online products are further threatening the hegemony of print media outlets. Industry stakeholders met in the beginning of 2013 to discuss the development of a new code of conduct for the sector, in an effort to move away from strict sanctions by the regulatory body, the High Commission for Audio-visual Communications.
Explore chapterOriental
After a decade of investment, Morocco’s Oriental region is ready to build a strong reputation in the Mediterranean. For years, the Oriental, as the Eastern Region is known, suffered from insufficient transport connections to the rest of the country and a lack of the infrastructure necessary for supporting the development of its family-owned businesses and strategic industries. However, an increased focus by the government on devolving some decision-making powers as well as improving both growth and social development indicators in areas outside of Casablanca and Rabat has led to a shift in policy and the influx of government support of the kingdom’s regional governments. In 2012 the Oriental attracted Dh7.9bn (€703.2m) of private investment in 256 projects with the overwhelming majority of these in the building and construction sector. The region’s fortunes will be enhanced with further integration with Morocco’s neighbours. Sustained investment in new industrial zones and the regional focus on strategic sectors should also help to foster a strengthened private sector. This chapter contains an interview with Mohamed Mbarki, Director, Agence de l’Oriental.
Explore chapterTax
In conjunction with KPMG, OBG explores the taxation system, examining Morocco’s investor-friendly environment. OBG talks to Fouad Lahgazi, Senior Partner, KPMG, on new legislation governing public-private partnerships (PPPs).
Explore chapterLegal Framework
OBG introduces the reader to the different aspects of the legal system in Morocco, in partnership with Kettani Law Firm. Nadia Kettani, Partner, Kettani Law Firm, talks to OBG.
Explore chapterThe Guide
This section includes information on hotels, government and other listings, alongside useful tips for visitors on topics like currency, visas, language, communications, dress, business hours and electricity.
Explore chapterTable of Contents
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