Morocco-US Businesses Set for Fall Meet-ups

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photo credit: Hector Alejandro

Events in Atlanta and Rabat Underscore Trade & Investment Opportunities

While other countries in the Middle East and North Africa (MENA) are struggling to get their economies on course, either because of downturns in commodity prices or political instability, Morocco continues to keep its focus on stimulating economic growth. One key part of that strategy is attracting higher levels of Foreign Direct Investment (FDI) and new export markets. It is clear that proactive trade and investment promotion takes more than getting listed on the internet or having a great website. These help, yet regardless of what “experts” might say about how to do business overseas, in our experience, more companies rely on what competitors and colleagues have to say than on “how to do business” materials.

This is why face-to-face contact is so important – despite cultural and language challenges. Morocco has been working over the past decade to improve its access to US markets through bilateral trade and investment delegations, trade shows, conferences, seminars, and exchange programs. Of course, just as US businesses struggle with French dominating Morocco’s business language, Moroccan companies are working to acquire staff and expertise in English. How does one measure success? One evident indicator of the growing mutual interest in US-Morocco trade and investment is the growing number of conferences being held in English in Morocco on topics ranging from tourism and renewable energy to ports infrastructure and medical equipment.

And in the US, the number of promotion events featuring Morocco is also increasing. For example, as part of a Middle East and North Africa Consultants Association (MENACA) program September 22-29 on doing business with Arab countries with Free Trade Agreements (FTAs), opportunities in Morocco will be presented to companies in Chicago, Milwaukee, Madison, and Minneapolis. These events include one-on-one sessions for businesses to meet with country representatives.

On to Atlanta and Rabat

Tangier-Med Port, Growing to be the largest on the Mediterranean

Tangier-Med Port, Growing to be the largest on the Mediterranean

On October 13, the US-Morocco Trade & Investment Forum will be held at the headquarters of Coca-Cola in Atlanta, GA. Building on the success of last year’s event in Dallas, the Forum will feature leaders from the government and private sector in five key areas: energy, including renewables; banking and financial services; agriculture; water management; and automobile and aeronautical manufacturing. The energy sector will be represented by senior officials from MASEN, the solar power agency; ONEE, the national water authority that overseas hydro and wind power projects; ADEREE, the country’s leading energy research and energy efficiency planning agency; and ONHYM, responsible for hydrocarbons and mining.

Manufacturing will feature US companies such as Boeing, Polydesign, and Morocco’s automobile trade association AMICA. Automobile and aircraft components are the fastest growing export segment in the country, providing thousands of jobs and attracting more than 300 suppliers to the major industrial parks in Tangier, Casablanca, and Kenitra. These facilities are well serviced by the transportation network in Morocco, including the Tangier-Med port, which continues its rapid growth, on schedule to be the largest container terminal handler on the Mediterranean.

Another strong performer in the Moroccan economy is the banking and financial services sector, which has benefited from the country’s conservative approach to managing its borrowing and budgets. In addition, Morocco has positioned itself successfully as a dynamic and comprehensive platform for doing business in Africa. Its airline flies to more than 30 African cities; its banks dominate customer services in seven countries; under the direction of King Mohammed VI, who has made economic relations with Africa a priority, more than 80 treaties have been signed with African countries covering economic and human development priorities; and more than a half-dozen African-centric conferences are held every year in Morocco on topics ranging from agriculture to security and investments.

The financial sector will be well-represented in Atlanta by the Casablanca Stock Exchange; CDG Capital, the leading public sector investor; Casablanca Finance City, the home of companies providing services for doing business in Africa; AMDI, the Moroccan investment development authority; and key banks, including Citigroup, Inc. With strong balance sheets, networks of contacts throughout the region, extensive links to US and multilateral financing and insurance agencies, and well-respected leadership, Morocco’s financial services sector will only continue to expand and be successful.

The following month, November 12-13, the Third Annual Morocco-US Business Development Conference, held under the auspices of the Economic Committee of the Morocco-US Strategic Dialogue, will give Moroccan companies the opportunity to engage their US counterparts in Rabat. The program will maximize opportunities for site visits, setting aside the first day for presentations and the second for travel to locations of solar and wind farm projects, as well as automobile manufacturing facilities. The energy and automotive manufacturing sectors will be highlighted in the program, and there will be a special session on doing business with Africa from Morocco.

Morocco is in a race to stay ahead of its competitors. Its evolving incentives for investors, growing sophistication in export production, and continuing improvements in the business environment are indicators that it is not taking anything for granted. American companies will find ready and qualified partners in Morocco.

