Morocco Continues to Attract Investments in Manufacturing

Expands potential for supply chain job-creation

Morocco continues to strengthen its position as a leading platform for business development in Africa with the announcement of two new manufacturing investments. Although one usually doesn’t connect Morocco with the Farnborough Air Show, that’s where the announcements were made by Moroccan Minister of Industry, Trade, Investment, and the Digital Economy, Moulay Hafid ElAlamy. And the investments are significant not only for the direct jobs that will be created but also for the hundreds more that will be generated by those companies supplying the facilities – ranging from commissary and cleaning services to housing and transportation for employees.

 

Moroccan minister El Alamy

Moroccan Minister of Trade, Investment, Industry, and Digital Technology, Moulay Hafid ElAlamy, leads efforts to attract FDI

Aerolia, an Airbus Group subsidiary, will set up an assembly unit for large subassemblies and complex aero-structures as part of its global operations serving Airbus and other manufacturers. A significant factor in its decision is the growing opportunities in the aeronautics market in Morocco, which now includes Boeing, Embraer, Dassault Aviation, United Technologies, and Bombardier, with most operations in the industrial zones around Casablanca. The investment is valued at some $54 million and, in its first phase, will create 500 direct and 500 indirect jobs. As business expands, the company expects to increase its labor force and capacity.

Alcoa, which has a global presence in lightweight metal technology R&D, design, and manufacturing, will be expanding its existing presence in Morocco through an investment of more than $6 million in its Alcoa Fastening Systems Division, which will be expanding its business lines and attracting new customers for its precision fasteners, titanium fittings, and other products. Funds will be invested over two years, resulting in 250 direct jobs.

Recipe for Success

These investments follow on the heels of the recently announced $12 million facility being constructed by Eaton for its new production facility in Casablanca, which will employ about 300 Moroccans to manufacture circuit breakers and other telecoms components. How has Morocco been able to continue to attract aerospace, automotive, and electronics companies? By following the dictum, make it worth their while. Morocco has many incentives, including tax breaks and subsidies, which ease the start-up and maintenance costs of operations. As importantly, for companies that require highly-skilled workers, Morocco has set up the Moroccan Aerospace Institute (IMA) where employers, government, and other stakeholders design and develop skills -training programs to ensure a steady stream of qualified employees.

Jobs in aerospace industry

Jobs for Moroccans extend from basic services to high tech manufacturing

Morocco directly benefits from the presence of global companies, which, in turn, attracts other quality corporations. Additionally, there are many opportunities for job creation for Moroccan companies serving as the supply chains for these companies. Just as call centers in Morocco spun off home grown IT programming and IT design companies, large manufacturers increasingly need to source locally to contain costs. By engaging these international companies as potential customers, Moroccan entrepreneurs can create new lines of business and jobs locally. Increasingly, the government of Morocco understands that all stakeholders have to be part of planning if Moroccan companies are to take a greater role in the future growth of the country. By streamlining the regulatory environment, building stronger sources of domestic private investment, and reducing burdens on small and medium sized companies, Morocco will drive the success of the manufacturing sector from supply to output.

Fitch Ratings: Morocco Shows Resilience and Growth since Arab Spring

 Leads in Investments and Economic Indicators in North Africa

A new report from Fitch Ratings offers strong praise for the social and political stability Morocco has demonstrated “since the start of the Arab Spring in early 2011,” comparing it favorably with its neighbors, even the hopeful success story in Tunisia. The report notes: “The smoother political transition in Morocco was aided by a tradition of political pluralism, the permanence of the monarchy (with King Mohammed VI seen as a reformer and legitimate among the population), and economic and social reforms started after the accession of the King to the throne in 1999. Stability in Morocco has supported growing tourist arrivals (which reached 10 million in 2013) and FDI inflows.”

The results confirm that Morocco has moved from a sedentary and often reactive economic player to one that is gaining a global reputation for business savvy. Since the accession of King Mohammed VI, there has been a country-wide campaign to build a stronger, more dynamic domestic economy capable of competing globally. To compensate for its status as the largest energy importer on the continent, Morocco is attracting international consortia to a host of renewable energy projects ranging from solar and wind to improved hydro and even nuclear options.

