3.2.1. Launch…of Global Entrepreneurship Summit to be held in Morocco

US-led Initiative Highlights Morocco’s Role as Trade & Investment Platform

After a flurry of meetings in late August and early September, the US and Morocco launched the overall outline of the program for the Global Entrepreneurship Summit (GES) to be held in Marrakech, Morocco November 19-21. The GES website provides the breakdown of the sessions and themes while speakers are still being invited.

Blog GES 1It is expected that Vice President Joe Biden will head the US contingent, which will include members from the State, Commerce, and Education Departments, and from other agencies with a remit focusing on employment and entrepreneurship programming. Under the theme of “Harnessing the Power of Technology for Innovation and Entrepreneurship,” some 3000 entrepreneurs, heads of state, government officials, and leaders of businesses ranging from small and medium-sized enterprises (SMEs) to multinational corporations will be on hand to discuss how “Technology creates opportunities and enriches the human capacity for dynamic collaboration. It builds social capital, promotes human development and facilitates the exchange of information and ideas.”

On November 19th, the featured program will be a “Women’s Entrepreneurship Day Celebration Lunch” as delegates gather for meetings, sessions, side-bar events, and opportunities to promote their ideas, projects, and experiences in entrepreneurship. The conference will reach beyond technology applied to ICT and examine its role in promoting water management, alternative energy, sustainable agri-business, and business development, among other areas.

Among topics to be addressed on November 20-21: lessons learned moving from talent to entrepreneurship; regional connectivity to promote business across boundaries; the importance of smart cities in adapting technology to human development; social entrepreneurship; innovations in entrepreneurship and financing; and the central issue of building and sustaining an ecosystem to support entrepreneurs.

Making Contacts for Building Business

With a strong emphasis on allocating time for B2B meetings between entrepreneurs and potential investors and government officials, GES will host an online MARKETPLACE module to encourage participants to spend time meeting with their peers and specialists to discuss common interests and “opportunities for technology transfer, investment, mentoring and growing and scaling businesses (expertise in certain sectors, with certain technologies, regions and countries, potential investment offers, training and so on) as well as request help in areas they need (on-the-ground support in countries, potential partnerships and so on).” The MARKETPLACE will be an ongoing legacy of the Summit to facilitate follow up and continued interactions among participants.

Minister Delegate Mamone Bouhdoub talks business

Minister Delegate Mamoune Bouhdoub talks business

According to a story in the Business Standard, “the selection of Morocco as host country reflects the active role it plays in the overall economic development of the African continent, the kingdom’s leadership in supporting entrepreneurship and the integration of youth and women into the economy.” The article mentions that a key goal for Morocco at the conference is to promote concrete steps by global investors to “finance start-ups and new ventures with a strong emphasis on financing ventures for women entrepreneurs.”

Consistent with its own efforts to stimulate economic growth through a myriad of programs and partnerships with the private sector, Morocco is making a statement about the need for sustainable and inclusive growth touching all sectors of society.

Morocco’s Mojo Moving Financial Markets!

Continues to Strengthen its Regional Leadership Role

A recent Bloomberg report, “Morocco Mojo Building from Moody’s to Record Bond Yields,” pointed out that “Moroccan bond yields are tumbling to records as an increase in issuance boosts liquidity amid a stable political backdrop, according to Standard Chartered Plc.” It also noted that “Moody’s Investors Service raised Morocco’s credit rating outlook to stable from negative last week, citing progress on subsidy cuts and booming industrial exports.” What’s driving Morocco’s continued good news in the financial world was underscored in the June 2014 newsletter released by the Moroccan Investment Development Agency (AMDI), which cited the following statistics:

  • Foreign Direct Investment (FDI) increased by more than 23 percent in 2013, to more than $5 billion, with the largest deals in food processing.
  • FDI increased for the third year in a row, mirroring the recovery in Europe with French FDI up 20 percent.
  • Industrial investments in 2013 represented 39 percent of FDI
AMDI Newsletter

AMDI Newsletter

The newsletter cited other sources with good economic news ranging from Foreign Policy’s Baseline Profitability Index (BPI), which ranked Morocco third in the Arab world, and the only Maghreb country listed; to the World Economic Forum’s “The Global Enabling Trade Report 2014,” in which Morocco improved by 21 places. AON, a global insurance broker and expert in risk management gave Morocco the best mark in the region for business climate, and Morocco was only one of two Africa countries to make AON’s list in its Global Risk Management Survey.

