Morocco Speeds Ahead in Renewable Energy

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Power Purchasing Agreement Provides Momentum to Reach National Goal

Morocco’s leadership in renewable energy received a strong jolt of support this past week with the announcement of a finalist for 850MW of wind-power projects to be awarded to an international consortium headed by NAREVA, a Moroccan energy company.

Upon signing of the contract, still to be finalized, the consortium will develop, design, finance, construct, operate and maintain five wind projects: a 150MW facility in Midelt, 100MW in Tanger and 200MW in Jbel Lahdid in northern Morocco, and 300MW at Tiskrad and 100MW in Boujdour in the south.

The preferred bidder status award was made by ONEE, the Moroccan Office National de l’Electricité et de l’Eau Potable, to the consortium which includes Nareva as well as Enel Green Power (EGP) and Siemens Wind Power. Total investment is estimated at around $1.1 billion.

According to EGP CEO Francesco Venturini, “We are leveraging on our knowledge and expertise, in collaboration with our partners, to contribute to Morocco’s ambitious energy plan that has renewables at its core. The country is an example in North Africa of reliability and transparency in supporting the development of renewable technologies.”

The overall project requires creating two financial vehicles to guarantee the deliverables at a reasonable cost to Morocco. EGP and Nareva will create limited liability companies called “special purpose vehicles” for each of the five sites to insulate the project from any financial issues of the parent company.

In addition, the project was conceived under the Power Purchasing Agreement (PPA) passed into law in 2013 that enables companies to pursue power projects based on an agreed purchase price by the government, amounting to a sovereign guarantee for projects that are financially sound and efficiently operated. The agreement with ONEE runs for 20 years on the facilities that will come online between 2016 and 2020.

These target dates fit within Morocco’s current goal of 42% power from renewables by 2020, which was projected by King Mohammed VI at COP21 to be 52% by 2030.

Separately, Siemens agreed to build a rotor blade factory at an investment of more than $110 million that will result in up to 700 jobs in a factory to be located in Tanger. The facility will serve African, Middle Eastern, and European wind markets upon completion in spring 2017.

Markus Tacke, CEO of Siemens Wind Power and Renewables Division, noted “We invest where we see strong business opportunities. Morocco is the perfect location from which to serve the growing onshore wind power markets in Africa, the Middle East and Europe. The economy is strong, the political climate is stable, and Morocco has a young, skilled and motivated workforce. These factors make Tangier the ideal site for this new state-of-the-art factory.”

Siemens has had a permanent presence in Morocco since 1956 and has already been involved in several major renewable energy projects, including the 300-MW Tarfaya wind farm project.

With additional investment opportunities identified in hydropower, biomass, and even nuclear power, Morocco is well on its way to meet and possibly exceed its energy goals.

Morocco Continues to Polish Its Green Credentials

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Unique Partnerships for a “Greener” Morocco

Thanks to a State Department-funded program, Virginia Polytechnic Institute and State University, better known as Virginia Tech, and a Moroccan NGO – the Industrial Cluster for Environmental Services (CISE) — have developed a partnership that won a contract to promote “green” entrepreneurship” in Morocco. The background to the relationship is quite interesting. Selma Elouardighi, born and raised in Rabat, came to Tech’s School of Public and International Affairs in August 2010 as a PhD student in Planning, Globalization and Governance. As she tells it, “My research interests centered on corporate environmental responsibility…and I decided to focus my work on the transfer of environmental best practices from developed to developing countries.”

Her key findings were that environmental best practices (EBP) are most effectively adapted when market pressures engage corporations and their supply chains. “Networking, which often leads to the identification and capitalization of synergistic opportunities between various firms, is an important facilitator of a systematic adoption of EBP.” Selma decided that the best way forward in Morocco was to set up CISE, an association of producers and consumers of environmental services and technologies.

As Selma puts it, “CISE provides a platform for sharing of best practices and partnership development between various constituencies [companies, public sector, higher education and research institutions, and environmental NGOs] to collectively pave the path for cleaner production and corporate environmental responsibility…and aims to promote research activity…and an incubator for green enterprise.”