Morocco's infrastructure supports regional business leadership

Morocco builds infrastructure to support regional business platform

As the Fitch Ratings Report indicates: “Ratings dynamics in Tunisia and Morocco will crucially depend on their ability to narrow twin deficits [budget and current accounts], rebuild policy buffers, implement reforms and accelerate growth. In Morocco, the Stable Outlook anticipates a gradual narrowing of the twin deficits, supported by continuing reforms.”

At the top of the economic reform agenda for Parliament is restructuring the compensation and pension systems, redrawing land management and ownership guidelines, and migrating to more efficient electronic processing of trade-related documents.

With the launch of Casablanca Finance City, expansion of the Tangier-Med Port, and investments in emerging urban and transit centers, Morocco is increasingly attractive for international investments due to its stability, reputable and functioning business infrastructure, and strong ties and good relations throughout the western half of Africa.

The latter was underscored by King Mohammed VI’s four-nation Africa tour earlier this year, where the Moroccan leader presided over the signing of more than 80 agreements across diverse sectors including agriculture, financial services, tourism, transportation, and trade and investment facilitation. Domestically, Morocco continues to introduce and implement legislation that bodes well for its economic future. “Social and political stability has allowed the authorities to implement potentially difficult reforms, as illustrated by the gradual increase in subsidised energy prices,” comments the Fitch Report.

Morocco has energetically revived its reputation as a business crossroads for a market of one billion customers in Europe, the Middle East, and Africa. Investors and companies will be assured by the assessment of Fitch Ratings and others that Morocco is the place to be to do business throughout the region stretching along the Atlantic coast and into the interior of Africa.

 

New Reports on Africa Highlight Areas of Opportunity and Obstacles to Growth

Ahead of US-Africa Leaders Summit in Washington, DC, August 5-6, Overall Picture Promising, Yet Challenges Continue

Several recent publications have put the challenging road to prosperity for Africa center stage. The most thorough assessment is in the 2014 Economic Outlook published by the African Development Bank (AfDB). It is comprehensive, covering all 54 African countries.

Every year, the publication revolves around a central theme. This year’s “Global Value Chains and Africa’s Industrialization” takes a hard look at how African economies need to move beyond exports of commodities and marginal agricultural and industrial sectors to meet growth targets. The report combines the overall theme with local data, sifting it through reports by multinational organizations and analysts to move beyond rhetoric to realism. Recommendations include praise for what has been done, and also what will accelerate progress towards each country’s largely self-defined goals.

Invest in Africa report 2014

AU – Invest in Africa 2014

Another publication is “Invest in Africa 2014,” supported by the African Union but published independently by News Desk Media. Unfortunately, Morocco is not a member of the AU; thus the report is missing data and narrative from the second largest investor in Africa. Also absent is an in-depth look at cross-border investment opportunities.

The AU report was previewed in a program at the US Chamber this week with remarks from the AU, US officials, and African Ambassadors to the US. Comments during the panel “Opportunities across the Continent” were striking in their similarity: From infrastructure and renewable energy to value-added agriculture and resource management, the key priorities were consistent from north to south, east to west.

In introducing the program, Ambassador Don Gips, who co-chairs the Africa Business Initiative at the Chamber, focused on the upcoming US-Africa Leaders Summit in Washington, DC August 5-6, which will include separate private-sector elements: a Young African Leaders Initiative (YALI) meeting and a CEOs Forum. He said that the US goal is to increase US interest and investment in Africa. Yet, as a commentary issued by Brookings Institution pointed out, there are many challenges to a successful summit, especially the need for the African leaders to come with a unified, coherent agenda.

What Africa Needs and Wants

Peter Barlerin, Acting US Deputy Assistant Secretary of State highlighted several positive indicators for Africa, including its rapid growth rate and young human resources. He also noted challenges, such as dealing with jobs and youth employment within an inclusive growth strategy. Mr. Barlerin emphasized the critical importance of involving the private sector and taking advantage of Africa’s resources in agriculture.