Success Growing in Diverse Sectors

It is no surprise, given its stability and strong investments in the sector, that Morocco was named as the number one country in North Africa in terms of the importance of tourism by the World Travel and Tourism Council (WTTC) in its Travel and Tourism Economic Impact 2014 report. And the financial sector also received accolades at the 2014 Africa CEO Forum, when Attijariwafa Bank was named African Bank of the Year 2014.

The supply chain for the automotive industry continued its expansion as Saint Gobain announced a new $18 million windshield glass and glazing factory in the Kenitra Atlantic Free Zone, joining Lear Corporation’s launch of its fourth factory for electrical wiring that will employ upwards of 1700 people; and Yazaki’s is opening its third plant for automobile wiring targeting 3000 jobs.

The balanced growth of the industrial sector is demonstrated by the $26 million steel sheet processing and preparation plan being constructed by the Spanish firm Bamesa with a capacity of 100,000 tons a year. The French firm LH Aviation, noted for its light aircraft, opened its first manufacturing facility valued at some $20 million; and Elephant Vert announced its plans for two fertilizer and pesticide factories with an investment of $58 million.

In the IT sector, Lacamobile, the world leader in low cost call centers, is setting up its first facility in Morocco that will employ 1000 people; while Ingenico, tops globally in electronic payment solutions, has chosen Morocco as its headquarters for serving African clients.

The rapidly developing new town of Zenata scored two coups in 2014: the announcement of the first IKEA store in Morocco located in its city commercial center; and a planned shopping center, whose manager will be Sonae Sierra, a Portuguese firm that will be investing more than $15 million in its first foray into Morocco.

Why Not Morocco?

It is not surprising that AMDI focuses on the positives of investing in Morocco; there can be no understating how that country’s success is critical to the region’s economic health. Morocco is making a positive contribution to its own development

Morocco's growing exports lead economic regional integration

Morocco’s growing exports lead economic regional integration

and that of its neighbors by creating value centers for economic activity that serve regional and international markets. Its achievements to date would not be possible if companies did not believe in the stability and vision of the country and the efforts made by the government and private sector to be business-friendly and reliable partners. The companies are profitable, valued jobs are being created, and Morocco is demonstrating its well-earned regional role as a leader in economic growth.


11th Edition of Morocco’s Tourism Conference Slated for September 29

Focus on Building Local Tourism Capabilities

The Moroccan Ministry of Tourism, in conjunction with key government and private sector stakeholders, will open its 11th Tourism Conference on Monday, September 29. The conference will focus on two major themes: growing the tourist potential throughout Morocco and strategies for attracting investment to promote tourism development.

Minister Lahcen Haddad speaks to CNN

Minister Lahcen Haddad speaks to CNN

Minister of Tourism Lahcen Haddad noted that Vision 2020, the national plan for Tourism, aims to make the most of Morocco’s touristic potential and to ensure fair and equitable distribution of tourism wealth throughout the national territory.” He will be joined in the opening session by the Prime Minister, as well as officials from the National Confederation of Tourism, the mayor of Rabat, the Spanish Minister of Industry, Energy, and Tourism, and the General Secretary of the UN World Trade Organization (UNWWTO).

Morocco plans to develop at least eight additional tourism destination areas, each having its own distinctive character and distributed among the coastal, cultural, and ecological attractions of the Kingdom. In developing a comprehensive strategy to guide robust and sustainable development, the conference will discuss how to vary the development according to the unique environment of each site, including needed infrastructure, local regulatory governance to protect the environment and guide growth, and the marketing and logistics conditions that need to be addressed.