Both sides play critical roles in CISE. The producers, by attracting more members from the industrial sectors, increase the spread of Morocco’s green programs. Consumers of these services help identify the technologies needed in the market, which help set priorities for producers and at the CISE incubator for environmental projects. CISE sees itself, eventually, as a bridge between academia and industry in that university facilities “serve as R&D labs for small and medium sized enterprises,” which in turn work with graduate and doctoral students to bring their innovations to market.

After registering CISE in Morocco in June 2014, Selma reached out to her colleagues at Virginia Tech and found a professor who was trying to start an educational program with Morocco. After some discussions, they agreed to collaborate. Michael Mortimer, Director and Senior Fellow at the Center for Leadership in Global Sustainability (GLiGS) at Virginia Tech College of Natural Resources and Environment became that counterpart for CISE. Always on the lookout for broadening the school’s international ties, he was already developing programs in China, India, South Africa, Turkey, Indonesia, and now Morocco.

When he saw a State Department request for proposal to fund a “Green Entrepreneurship” project in Morocco, the collaboration with CISE became a viable entry point for a joint proposal, which won the grant competition. CISE then engaged its stakeholders to identify the value chains in recycling and energy efficiency that appeared to be priorities. These included recycling of used oil, used tires, dangerous/toxic wastes, plastics, construction waste, and fish waste, with energy efficiency of construction materials also targeted. Requests for proposals were then sent to entrepreneurs throughout Morocco to identify strategies for how they would create green projects in these areas or others.

Those whose proposals are chosen will receive funding and support from business coaches who will work with the entrepreneurs and monitor their progress. The coaches are professors working in entrepreneurship at HEM, the highest-rated business school in Morocco and a CISE partner.

An interesting feature of the GLiGS program is that all graduate students must spend at least 10 days abroad conducting research. As Professor Mortimer said, it is a “marvelous opportunity” for students to learn about challenges in other countries and give back to the hosts by undertaking case studies or other small-scale projects. Since the Tech graduate students are professionals who have work experience, this means that they bring their expertise to bear on environmental and health-related issues in the host country.

World Bank Steps Up, Again

After, the international conference on climate change COP21 finished up its work in Paris last year, it passed the challenge of delivering global consensus on a way forward to COP22 — to be held in Morocco this coming November. And Morocco is relishing the challenge. The King has already appointed a senior-level task force to manage the logistics and agenda-building for COP22, and members have been holding meetings with their counterparts in many countries to move the agenda forward.

Not content to just be a great host, Morocco, with the help of its partners, is ramping up its concrete commitments to reduce emissions through a variety of projects, which, in addition to the Virginia Tech-CISE partnership, are playing a role in promoting a sustainable green environment in Morocco.

The World Bank, through several of its funding mechanisms, is supporting a major recycling project that aims to ramp up the rate of recycled materials from 5% today to 20% by 2022, while giving employment to waste-pickers and providing greatly improved working conditions including health care, access to a bank account, regular wages, and housing support.

Another World Bank project supports the sustainability of agriculture, tourism, and fisheries by promoting, for example, better groundwater management practices, soil conservation, improved information for farmers, and preservation of fish stocks; at the same time it encourages the diversification of employment “through the promotion of industries that have less negative impact on the environment, such as eco-tourism and aquaculture.”

These projects, funded by donor organizations, demonstrate that Morocco is deeply engaged on its COP21 commitments as well as its energy use goals for 2020 and beyond. By partnering with fund sources, NGOs, and the private sector, Morocco is opening opportunities for entrepreneurs and workers to find new opportunities in “Green” Morocco.

 

Nizar Baraka Details how “Advanced Regionalization” is Advancing Democracy in Morocco

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Plan for the Sahara only the Beginning for Empowering All Moroccans

At a recent roundtable discussion in Washington, DC, The Honorable Nizar Baraka, former Minister of Finance and Economy, who serves as president of the Economic, Social, and Environmental Council (CESE) in Morocco, provided his analysis of the regionalization program being rolled out in Morocco, and how this is already changing the political space in the country.