Regarding negative perceptions of the continent, Olajobi Makinwa, Head of Transparency & Anti-Corruption Initiatives at the UN Global Compact, pointed out that government and stakeholders must confront gender and youth issues. She characterized government transparency regimes as “some good, some are bad, getting worse.” Ms. Makinwa said collaboration among public and private sectors and civil society is needed to support human rights and accountability.

Ambassador Girma Birru of Ethiopia began the conversation on investment opportunities, mentioning agriculture and food industries followed by infrastructure, including power and railways, and value-added manufacturing. Ambassador Steve Matenje of Malawi spoke about factoring in climate change in assessing the agriculture sector — gauging its effect on crop varieties and water management. Matenje also noted related opportunities in livestock and fisheries. Power and, especially, transportation linkages in roads, rail, and aviation are on his infrastructure list. Ambassador Matenje highlighted the importance of attracting young people to the huge potential in agriculture and paying close attention to gender inclusion.

Obama Speaks about Upcoming US-African Leaders Meeting

African Leaders to meet in US August 5-6, 2014

Ambassador Bockari Stevens of Sierra Leone repeated the need for transportation links among the countries in West Africa, along with added-value mining, attention to fisheries and airport management to meet growing demands, and opening new efforts in promoting financial services. Ambassador Daouda Diabaté of Côte d’Ivoire, chair of the African Ambassadors in the US, concluded the panel with comments related to the importance of peace and security for enabling economic growth, and the priority that West Africa is placing on highway linkages and greater economic integration. He restated the importance of utilizing the vast arable land resources of Africa to end the dichotomy of the co-existence of farmland and famine.
The Case for Morocco

Although the AU report does not include Morocco, the country’s economic progress is much more than a footnote to Africa’s development profile. While Morocco continues to work hard to meet its own Millennium Development Goals, its prognosis is largely positive, according to the AfDB report. “Overall, Morocco’s performance has been encouraging and benefited from a context of political and social stability.”

Morocco’s strongest asset for investors is that it is stable, has a reputable and functioning business infrastructure, and very good relations throughout the western half of Africa. On the macro-level, swings in Morocco’s GDP have been more a function of the disproportionate impact of poor harvests on the economy than systemic issues. And Morocco is moving to “spread the risks” by attracting greater investments in manufacturing, tourism, and service industries for a more balanced economy.

Morocco is also working to improve government efficiency and its effectiveness in attracting high value investments to generate high value jobs. Its trade balance continues to benefit from increases in exports of high-value products, although traditional sectors such as textiles suffer from poor consumer demand from Europe. Most importantly, based on the government’s agenda, Morocco knows where it needs to go. “Improvements to the support system for the private sector are needed and must still be implemented, in particular for land management, training, financing (especially for SMEs), and removal of bureaucratic red tape, as well as in the fight against corruption.” Recent initiatives such as the constitutionally mandated Economic, Social, and Environmental Council (CESE); Council on Higher Education, Training and Scientific Research; and the Competitiveness Council, made up of stakeholders, specialists, and government, underscore Morocco’s commitment to do it right.

Companies turning to Morocco to do business in Africa

Morocco is cited for strong business environment

The AfDB report is not the only external source to recognize Morocco’s continued progress as a home for global business. The Heritage Foundation’s 2013 Index of Economic Freedom report place Morocco ahead of Thailand, Indonesia, Russia, and Luxembourg based on the steps it has taken to date. Much more is expected of Morocco, and all indications are that it is ready to deliver a first-class business relationship, both as a destination for investment and as a hub for the region as a whole.

AmCham Morocco Opens US Campaign for Bilateral Trade & Investment

Delegation visits Washington, DC touting new projects and expanded business

 The American Chamber (AmCham) of Morocco, an affiliate of the US Chamber of Commerce, recently visited Washington, DC to meet with US government officials, businesses, and trade associations to brief them on the latest business opportunities. These delegations, where members meet with both public and private sectors to discuss opportunities as well as the challenges to increased transactions, are called “Door Knock Campaigns.”