Branding Morocco’s Tourism

blog 26Sep 1In surveys that identify perceptions of Morocco, tourism ranks consistently on or near the top, especially in Europe and North America. Vision 2020 seeks to exploit that favorable image by creating even more diverse destinations to appeal to a broader tourist base. Fortunately, with more than a decade of dedicated analysis and development in the tourism sector, Morocco has learned a great deal about what attracts and holds the interests of travelers. Experts from Marrakech and Bilbao, Spain, will share their experiences and make recommendations for enhancing Morocco’s tourism industry. But none of this is possible without sufficient and targeted financing.

Vision 2020’s goal is to make Morocco one of the top 20 destinations worldwide and a model of sustainable development throughout the region. This can only be achieved through a diverse, high-quality tourism industry that makes the most of what Morocco has to offer and provides the services that tourists demand. According to the plan, Morocco will double the current number of hotel beds; provide incentives and programs to direct tourism investment to the target sectors of entertainment, sports, and leisure; add value to the presentation and promotion of Morocco’s cultural and artisanal heritage; and develop the right hospitality infrastructure for each of the new sites.

Encouraging Private-Public-Partnerships for African Development

Africa50 Infrastructure Fund Sets its Mission

Casablanca Finance City (CFC) took another step forward in its goal to be the financial services hub for business in West, Central, and Atlantic Africa when the African Development Bank (AfDB) opened its Africa50 Fund headquarters in the CFC this week. The purpose of the Fund is to build private-public partnerships (PPPs) to finance national and regional infrastructure projects “to accelerate the continent’s development rate.” The concept crystallized in 2012 when African leaders “called for innovative solutions to facilitate and accelerate infrastructure delivery in Africa.” This led to a recommendation for a PPP Fund that would reflect the lessons learned in critical sectors including energy, transportation, and water, and pursue projects that are development-oriented and commercially operated. Key to the Fund’s ethos is that “operational decisions will be made by a management team selected solely on technical merit and demonstrated managerial competence.”

African50 Fund Operational at Casablanca Finance City

African50 Fund Operational at Casablanca Finance City

Africa50 has two business areas – project development and project finance. The project development arm aims to increase the number of bankable infrastructure projects through substantial increases in early-stage project development activities working in tandem with highly skilled development experts. Project finance focuses on developing and launching investment vehicles needed to attract additional infrastructure financing.

The Fund’s goal is to shorten the time “between project idea and financial close from a current average of 7 years to under 3 years, thereby delivering a critical mass of infrastructure in Africa in the short-to-medium term.” The investors/shareholders are African countries, the AfDB and other development financiers, African diaspora and high net worth individuals, and institutional investors, including pension and sovereign wealth funds.

What’s at Stake

In an AllAfrica.com interview on the Africa50 Fund, AfDB president Donald Kaberuka pointed out that Africa currently only has about half of the $92 billion needed annually for infrastructure. “We have to build a vehicle with an equity base based on Africa’s own pools of savings. And on those bases we go into the market to raise money.” Tas Anvaripour, Africa50 director, believes that eventually, “Africa50 will be able to finance infrastructure projects across the continent with an estimated value of more than $100 billion.” This is not beyond reach, Ms. Anvaripour indicated, pointing out that AfDB “during the past six years, has financed 49 infrastructure projects totaling more than $30 billion.”

RAM1The Africa50 Fund’s presence in CFC validates Morocco’s key role in African development and furthers the extensive business and financial services that its banks already provide in the region. With its emphasis on building PPPs for infrastructure projects, the Fund has a ready partner in Morocco, which has financed the bulk of its energy development through PPPs. Morocco’s consistent efforts to improve its economy and business climate make it a natural fit for the new Fund.

When Is the Right Time for Maghreb Integration?

Report from private sector offers recommendations

One of my initial reactions to the US-African Leaders Summit was noticing the seeming lack of integration between North and sub-Saharan Africa (SSA) when it came to the initiatives announced by President Obama. At a time when foreign assistance resources are declining globally and the lack of African cross-border trade and investment remains limited, there seems to be space for more emphasis on enabling the private sector to “grow Africa.” This was a primary message from Miriem Bensalah Chaqroun, President of the Moroccan Federation of Businesses (CGEM), who noted that multilateral and regional

Association of Moroccan Businesses

Association of Moroccan Businesses

organizations agree that this can only be achieved if governments heed the advice of the private sector regarding what needs to be done to free up the growth-promotion environment in Africa. Greatly reducing tariff and non-tariff barriers, promoting transnational infrastructure projects linking markets across borders, and business-labor-capital friendly regulations are some of the more obvious elements in a comprehensive growth strategy. These are among the issues targeted by King Mohammed VI as part of his “economic diplomacy” in Africa, echoing his calls for strengthening North-South ties on the continent.