Mr. Baraka began by reviewing the CESE process for developing the first study of “the South” (the Saharan provinces), which included public hearings with testimony from some 1500 people as well as dozens of studies prepared by experts, which resulted in recommendations for extensive restructuring of local government and a robust economic development strategy. He explained that what is being done in the South is the beginning of “advanced regionalization” for all of Morocco.

He believes this is part of the implementation of shared decision-making and devolution of power promised in the 2011 Constitution. Mr. Baraka emphasized that the credibility of regionalization will only become real when citizens participate in local decision-making that affects their daily lives.

For example, the Parliament (Chamber of Deputies) is currently debating bills that give Civil Society the capacity to submit proposals and petitions directly to Parliament.

There is great economic disparity among the regions in Morocco, he explained. For example, 52% of Morocco’s GDP is produced in four regions, while 53% of its doctors practice in two regions. Similarly, the rate of joblessness in the South is twice the national average. Baraka insists that the direct election of the region’s presidents (the highest locally elected officials), and the five-fold increase in budgets for regional development are strong incentives for citizens to be more involved in local affairs.

So the CESE efforts have focused on how the government can create an environment for greater political responsiveness, and part of this campaign is a new economic development model for the region based on public-private partnerships. This includes large-scale investments in diversifying the economy, a new university focused on local needs, particular attention to conservation, and positioning the Sahara as a gateway to sub-Saharan Africa.

Economic Diversity to Drive Economic Growth

The Sahara is well poised for economic growth. Its GDP is 60% higher than the national average, but some 30% of that is generated by government programs. So the strategy going forward is to deeply engage the private sector to increase investments and jobs. One critical target is to diversify the local economy while protecting the environment. The focus is on empowering individuals to more fully participate in the economy; for example, raising the rate of women in the workforce from a woeful 14% to at least the national average of 25%, and doubling the number of employed youth..

Sectors slated for diversification include fishing, aquaculture, value-added farming, renewable energies, downstream phosphate industries, and eco-tourism. Plans have been finalized for a local university focusing on the needs of the region, including professional development of medical personnel, educators, managers, and lawyers; tourism and hospitality; and research and development supporting local industries. Given that the South’s literacy rate is already 20% higher than the national average, targeted efforts to build on their capabilities through focused programs of higher education should reap short and long term benefits, in terms of jobs and meeting future employer needs.

Conserving the environment is also a prime consideration, especially well water, which is overused. Desalination, reuse of gray water, greater efficiency of energy utilization, treatment regulations for well water, a new dam, and a comprehensive campaign to preserve the eco-system in the Bay of Dakhla are the headline items in this effort.

Looking at both the supply side, which pushes the growth of the local economy, and the demand side, which is the pull of market needs, Africa is the obvious market. Building a new expressway from Agadir to Dakhla onwards to Mauritania and Senegal, high speed digital connectivity, expanded port facilities, and the export of solar power along an interconnected grid are all in the plans for the next 10 years. It is anticipated that 75% of the targeted $10 billion of investment will come from national government public-private sector partnerships, while the regional governments will contribute the remaining 25%. The goal of these efforts is to create 120,000 jobs and cut unemployment in half.

Mr. Baraka provided discussed other plans underway, which he believes will create a seismic shift in how citizens see their roles in relation to the government. Empowering proactive, engaged, and contributing citizens is the core mission of advanced regionalization, which will require a different mix of incentives in Morocco’s different regions. The most important impact, according to him, is that the political space in Morocco has changed forever. This is clear in viewing the evolving role of the media and civil society, debates in Parliament over legislative initiatives, and the pressure on political parties to restructure their governance to reflect issues and priorities. More importantly, advanced regionalization will continue this process and move Morocco towards its goal of a new social compact based on engagement and respect.

Morocco’s Energy Strategy Attracts Global Attention

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International Players Drawn by Government’s Ambitious Program

 

I recently visited four cities: Milwaukee and Madison, Wisconsin, Chicago, Illinois, and Minneapolis, Minnesota, speaking on business opportunities sparked by the US-Morocco FTA.