This is the first Door Knock from Morocco since the AmCham was founded in 1966, coming at a time when the US-Morocco Free Trade Agreement (FTA) is entering its final phase of implementation, and Morocco is looking to rapidly increase its exports to the US and highlight investment projects in the kingdom. US government meetings included the Commerce and Treasury Departments and the US Trade Representative (USTR). Briefings were held at the US Chamber and at Citi, providing fresh information on how US companies can participate in Morocco’s vibrant business sector.

Rising from the Atlantic Beaches                   

A particularly attractive project is the Zenata Eco City (www.zenataecocity.ma), being built between Casablanca and Mohammedia. Almost a year ago, the government unveiled detailed plans for the project that was chartered in 2006. After years of study by teams of Moroccans and international consultants, the master plan outlined a sustainable eco city, the first in Africa, which is being designed, built, and managed to international environmental standards.

AmCham Delegation members

AmCham Team L to R: Mohammed El Hajhouj, General Manager, Zenata Eco City; Walter Siouffi, President, AmCham Morocco, Chairman & CEO Citibank Maghreb; and Mohammed Naciri, Business Development Manaager, Zenata

Among the initial projects already awarded are what will be the largest shopping mall in Morocco and Africa, several middle-class housing complexes, and land preparation for sports, education, and health centers. It will have a multimodal train station, a subway/tram connecting it to Casablanca’s system, and direct access to the country’s multilane motorway. Mohammed El Hajhouj and Mohammed Naciri, who are the team leading the US presentations, are already interviewing US universities and medical facilities managers to encourage them to bid on the upcoming tenders for the education and health centers. Zenata’s developers are generating requests for proposals (RFPs) that they believe will be attractive to the leading companies in the specific sectors.

Particularly keen to attract US companies, the Zenata team is planning a fall US road show to promote particular attention to the education and health zones in the city, where the latest best practices will be featured.

Building the Business Network

A particular emphasis of the delegation was to detail how Morocco serves as a platform for three continents, Africa, Asia, and Europe, due to its location, infrastructure, human resources, and extensive business contacts throughout the region. Julianne Furman, the CEO of Polydesign Systems, enthusiastically described how her automotive parts manufacturing company, with 18 years of experience in country, participates on the board of the automotive training centers where they are fully involved in Morocco’s programs to develop skills and talents needed for their industry. Polydesign exports globally from its hub in Tangier Free Zone.

The Casablanca Finance City, designed as a financial services center for Africa, has already attracted 43 international companies as tenants, and is ranked as the second most important financial services hub in Africa, before even taking up its new premises. Abdeslam Taadi of Attijariwafa Bank spoke about his company’s extensive banking interests in francophone Africa, where Moroccan banks are present as top tier institutions. And other delegation members spoke regarding Morocco’s role in the export of agricultural and consumer products.

The delegation was led by Walter Siouffi, chairman of the board and the CEO of Citibank Maghreb; Azzedine Kettani, board member and CEO of Kettani Law Firm, one of the original leaders of the Moroccan-American Trade and Investment Council (MATIC); and Rabia El Alama, the Managing Director of the AmCham.

Although Morocco may appear to be a small market of 34 million people, its 44 preferential free trade agreements, low labor costs, excellent transportation and logistics systems, strong financial services capabilities, and overall positive business environment make it an ideal platform for a regional market of a billion consumers.

King of Morocco Speaks to Europe on His Vision for Building Africa’s Future

*Calls for Enhancing Regional Cooperation on Concrete Projects to Promote Stability and Prosperity*

King Mohammed VI addressed the 4th Africa-EU Summit on the need to cooperate to “enhance stability, security, and prosperity on both our continents.” His remarks are particularly important given his active outreach to African countries since his accession to the throne 15 years ago. In addition to forgiving the debts of the poorest African countries more than 10 years ago, Morocco provides thousands of scholarships annually to African university students, has extensive private sector investments in many countries, is linked by Air Maroc to more than 3 dozen African cities, and the king travels frequently through the region.