 

Why Does Morocco Continue to Draw Foreign Investors?

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Defying Regional Trends, Country Benefits from Progressive Policies

Stagnation in the Chinese economy has had rapid repercussions throughout the global economy, leading many investors to step back from any significant activity until trends in emerging and frontier markets become less murky. Due to the outsized impact of China on commodity producers in Asia, the Middle East, and Africa, there is great uncertainty as to how it will play out in countries that rely on Chinese imports.

However, in recent rankings of key countries in Africa and the Middle East, Morocco’s continued positive performance serves as an antidote to investor pessimism regarding other markets in the region. In a study by fDi Intelligence, “Middle East and African Countries of the Future 2015/16,” Morocco receives points for rigorous planning, strong economic fundamentals, and continued investment in policies and infrastructure that are business-friendly.

Casablanca Finance City - Exceptional Platform for Business In Africa

Casablanca Finance City – Exceptional Platform for Business In Africa

If one compares Morocco to other countries in Africa with its diversity of economies, Morocco’s rankings are quite impressive. It ranks #3 in terms of overall results in the fDi poll, #2 (after South Africa) in terms of economic potential, #2 for connectivity, and #4 in Africa for business friendliness.

Much of this success is due to Morocco’s moderate and progressive economic policies and conservative approach to global financial markets. As importantly, Morocco’s ties to the EU and the US as trading partners partially insulate it from overexposure to economies under stress. According to an article in Bloomberg.com, countries with little exposure to Chinese trade and investment are currently faring much better than those tied more closely to China. India, Morocco, and Poland are the top three countries in the rankings based on their overall stability and performance over the past year.

These results were underscored in an article in livemint.com that explored the same issue of dependence on Chinese imports. “More than $8 trillion has been wiped off the value of shares worldwide as China’s move fueled speculation that a further slowdown in the world’s second-largest economy will undermine demand for raw materials from countries including Brazil and Russia.”

In its coverage of the Bloomberg study, the Wall Street Journal commented that the decline will affect frontier markets more than emerging markets in the longer term. The Journal also points out that the study “notes that the best-performing regions have been frontier Europe and Asia and highlights Bangladesh, Sri Lanka and Morocco as countries that have been kind to investors.”

To continue to attract needed Foreign Direct Investment, especially in its lucrative renewable energy sector, Morocco has drafted legislation to sweeten the terms under which it will purchase energy from independent producers. According to seenews.com “When adopted, the new law, bill number 58-15, will allow renewable energy producers to sell surplus electricity to establishments connected to the high voltage or very high voltage grid of ONEE, the state owned utility responsible for the provision of electricity as well as the operation of the transmission system. The proposed changes will also raise the minimum capacity of hydro power projects to 30 MW from 12 MW at present.”

What this means is that independent producers will have more customer options, including the government, for selling energy at regulated prices, thus simplifying economic models for determining the success of investments in renewable energy.

These liberalizing efforts and the rankings recently published continue to demonstrate that Morocco has made choices that both meet the country’s goals of greater participation in the global economy and benefit its economy by attracting investments that generate much-needed employment.

 

Morocco’s Long-term Water and Power Strategies are Paying Off

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photo credit: Marta P

Moving ahead at Regional and National Levels

Despite continuing warnings of ongoing water crises through the Middle East and North Africa (MENA), there are valuable examples for the region coming out of Morocco to combat evident shortages in groundwater supplies and related food and energy issues. This is a national priority for the country, and for several years now, through the efforts of OCP Group affiliates, more attention is being focused on the food-energy-water nexus that the US government has identified as one of the strategic areas to be addressed for reducing conflict and promoting development.

Through its Plan Vert Maroc, the government has instituted a broad range of programs for small and pmv 3large farms to increase the use of water conservation technologies, crops, and methods to husband the variable water resources that have a significant impact on Moroccan agriculture, which accounts for upwards of 20 percent of the country’s GDP.

Recent media reports also highlight what is going on in Morocco in both the energy and water sectors to plan more efficiently for the future. It is well known that “Morocco’s national energy strategy is targeting to raise the share of renewable energy to 42% of the total installed capacity in the country by 2020, with solar, wind and hydro each contributing 14%,” as detailed by seenews.com.

What is most important in its report is that the cost of solar-generated electricity is falling rapidly and may soon “achieve ‘grid parity,’ meaning that it will be able to generate power at a levelized cost of electricity (LCoE) at or below the cost of purchasing power from the electricity grid.” Given that subsidies for renewable technologies are a major barrier to utilizing more solar-based technologies, this is good news for the government and even better news for consumers.