Ironically, most of the attention focused on potential opportunities in renewable energies – a sector that is only tangentially impacted by the FTA, yet one that has captured the attention of the global industry, from providers of consumer and small-scale technologies to the manufacturers of large scale solar and wind facilities and equipment.

There is also interest rising in Morocco’s efforts to build an integrated LNG and gas-to-power plant with an import facility near the current coal-fired power station at Jorf Lasfar, along with a number of combined-cycle gas turbine power plants. The Minister of Energy, Abdelkader Amara, has just visited the US, meeting with industry leaders, taking a tour of several LNG facilities, and speaking to companies in several states. The visit was described as “very productive,” and it highlighted Morocco’s efforts to “enhance its commitment to green energy.”

Lahsen Amarof, head of the Ministry’s Natural Gas and Fossil Fuels Division, noted that “The project will be tendered as one integrated project through one tender. We expect to have a consortium with many companies [undertaking the project], including CCGT specialists and companies for the LNG part.”

The Interfax report also noted that “The project also includes the construction of a 400-km high-pressure pipeline connecting the LNG terminal to the existing Maghreb-Europe pipeline, which takes Algerian gas to Spain via Morocco, through Mohammedia, Kenitra and Dhar Doum. The scheme also includes the construction of pipelines to each of the projected power stations, and may be extended to underground gas storage facilities at a later date.”

As financing comes on line through a variety of public-private sector partnerships, companies will line up to take part in this estimated $4 billion project that is part of the overall shift in the energy profile of Morocco.

Solar Continues to Dominate the News

sciamScientific American is the latest magazine to take notice of what Morocco is doing, in a recent article on solar energy in the Middle East. The article concedes that Gulf investors such as the UAE, Saudi Arabia, and Qatar and energy importers like Morocco have markedly different rationales for investing in solar. While the Gulf producers are concerned with achieving the best value for their exports by reducing domestic consumption, Morocco is simply trying to reduce its expensive fossil fuels import bill and reach its climate change goals.

“Global consulting firm Ernst & Young, in its latest Cleantech Survey Report for MENA, ranked Saudi Arabia, UAE, Morocco and Jordan as having the greatest potential for renewable energy investment in the region, adding that ‘the opportunities to provide affordable and secure low-carbon energy are continuously expanding.’”

Solar energy has many benefits. It can then be used to meet other development needs, such as powering high-use desalination and waste/water treatment plants at lower cost and lower greenhouse gas emissions technology such as the CSP projects in Morocco.

The magazine pointed out that “As part of its 2009 National Energy Strategy, Morocco has pledged to bring online 6,000 MW of renewable energy — 42 percent of its installed capacity — from hydro, wind and solar resources by the end of the decade. Last year, officials told the Al-Hayat newspaper that the country would invest $11 billion in wind and solar over the next five years, allowing the country ‘to turn from an importer into an exporter of alternative energy by 2020.’”

In its latest Renewable Energy Country Attractiveness Index, published this month, Ernst & Young credited Morocco’s solar program for adhering to a “bold risk allocation strategy for such large-scale and complex projects.”

In related news, Italian firm Enel Green Power SpA, a well-known leader in renewable energy, announced the opening of an office in Morocco.

enelAccording to CEO Francesco Venturini, Morocco has emerged as a renewable “energy pioneer” in the region, outlining clear goals and providing the “regulatory framework” necessary for renewable development. “We have already set foot in the country, establishing a local headquarters, and now we are aiming to grow by installing megawatts and contributing to the achievement of the country’s ambitious energy targets,” Venturini told a business conference in Rabat, according to media reports.

At the current time, Enel has a number of tenders on its radar, including the most recent project of Morocco’s national utility ONEE for an 850MW wind project that has attracted prequalified bidders from a number of countries.

The bottom line is that Morocco is making good on its vision for the future and is securing the commitments and expertise needed to meet it energy and climate change goals.