He spoke several times about the need to accelerate human development efforts to provide “a better future for our respective populations [EU, Africa], meet their legitimate aspirations, and fulfill their ambitions.” And Morocco is putting concrete actions behind these words. More than 80 agreements were signed with Mali, Guinea, Gabon, and Cote d’Ivoire during the king’s recent visits, many of which call for public-private sector partnerships for implementation.

King of Morocco in Cote d'Ivoire

King of Morocco in Cote d’Ivoire

A key focus of these pacts is recognizing that Africa has many of the assets and human and material resources needed to achieve equitable, sustainable, and rapid development. Morocco’s strategy, according to the king “is marked by a significant increase in Morocco’s public and private investment in Africa, which enhances the value of local production, revamps the economy, and contributes to sustainable job creation.” Today, more than half of Morocco’s overseas investments are in Africa, up from less than 20 percent 10 years ago.

 Benefits of Sustainable and Integrated Development

Another critical value of Morocco’s Africa strategy is that it provides a framework for broader regional economic integration. “[Morocco’s] proactive strategy seeks to ensure the joint implementation of flagship projects of regional – even continental – significance in such areas as access to electricity and drinking water and the promotion of trade, investment, and food security.” He mentions Morocco’s efforts within CEN-SAD, the Economic Community of West African States (ECOWAS), the West African Economic and Monetary Union (UEMOA), the Economic Community of Central African States (ECCAS), the Economic and Monetary Community of Central Africa (CEMAC), and the Conference of African States Bordering the Atlantic Ocean as examples of Morocco’s commitment to coordinated, regional development.

Regarding relations with the EU and beyond, the king commented that “This proactive policy…is not inconsistent…with the concomitant consolidation of Africa’s mutually beneficial relationship with its numerous partners, especially with the European Union and EU member states. In fact, the two processes enrich and harmoniously supplement one another.” He went on to discuss how broad ties of North-South cooperation are key to promoting security, stability, and prosperity for both continents. Along with the emphasis on economic collaboration, King Mohammed spoke out strongly about the need for continued efforts to “combat the transnational threats to peace and security, wherever they may be in the continent.” In tandem with counterterrorism, he believes that much must be done to mitigate migration-related challenges and noted the need for “an ‘African Alliance for Migration and Development’ which safeguards humanitarian principles and stresses the duties of origin, transit, and host countries” — a challenging issue that Morocco is addressing proactively.

 Overcoming Conflicts, Building Together for Results

The ongoing conflicts among diverse African peoples are also on the king’s agenda. In addition to human development needs in education and training, health and social services, women’s rights, and youth employment, the king said that “it is essential to promote the ideals of openness and tolerance so as to provide a comprehensive and sustainable response to the threat of insecurity and terrorism hanging over large areas of the continent.” And he pledged that Morocco will continue to advocate “an innovative, equitable, and mutually beneficial partnership between a united Europe and an emerging Africa.”

The king concluded with a challenge to all participants. “I also hope our partnership will match words with joint actions and give concrete substance to projects and opportunities for development, closer ties, and greater exchange relations.” It is clear from the king’s speech that Morocco is firmly committed to its path of regional and international cooperation. Given his pro-active agenda throughout Africa, Morocco should emerge as a partner of choice in global efforts to promote and sustain economic and human development on the continent.

Morocco Gathers Recognition as Gateway to Africa

*Report from Thomas More Institut Praises Morocco’s Efforts*

Yet another prominent source has issued a report noting the importance of Casablanca Finance City’s strategic role in Morocco’s campaign to become a key center for business development in Africa. The Thomas More Institut, with offices in Paris and Brussels, recently published, in its Tribune series, the report Morocco: The Hub of African Financial Integration?” Although the question is rhetorical, it is important to have a clear understanding of Morocco’s capacity to build the legal, financial, physical, and services infrastructure required for such an undertaking.