Solar power presents opportunities for entrepreneurs

Solar power presents opportunities for entrepreneurs

There are many benefits of solar power, generated both by large facilities and smaller technologies being introduced to reduce energy costs for food producers. If costs are competitive with hydrocarbons, it has a broad impact, from reducing costs of harvesting, production, and distribution of crops, to conserving vital water resources – the nexus of food-energy-water.

According to the World Bank, “Water over-use is also a concern for Morocco, where farmers have increasingly shifted from diesel pumps to liquefied gas subsidized by the government.  Solar pumps could reduce costs for farmers by as much as two-thirds, depending on the regional cost of fuel.” This is part of a larger government strategy that ties subsidies to farmers for cost-saving solar equipment with micro-irrigation systems designed to reduce water consumption. “This way, the government ensures the efficient use of depleting water resources…In areas where water is scarce, the government could reduce equipment subsidies and encourage farmers to generate solar power for sale to the grid, like a cash crop in order to repay their portion of the loan.”

It is strategic policies put into action that encourage investors to look to Morocco, which again is a leader in Africa in attracting Foreign Direct Investment. According to MEED, Morocco is “regarded as safest and most stable in North Africa “despite being both smaller and less hydrocarbons-rich than its neighbour Algeria. Last year, Rabat was Africa’s third-largest recipient of FDI. The 67 projects it attracted accounted for 9.1 per cent of all new schemes in Africa and 9.5 per cent of all jobs created.”

Morocco’s has a remarkable and long-term commitment to dealing with issues such as energy costs and the efficiency of its agricultural sector; it also has an overall strategic vision as well as projects across sectors ranging from food and energy to tourism and technology. It is this that gives the country the competitive edge to be a leader in promoting economic growth in Africa.

First US-based Moroccan Design Showroom Opens

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Features Stunning Moroccan Handicrafts, Fashion, and Furnishings

In late spring, Fatema Marouane, Moroccan Minister of Handicrafts, Social Economy, and Solidarity, presided at the official opening of Morocco Premier Events (MPE), the first totally Moroccan design center in the US. While other design stores may feature a few handicrafts from Morocco or look-alikes from India, MPE is the real deal. Located in the Dulles Design Center in Sterling, VA, it is the brainchild of Hassan Samrhouni, the latest venture for this Moroccan-American entrepreneur who has been a force in community events for 25 years in the Washington, DC area.

The showroom is expansive, featuring a large central area with furnishings, crafts, design elements, sculptures incorporating age-old fossils, lamps of many types, cosmetics, rugs, and brass and nickel objects. There are separate sections featuring caftans, jewelry, and an impressive library. The common thread to all the items is that they are handmade– nothing is mass produced, supporting hundreds of artisan families in all parts of Morocco.

As you walk through the front entrance, you are greeted by fossils embedded in standing sculptures, modern designs featuring remnants of sea-life that existed in Erfoud—an oasis town in eastern Morocco– centuries ago. According to wiki voyage, “Erfoud is known for its precious and unique fossils. Back 500 million years ago, the Sahara Desert was under water. On the outskirts of Erfoud you can visit impressive fossil filled marble workshops and other type of fossil varieties such as trilobites and ammonites.”

There is a large collection of rugs, courtesy of Jouti Rugs, a store in Marrakech that boasts the largest collection of rugs and kilims from the Atlas Mountains and the Moroccan Sahara. More than 200 examples of their collection are available at MPE. The suppliers for the showroom were especially chosen by the Ministry to demonstrate the excellence of Moroccan artisanal crafts. There are several monitors in the showroom featuring videos prepared by the Ministry to highlight the artistry and workmanship behind the products on view.

Other partners of MPE include the Maison de l’Artisan, www.maisonartisan.ma, a key player in Morocco’s national plan, Vision 2015, to support and encourage local artisans. Included in the displays are brass lamps of imaginative and traditional design; wood boxes and design elements made from thuja, an aromatic evergreen from the Atlas Mountains; and a wide variety of candles, poofs, furniture finished with brass details, painted wood tables, mosaic tables, pillows, and even a television console covered in hammered brass.

To delight the senses even further, there are silver urns, coffee and tea pots and service sets, a art 2fountain waiting for someone’s garden or salon, and caftans of marvelous colors and patterns. Of particular interest are four caftans made in the 1950s on loan to the MPE from a private collection: a man’s three-piece ensemble tailored in Libya, a caftan from Alexandria, Egypt, a caftan featuring Jewish embroidery designs from Constantine in Algeria, and a classic Moroccan caftan.