CorpsAfrica: A Grassroots and Transnational Model for Development

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Successfully Launched in Morocco; Plans Expansion in 2015

As the debate continues about how to make development programs more impactful and inclusive, a new narrative on community development is being written in Morocco, borrowing from US Peace Corps and AmeriCorps models. It is called CorpsAfrica and is based on the assumption that Africans are quite able to undertake grassroots economic development in their own countries if given the tools and access to resources and support.

I recently interviewed Liz Fanning, Founder and Director of CorpsAfrica – an NGO that prepares Africans to work in their countries as volunteers doing Peace Corps-type community projects defined by their host community. CorpsAfrica launched its first cohort last year in Morocco, where Liz had served as a Peace Corps volunteer. As she points out: “CorpsAfrica is helping to establish a path toward public service across Africa by giving young people the opportunity to understand extreme poverty and the skills to help.”

In their first several months of training, the volunteers meet with a range of NGOs and government offices and agencies to learn about how to access resources and support for community-based projects. This includes multilateral donors, US agencies, and Moroccan government programs, as well as NGO and civil society organizations. The volunteers learn how to tap into existing networks to develop support for projects in rural areas. Among its current partners are the OCP Foundation, Amis Des Ecoles (rural education), Anarouz Social Enterprise (rural women’s economic development), Al Akhawayn University, the International Youth Foundation, and UNICEF Maroc.

Liz Fanning, founder of CorpsAfrica

Liz Fanning, founder of CorpsAfrica

As Liz explains, “CorpsAfrica volunteers serve as facilitators and liaisons – they live in a remote, high-poverty village for one year to help the communities develop a project that addresses self-identified priority needs, and then they bring in the resources to make it happen. The projects happen through the volunteers – not by them. This participatory approach allows volunteers the flexibility and creativity to respond to the unique characteristics and challenges of a given community.”

“Because they do not have a ‘plan in place’ before entering a community, CorpsAfrica volunteers start by listening deeply to the needs and practical concerns of the individuals and the community as a whole. Projects are generated from the people within the community and thus are culturally sensitive, logistically practical, and, most importantly, the people who will ultimately benefit have a strong sense of ownership for the management and long-term sustainability of the projects.”

As its model proves successful, Ms. Fanning is excited about the coming year. “It will be a turning point for CorpsAfrica. We are more than doubling the program in Morocco and working to ensure a successful and transformative experience for the volunteers in the field and to perfect the model to use as a template for other countries in Africa. We are working to expand to Senegal and Ethiopia and hope to open those new offices before the end of 2015.”

For more information on the volunteers, their projects and how this small initiative is becoming an engine to transform and empower communities, check out their link at www.corpsafrica.org.

Africa is coming to Washington: How Will America Respond?

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Will a gathering of 48 African leaders rejuvenate America’s leadership in Africa?

It’s probably not on your calendar yet, but US media is finally focusing on the upcoming US-Africa Leaders Summit to be held in Washington, DC, August 4-6. Much of the coverage has been critical – not enough information being released, no personal meetings for each leader with the President, no final communiqué expected – and it is clearly a test of this Administration’s capability to pull off an extraordinary event and produce some substantial results in three days.

Summit Attracts Leaders from 48 African Countries

Summit Attracts Leaders from 48 African Countries

While the media and policy analysts may have their concerns, it is interesting that there has been little reporting from Africa in the US accounts of the Summit. How the Administration is able to perform during the Summit, and more importantly, in following up on its outcomes, will affect US policy on the continent for another decade. If we do it right, that is, make few promises and fully meet the ones we do make, it might just widen the opportunities for the US to both become a more active participant in the region and build new partnerships, as we have with Morocco, that reinforce the process of economic and political reforms needed in most African countries.

 Opening Day Focus on Working Groups

According to the schedule released by the White House, each day has a specific focus: Monday August 4 features six topical meetings at the National Academy of Sciences covering civil society, investing in women, investing health, Power Africa, food security, and combating wildlife trafficking. These meetings are by invitation only and are expected to generate working papers to guide US-Africa relations in the key sectors under discussion. Congress gets into the act with a 6 p.m. reception on Capitol Hill, limited to the heads of the delegations and three guests per country.