The report was authored by Paul Goldschmidt, whose 50+ year career spans leadership roles at Goldman Sachs, the European Commission, and the European Investment Fund – someone intimately acquainted with the challenges Morocco faces. His assessment is that Africa has great potential as well as challenges, and it is international and regional partnerships with expertise and local sensitivities that are key elements in realizing its future. Among Africa’s strengths he mentions: high economic growth rate, young population feeding a growing workforce, and extensive natural resources that provide the engines for future growth, if harnessed effectively leading to a diversified economy. He mentioned the key role of “its untapped land reserves which are amongst the most important in the world (estimated at about 60%).”

Thomas More Institut report on Morocco in Africa

Institut Reviews Morocco’s Financial Leadership in Africa

Among the most significant challenges Africa faces is grinding poverty that depletes its human resources as “47% of the sub-saharan Africa inhabitants still live under the poverty threshold (1.25 dollar PPP/day).” This has generated enormous demands on social services, education, savings, and technical and physical infrastructure. In addition, the unstable political context continues to undermine efforts to attract investors and upgrade human resources. Finally, Goldschmidt notes the “persistence of endemic corruption” abetted by the “weaknesses of institutions guaranteeing the rule of law” that discourages investors and the “misappropriation of a large part of the economic benefits in favour of a privileged few at the expense of the vast majority of the local populations.”

Improving Africa’s Investment Environment

At the top of the requirements identified by Goldschmidt is the need to strengthen institutions through significant reforms, coordination with international organizations, and improving human assets. There is a similar need to make large-scale investments in physical infrastructure across all sectors, especially energy and transport, which are needed to add value to the exploitation of natural resources. “According to the World Bank, the continent’s needs for infrastructure alone are in the order of 93 billion dollars annually.” The development of effective financial services for local and international players is mentioned as a necessary vehicle for ensuring the long-term “improvement in living standards that should result from [Africa’s] development potential.”

It is this analysis that leads Goldschmidt to conclude that Morocco is “the African country that best meets all these criteria,” which he defines as “a stable political environment, an optimal geographic position relying on efficient physical infrastructures, an operational legal framework, and a sufficiently development infrastructure of services…” As a result, he believes that Morocco should “constitute the location of choice for establishing decision centres covering the continent as a whole.” He dismisses the notion that North Africa is somehow distinct from the rest of Africa, stating “Quite to the contrary, Morocco has the potential of becoming a financial hub of major importance for the development of the entire African continent.”

It is Morocco’s economic performance over the past 20+ years that gives it this prominent role. It has established preferential trade agreements affecting more than 50 countries; it has direct access to international financial markets; it is emerging as a player in Islamic finance; it enjoys close economic and diplomatic relations with the EU, Middle East, and throughout central and west Africa; and it has adopted a long-term strategy to serve as a major hub for African business development exemplified by the Casablanca Finance City (CFC) and the King’s visits to countries throughout the region.

CFC is clear in its mission – to become the major financial and economic hub in the region, stretching from Francophone Africa down the Atlantic coast. It has operationalized international standards for attracting investors, protecting investments, and bridging project services from conception to implementation. Morocco has more than 60 double taxation agreements and more than two dozen agreements for the protection of investments. Its administrative arm, the CFC Authority (CFCA) has partnership agreements with financial centers in Singapore, Luxembourg, London, and Paris  — “evidence of the trust and support of those countries in CFC’s vision, and the belief that Morocco has important strategic strengths justifying its position as an economic and financial hub.”

As the report concludes, “Even if there is obvious room for further improvement in specific areas, no other centre in Africa offers today such a complete range of benefits for initiating in a conducive environment, the many product investment opportunities in Africa.” Morocco’s strong efforts to enhance its regional role through maximizing its presence as a financial services center, coupled with its continuing internal economic, judicial, and labor reforms are critical ingredients in positioning itself as the location and partner of choice for business in Africa.