There is also a unique story behind the Casablanca Secrets brand cosmetics: created by three Moroccan professional women with university jobs in medicine and the sciences who decided that there should be a full line of locally produced items. These are now being distributed throughout the US by MPE, including: skin cleaners and moisturizers, aromatic candles, lava clay facial scrubs, and massage oils.

Building Cultural Awareness and Building a Business

This has not been an easy quest. Design consultants and designers who would most appreciate the value of MPE’s showroom and supplier relations are difficult to access if you are not a member of a design center. Mr. Samrhouni has recruited Linda Kay Myers-Figley as his director of marketing, and she has contacts throughout the region in the design community, yet, it is still tough going.

For example, getting products certified for sale in the US requires meeting regulations for each item. It took 18 months of work for Casablanca Secrets to meet US certification requirements. The wondrous Moroccan lamps can’t be sold until they are UL certified, which means that anything that has come from Morocco has to be re-wired and inspected before it can be shipped.

art 1So there is an educational process going on, Americans learning about the value of one-of-a-kind artisanal products that are not bargain-priced; and Moroccans learning about labeling and certification standards that are part of doing business in the US.

In the meantime, MPE continues its outreach. School groups visit, getting to experience Morocco without leaving home. Arab radio broadcasts have been aired there. A French class from a local university had a session in the showroom. It is, as Linda Kay points out, a cultural center, a place to share about Morocco, its hospitality, and its vibrant society. And to round out its offerings, MPE provides a full line of special events services including catering, design environments, music, and programming.

As MPE grows, it will expand its capability to provide custom-made furniture, rugs, wood objects, and other products to meet specific designer needs. There is still a lot of learning going on regarding shipping, customs, finding reliable distributors, and linking up with even more suppliers in Morocco who have the ability to meet the quality and quantity criteria of MPE. It is an important milestone in continuing to join these oldest of allies together through the expression of Moroccan culture by its best ambassadors – its artisans.

Morocco in Africa – Delivering the Bread Basket

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Feeding Africa’s Explosive Growth Requires Regional Cooperation

Recent articles underscore the importance of Morocco’s initiatives in West and Central Africa, specifically in the agricultural sector. In a World Bank blog, Jean-Christophe Maur, a Senior Economist in the Growth and Competitiveness Program at the World Bank Institute, argues that the Economic Community of West African States (ECOWAS), which enjoys a strong working relationship with Morocco, must do more to promote regional solutions. His blog, Feeding West Africa: An Agenda for Regional Trade, points out that “In West Africa, home of nearly 300 million people, agriculture employs 60% of the labor force. However, despite great potential, the region is increasingly dependent on food imports to meet its consumption needs; food imports have more than tripled in the past 10 years.”

This fact alone emphasizes the importance of King Mohammed VI’s initiatives to enhance agricultural cooperation with ECOWAS states (Burkina Faso, Ghana, Togo, Benin, Nigeria and Niger) as well as neighbors throughout Central and West Africa. Over the past three years, he has visited more than a dozen African countries, and signed agreements related to agriculture and human development that include Moroccan services and resources integral to a regional strategy of collaboration.

As Maur sees it, “Not exploiting regional complementarities represents a missed opportunity. West Africa can help feed itself. The physical nature of West Africa’s agro-ecological zones alone provides a strong rationale for regional collaboration, with soil and rainfall patterns cutting across neighboring countries and creating natural, cross-border economic markets.”

And what is Morocco’s role in this? On the macro level, its annual International Agricultural Exhibition (SIAM) in Meknes each spring brings together farmers, scientists, companies, experts, government officials, and water/irrigation specialists, among others, from all over Africa and elsewhere to discuss latest developments to improve productivity and sustainability of agricultural sectors in Morocco and Africa.

In an address to the African Development Bank, King Mohammed VI spoke to the need “to ensure food security for all our African peoples and to reduce our dependence…through the creation of a common African agricultural market.” Since the agricultural sector employs close to half of Morocco’s labor force and provides up to 19 percent of the country’s GDP, it is a national priority. The outsized role of agriculture means that it has a significant impact on the economy in general.

This is similarly true in West Africa, which would gain significant benefits from closer collaboration in the sector. As Maur wrote, “A more regional approach towards agricultural policy would bring countries the familiar gains from trade, including lower prices and greater variety for consumers, higher prices for producers in many cases, as well as solidarity mechanisms through which excess supply can easily connect with excess demand anywhere in the region.” With more attention to addressing challenges regionally, greater resources and efficiency can be realized that would “boost yields and generate productivity gains that can be transmitted all along the value chain.”