A very helpful step that could be taken by the Senate to demonstrate its commitment to healthy US-Africa relations would be to confirm the 20 career US Ambassadors for Africa that are currently in limbo.

 Business Opportunities Highlighted

Emerging and Frontier Markets in Africa are challenging and lucrative

Emerging and Frontier Markets in Africa are challenging and lucrative

Tuesday, August 5 highlights the “US-Africa Business Forum” to which CEOs of US companies are invited to meet with the heads of the Africa delegations and a high-ranking official to discuss mutual business interests. The day is being coordinated by the Department of Commerce and Bloomberg Philanthropies and Secretary Penny Pritzker and her team have been working the phones to ensure a strong US turnout. Recently, China replaced the US as the leading business partner in Africa, and the Forum is an opportunity for American companies to learn first-hand about why it makes sense to have Africa as a priority target market.

Rather than leave discussing business solely to government representatives, many countries, from South Africa to Morocco, are sending business delegations to meet with their counterparts even though there are no formal events planned for these delegations. In true American style, this is being left up to the private sector in Washington, which is rolling out their best as the Corporate Council on Africa, US Chamber, Brookings, CSIS, the Atlantic Council, and many others are furiously vying for space and time to hold seminars, forums, side meetings, and exhibitions to attract participants from the US and African official and business delegations.

 The Leaders Agenda

US has many challenges to its leadership in Africa

US has many challenges to its leadership in Africa

After the White House dinner on Tuesday evening, US and African Leaders will convene at the State Department for three plenary sessions on Wednesday, August 5. The three topics: “Investing in Africa,” Peace and Regional Stability,” and “Governing for the Next Generation,” evolved from many discussions between the US and African representatives. These topics are linked by common threads: attracting investment to promote jobs that provide stability and support peace through employment for young people and supporting their inclusion in governance. Attention will also focus on the Young African Leaders Initiative (YALI), a program started by President Obama in 2010, which builds networks among leaders across Africa and brings many from Africa to visit, study, and learn in the US. Morocco is also on the agenda as it will host the upcoming Global Entrepreneurship Summit in November, and an announcement is expected on Wednesday. It is anticipated that a number of initiatives will be announced by President Obama in his final statement later that afternoon.

 Managing Expectations; Producing Results

To many observers, the tight control over the proceedings, limited access to events, maintaining the media center at the US Institute for Peace (USIP), and no final communiqué are signs that the Obama Administration wants to manage expectations so that no one expects a panacea to emerge out of six hours of discussions on Wednesday. Rather, friends at the State Department tell me that the targets are quite specific – mirroring the first day’s discussions at the National Academy of Sciences – what specific steps can the Administration take do in terms of women’s issues, health, food security, and controlling trafficking with Africa and US and African private sectors to build Africa’s capabilities to solve its problems.

This is a theme that King Mohammed VI has repeated throughout his travels in Africa, “Africa is a great continent. It therefore has to take its destiny in its own hands. Africa is no longer a colonized continent. That is why Africa should learn to trust Africa.” While some may emphasize that Africa is the future, it is still made up of 54 distinct countries with national interests and regional concerns that may or may not be always be consistent with US interests. By not focusing on the big political red buttons and instead emphasizing reforms, human development, and business opportunities, the Obama Administration may have made the wise choice. The question lingers, will it be able to follow up, with Congress, on promises made?

Morocco Gathers Recognition as Gateway to Africa

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*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.

Facing Challenges in the Food-Water-Energy Nexus

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The fragility of water resources and how it impacts energy and food are moving rapidly to the top of the world’s environmental agenda. This should come as no surprise.

A key principle in understanding core issues in the Middle East is that all Arab societies, bar none, have evolved around maintaining water supplies and managing their relationship to food, land, and survival. This is not uncommon given that human habitats emerged in regions where water was plentiful, accessible, and provided the means to sustain basic food production, transportation, and oftentimes defensible settlements.