This line of thinking brought me back to a report issued this past spring “Making the Case for Maghreb Business in Times of Change,” which is a background report and action plan for “A private sector strategy for a Maghreb Initiative of Commerce and Investment (IMCI).” The report highlights that the countries of the Arab Maghreb Union (AMU) – made up of Algeria, Libya, Mauritania, Morocco, and Tunisia– have very little intra-regional trade, similar to other regions on the continent. In addition, although the AMU countries may have squabbles among the members, as there are in East and Central Africa, the private sectors continue to advance projects for aligning commercial interests across the region.

If it is the common wisdom, documented in multiple studies, that the private sector – formal and informal businesses, labor, and civil society – produces more jobs annually than governments, then there is a compelling logic that the private sector is a central stakeholder in facilitating economic growth.

Enter the Union of Maghreb Employers (UME)

Regardless of political obstacles, employers associations in the AMU have historically been pioneers in promoting inter-Maghreb dialogue for growth. After continued roadblocks due to political conditions, in 2007, CAP (Algeria), LBC (Libya), UNPM (Mauritania), CGEM (Morocco), and UTICA (Tunisia) decided to establish the Maghreb Union of Employers (UME). Its goal is “Creating a predictable and growth-friendly regional business climate that would result in a double benefit: expanding trade and investment inside the Maghreb and promoting stronger economic ties with its neighborhood and global markets.”

Arab Maghreb Union

Arab Maghreb Union

The report, released at its annual meeting in Marrakech, takes into account the impact of the Arab Spring and presents recommendations for strategic steps in meetings the region’s needs for growth, opportunity, and jobs. The report highlights several troubling phenomena: the youth bulge requiring large number of new jobs for entrants into the economy; rapidly growing urbanization that is often unregulated and poorly accommodated; and desertification literally eroding the agricultural sector. These conditions have resulted in a growing informal sector, stagnation in labor productivity, and a mismatch between education and employment opportunities.

Structural Challenges in the Economy

Among the structural issues across the Maghreb, the report notes the “lack of trade complementarity,” in that there is a very low level of intra-regional trade, since most economies of the Maghreb are small markets with limited export diversification. The report also notes that there is “little integration into global production chains limiting the expansion of high value added manufacturing activities.” An associated problem is that trade patterns are largely driven by “proximity.” More that 60 percent of the region’s trade and investment is tied to the EU, and this dependence is a source of economic vulnerability, as was obvious during Europe’s economic downturn. As important when addressing global markets is the “lack of product diversification.” Aside from some progress in Morocco and Tunisia, the Maghreb has not expanded much beyond core commodity exports and some manufacturing of new products to export.

Another area for remediation is the negative impact of tariff and non-tariff barriers, such as excessive delays, paperwork, closures, and customs procedures that raise the cost of business and “limit the competitiveness and quality of products.” These obstacles to the free movement of goods, the lack of free movement of labor and capital, and the lack of cross-border infrastructure to speed shipments and transportation combine to hold back the region’s economic integration, “fragment regional value chains and impedes the diversification of the product base.”

Substantial Recommendations

Tourism driving investment across the region

Tourism driving investment across the region

After presenting a summary of the benefits and rationale for deeper integration, the report breaks out recommendations in three broad areas: connect markets through cross-border private-public partnerships on crucial infrastructure development; dismantle obstacles by identifying a limited number of “pilot sectors” where all five countries can agree on a deeper cooperation agenda; and encourage investment, particularly by ensuring that skilled workers are available to attract foreign and domestic investment. Each area is broken down by timelines and expected results that clearly indicate the intense interest of the private sector in playing a role in furthering economic development in the Maghreb. This report is definitely another tool for the region’s governments by which to develop their national strategies with a “Maghreb dimension.”