Unemployment Numbers Mask Job Solutions

In an interview published in the newspaper “L’Economiste,” Moroccan Minister of Employment and Social Affairs Abdeslam Seddiki, made it clear that “to solve the problem of unemployment, we should not count only on growth.”

He went on to say that “according to estimates, 1 percent of growth rate generates an average of 30,000 jobs, and we have a labor market that is witnessing an annual arrival of 180,000 job applications. To meet these arrivals, we need a growth rate of 6 percent, without including the existing stock of unemployed people.”

He pledged to work towards “setting the balance between innovative investment” and those in more traditional sectors that produce direct jobs and “investment in infrastructure that creates indirect employment.”

This distinction is quite important, particularly in the high tech and tourism sectors, since they often create many more indirect jobs than the core employment generate by a specific project.

For example, both high tech and tourism projects have three phases: development, start-up, and operations. During development, many of the employees are related to the planning phase, are engaged off-site and overseas, may be largely expatriates, and perform high-value and capital intensive (as opposed to labor intensive) functions.

Abdeslam SeddikiStart-up requires looking to a broader employment pool to attract qualified expatriate and local employees to provide the services required to bring the project to the operational stage. These workers may or may not stay with the project beyond the short and medium term as their special skills are not needed once the project is up and running.

It is during the operations phase that most long-term jobs are created because other functions are needed, ranging from logistics and maintenance support to marketing and packaging, household services, administrative tasks, and whatever else is needed to sustain the project.

Operations management looks to purchase local goods and services from the most cost-efficient and acceptable sources, thus creating opportunities for indirect jobs that support the project in the functional areas mentioned above.

This is where government programs that promote local business development can play a facilitating role as a broker between the project and the skills and resources available locally.

Morocco is moving in this direction as the Ministry of Employment and Social Affairs is focusing government training programs on a more collaborative relationship with investors in order to anticipate what jobs and local companies will be needed by various projects over the medium and long term.

Government plays a key role in enabling job growth

This is also the target of entrepreneurs in Morocco – finding where opportunities exist locally, regionally, and internationally for their products and services.

Saad Jennane, founder of Kipintouch (left), with Abdelhamid Chakiri of Shorein, Mehdi Tamli of Secret4sale, and Meryem Bennani of Creative Group. Wamda

At the recent Casablanca-based New Work Labs competition called PitchLab, the winner, Kipintouch’s founder Saad Jennane noted that Moroccan entrepreneurs must have a global mindset, not just focused on Morocco.

“We can target the world or an entire region like the Middle East.”

As I have written previously, without an enabling environment, from access to finance and administrative support to friendly legal and regulatory regimes, obstacles will force entrepreneurs to abandon their efforts.

A second major area on which the government is focusing its efforts is the informal sector in Morocco. With an estimated value equivalent to 60 percent of Morocco’s GDP, bringing the informal sector into the marketplace through ease of entry regulations that encourage and reward these small firms will formalize the tens of thousands of informal jobs that are outside the country’s official employment roles.

This would have three immediate impacts: increased tax revenue and participation in social security and related programs, increased opportunities for collaboration among these largely micro-enterprises to enable them to have access to banking and administrative services, and, most importantly, for those with ambition, to provide the means for growth by attracting funding to expand their businesses.

The government’s role in ensuring a positive and business-friendly regulatory environment and in making training and resources accessible is vital and critical to the success of this effort.

The Minister, who noted that the “pressure on the labor market is still high, said that his department can act immediately on existing employment creation policies, namely the Taehil, the Idmaj and Moukawalati programs.

The Taehil program provides pre-employment training partly paid by the government with private sector partners. The Idmaj provides employment training for those with disabilities; and the Moukawalati project is the core entrepreneurship program in Morocco that is built on a public-private sector partnership.

Through greater collaboration with the private sector, more involvement of industry in boosting local sources and skills, and with increased joint investments in training, education, and entrepreneurship development, Morocco can generate the growth in jobs that will meet its needs in the coming decade.