A recent article carried by Voice of America made note of a meeting of Agricultural Ministers and other top officials from the Middle East/North Africa (MENA) region in Rome at the UN Food and Agriculture Organization (FAO) to discuss the newly launched Regional Water Scarcity Initiative.

One estimate “warns the availability of fresh water in the region could drop by 50 percent by 2050.” While the existing impression may be that this is more of a problem for the desert rich countries of the Gulf, the reality is that growing populations are depleting water resources throughout the region, with little prospect of replacing damaged, drained, and destroyed aquifers.

The Regional Water Scarcity Initiative aims to identify and streamline policies in agriculture water management. The FAO says these are policies “that can significantly contribute to boosting agriculture productivity, improving food security, and sustaining water resources.”

In a press release, the FAO’s representative in Egypt Pasquale Steduto remarked, “This region is already known to be very scarce [in water supplies] – one of the most scarce in the world.  But we are observing that there is an acceleration and an intensification of water scarcity that in the next 40 years will bring this scarcity to the highest intensity in history.”

The FAO reports that in the previous 40 years “per capita freshwater availability in Near East and North African countries plummeted by two-thirds.” Steduto says it’s a complex situation. “Several things are coming into play from the population [growth], but also climate change. So, we need to be ready to address all the challenges that will come and the region will face in the coming years,” he said.

According to the FAO report, the chief culprit seems to be the agricultural sector, which uses more than 85 percent of the “available rain fed, irrigated, and groundwater resources.” With the rapid growth in populations, the demand for food is outstripping current agricultural capacity and underscores the link between water, food, and the energy needed to make future growth sustainable.

Food Demand Will Continue to Escalate Costs

Cognizant of the need to view food, energy, and water as interrelated parts of the ecosystem, the IMF’s Research Department cooperated with New York University’s Center for Technology and Economic Development, and Morocco’s OCP Policy Center for an in-depth analysis of the “causes and socio-economic challenges of food price volatility” February 25-26 in Morocco.

Experts from around the world examined the conceptual, policy, and operational issues related to food in the marketplace.  According to IMF Deputy Managing Director Min Zhu, “The conference will enhance our understanding of the drivers of food prices and thus help devise policies to improve food security and keep inflation in check…This is of great importance to many, indeed all, of our member countries.”

The conference examined both the causes and socio-economic challenges of food price volatility, ranging from “drivers of food prices and policies to ensure food security to defining the appropriate monetary policy response to food and fuel price fluctuations.”

And for the Future?

As James Clapper, US Director of National Intelligence (ODNI), testified to Congress in January, “competition for and secure access to national resources (e.g. food, water, and energy) are growing security threats…Many countries important to the United States are vulnerable to natural-resource shocks…Demographic trends, especially increasing global population and urbanization, will also aggravate the outlook for resources, putting intense pressure on food, water, and energy.”

It is inevitable that Morocco has become a central player in the food-water-energy nexus policy discussion as it works to reconcile four overlapping conditions that shape its future: heavy reliance on imported energy, increased population and urban migration taxing local services, fluctuations in rainfall that have a significant impact on GDP, and the need to create employment opportunities at all levels.

irrigated field in Morocco

Timing is critical for reducing or ameliorating Morocco’s challenges in all these areas, and only a coordinated and integrated strategy will reduce dependency on imported fuels, increase capacity to service rapidly growing cities, continue to expand and enhance water management strategy, and generate jobs from the introduction of new and more efficient technologies across the food-energy-water sectors.

Morocco is not waiting for a prescription to emerge from multinational organizations and think tanks. The Kingdom is reaching out to experts, analysts, practitioners, thought leaders, and a range of stakeholders to assess its assets and challenges and mobilize support for its grassroots and national strategies. Its 2020 national energy plan is already underway, making extensive investments in renewable energies.

Morocco has pioneered two major agricultural plans that include the utilization of extensive water management technologies, as well as enhanced agricultural production technologies. And it is working with the European Bank for Reconstruction and Development (ERBD) to promote the use of small scale renewable energy products by consumers and small business.

Overall, the integration of these efforts is a promising start to addressing the food-water-energy nexus.

Originally posted at Morocco on the Move.