Morocco Adds Value to the Supply Chain

OCP Group provides crop specific fertilizer for Africa

OCP Group provides crop specific fertilizer for Africa

Morocco is already having an impact on the agricultural sector by providing greater access to fertilizers tailored specifically for African markets. Business leaders accompanied the king on his visits to African countries, and OCP, the phosphates giant, has been leading the charge on agricultural cooperation. Of particular note is a MOU signed with Gabon that provides for a pooling of Gabonese gas resources and Moroccan phosphoric acid production units in Gabon and Morocco, which, together with a total capacity of two million tons of fertilizer, will “eventually have the ability to cover at least 30% of the continent’s total demand. Fertilizer products will be marketed and transported from Morocco and Gabon through regional distribution channels which will also be boosted as a result.”

This initiative was noted in an article by Francis Ghilès, an Associate Senior Researcher at the Barcelona Centre for International Affairs: Morocco‘s Progress is Slow, Shaky but Real. He wrote that “OCP Group is seeking to bring African producers of raw materials and feedstock together, bypassing the tradi­tional role of Western companies in the value added chain: phosphates from Morocco, gas and potash from other Afri­can countries could be marshalled to manufacture fertilizers in Africa at an affordable price for local farmers. Fertilizer prices on the continent are among the highest in the world and, as a result, farmers use a fraction of what their peers elsewhere use. Meanwhile the percentage of arable land is declining while the population is surging.”

The article points out that OCP Group has become a world leader in the industry and has gradually moved from producing phosphate rock as a commodity up the value chain to phosphoric acids and fertilizers, and is increasing its role in Africa, “the company’s other new fron­tier. Food production and processing may be more recession-proof than other sectors as world population continues to increase and millions of people are lifted out of dire poverty.”

While analysts often comment on the vibrant growth in Africa and how its population is projected to double by 2050, less has been written about the food-energy-water nexus that is critical to balanced and sustainable growth in Africa. Morocco is demonstrating that it shares its future with the continent and is committed to the survival and success of African countries, as neighbors, markets, and partners.

Morocco, Elections, and Hi Tech – What is the Common Link?

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It’s election season in Morocco, and the political parties are working hard to get out the vote. What makes these elections so special is that they are the first to be held under the 2011 Constitution’s provision for enhanced regionalization, by which local and regional authorities will have new budgetary and administrative powers previously held by the central government. In addition, for the first time, representatives of the regional councils will be directly elected, giving their constituents a stronger voice in managing local issues.

According to local observers, the Ministry of the Interior, which oversees municipal and regional matters, has developed an innovative text messaging form to link voters to their designated polling stations, ending the confusion of previous years where printed lists at each station had to be consulted for the right locations.

In addition, the political parties hunting for success on September 4th in the more than 31,000 seats being contested locally and 678 seats on the regional councils are using social media widely to spread their appeals. Given that there are at least 30 registered political parties vying for seats, it is no surprise that the ratio of candidates to positions is quite high – more than 4:1 in local elections and more than 10:1 for the regional councils. Parties have created on-line videos on YouTube, are live-streaming rallies and events, and broadening their outreach beyond their traditional districts.

One of the factors piquing voter interest is a new on-line program that brings questions from citizens directly to members of parliament, eventually to be extended to other elected officials. Developed by Andrew Mandelbaum, formerly of the US Institute for Peace and the National Democratic Institute, who speaks French, Arabic, and Moroccan colloquial Arabic, the site comes out of his long experience in governance programs in Morocco. He is concerned that “Citizens really rarely see a member of parliament actually answer to their needs and they have very few ways to transmit their needs to elected officials.” ­­­­

nouabook1Given his concern with this “trust gap,” he teamed up with Hind Kabaj, a Moroccan with previous US experience, to create SimSim-Participation Citoyenne’s website Nouabook.com, which means “My MPs” in the local dialect. To date, they have been able to introduce this free service throughout Morocco, garnering hundreds of inquiries that were transmitted directly to the MPs. What was surprising was the number of MPs who have responded and recognize the value of this form of citizen engagement.

While democracy is definitely in its developmental stage in Morocco, and there are few predictions about voter turnout or outcomes, there is a growing sense that Moroccans will heed the King’s recent call that “Citizens should vote for competent, credible candidates, who are committed to serving the public good…Voting is a right and a national duty, a major responsibility that has to be shouldered. It is a tool in your hands; you either use it to change the daily management of your affairs or to maintain the status quo, good or bad.”

Strong words that underscore the King’s commitment to proactively moving Morocco forward on its transition as a liberalizing democracy.