Originally posted at Morocco on the Move. Slideshow photo of Twin Center in Casablanca by YoTut/Flickr.

King of Morocco Promotes Development in Africa by Africa

While much of the news coverage of Western and Central Africa focuses either on security concerns or problems related to balanced growth, the King of Morocco took the debate in another direction, all but unnoticed in the Western media. At the Moroccan-Ivorian Economic Forum, which opened in Abidjan on February 24, King Mohammed VI laid out a compelling vision for Africa’s development. He said that “Today, it is the economic dimension which predominates. It is a crucial component of diplomatic relations. At one time, cooperation was based on trust and on historical ties. Today, it increasingly hinges on efficiency, performance, and credibility.”

The King is concerned that too much time is spent on political discussions rather than concrete actions to spur development. With respect to credibility he opined that “it requires that the continent’s wealth should benefit African peoples in the first place. This means that South-South cooperation should be at the heart of intra-African economic partnerships.” His words reflect the increasing disenchantment of Africans with international firms, backed by their governments, which extract commodities, undersell local manufacturing, and leave no long-term tangible benefits to citizens of the host countries.

Employment and economic growth received special attention, “job creation and the expansion of small and medium-sized businesses and industries, which are the continent’s real engine of growth and the main job provider for its young people.” Clearly understanding these challenges from similar ones in Morocco, he commented that “Africa is a great continent. It therefore has to take its destiny in its own hands.  Africa is no longer a colonized continent. This is why Africa should learn to trust Africa [emphasis added].”

Partnerships not Handouts

According to studies by the Center for Strategic and International Studies (CSIS) and the Atlantic Council, Morocco and Africa are too often treated as “part of a problem.” The King took exception, as did these leading think tanks, with that characterization.

King of Morocco speaking“Our continent does not need assistance so much as mutually profitable partnerships. Africa needs human and social development projects more than it needs humanitarian aid…The 21st century should be that of African peoples’ triumph over the ravages of underdevelopment, poverty, and exclusion.”

The King believes that there is much to be gained from partnerships for development. “Africa should forge further fruitful partnerships with the many developed countries that show a constant interest in and sincere commitment to economic progress and human development in Africa, while being actively involved in them…It should also benefit from the opportunities offered by triangular cooperation as an innovative tool that facilitates joint efforts and helps achieve optimum use of resources.” Morocco has much to offer in this regard, as it has used its networks and regional expertise to carry out a number of triangular projects in Africa using funding from international sources.

The bottom line, according to the King, is implementing strategies that utilize African expertise to expand economic growth. “It is our collective duty to make sure globalization becomes a positive force conducive to development in Africa…the creativity and dynamism of the private sector should focus on specific promising areas such as agriculture, industry, science and technology, and infrastructure development….Leveraging South-South public-private partnerships and the transfer of technology are key elements in this respect.”

Achieving Its Potential

King Mohammed VI did not avoid the tough issues of the impact of local conflicts and growing threats from extremists. “These challenges [which threaten stability and hinder development] can only be met through cooperation, solidarity between African peoples, and respect for the States’ sovereignty and territorial integrity.” He emphasizes that “This makes institutional capacity-building in African States a strategic objective. Better governance, progress based on the rule of law, and the peaceful settlement of conflicts must constitute shared priorities.”

map of north AfricaHis message about the need for change is clear. “This objective [prosperity for future generations] will even be more readily attainable when Africa overcomes its Afro-pessimism and unlocks its intellectual and material potential as well as that of all African peoples. Just imagine what our continent will look like, once it frees itself of its constraints and burdens!”

The King’s optimism on these visits to Mali, Guinea, Ivory Coast, and Gabon is striking. In Mali, the two governments signed 17 bilateral agreements, and another 26 investment and public-private partnerships in Ivory Coast, more indicators of the substance behind King Mohammed’s messages.

These are hopeful signs that Morocco and Africa, which are not without challenges to achieving their goals of prosperity, equality, and security, can forge commitments and partnerships to advance Africa towards its continental potential.

Originally posted at Morocco on the Move.