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

/0 Comments/in , , , , , , , , , /by

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.

US Companies See Opportunities in Morocco’s Agricultural Sector

/0 Comments/in , , , , , /by

Atlanta Forum Provides Key Contacts

One can’t help but be skeptical when hearing about another business conference extolling the promise of opportunities abroad. It is not uncommon to ask “So what?” when looking for results that justify the expense of attending events while coming away with glossy brochures, a fistful of business cards, and tenuous promises of quick responses.

So we did something different at the US-Morocco Trade & Investment Forum in Atlanta on October 13. Most of the time was allocated for companies to talk with presenters, other companies, and government officials, with an emphasis on building face-to-face relationships so essential to doing business.

Well, how did that turn out? I can only give you my perspective and reflect on emails I received following the Forum, but I think they made the right decision – put people with mutual interests in a room and let them talk business. It worked out fine. I moderated a panel on agriculture, agri-business, and water management. Not unimportant to a country like Morocco where upwards of 40% of the workforce is in the farming sector and, in a good year, the sector contributes more than 18% to the country’s GDP.

In the room were representatives of Coca-Cola bottlers and distributors in Morocco, whose business affects some 70,000 Moroccan employees and their families. Given that Coca-Cola sources as much as it can locally, they are major players in the sector and in the economy. More importantly, Coke provides a great deal of technical assistance to local businesses to grow supply chain products and services, building the next generation of entrepreneurs.

From the Moroccan government, we heard from three very competent representatives: Mrs. Asma El Kasmi from the National Office of Electricity and Potable Water (ONEE), Abdeslam Ziyad, who directs strategic planning at the Ministry of Agriculture, and Soufiane Larguet, Director for Strategies and Statistics at the Ministry. All presented current data and projected opportunities in their areas of specialty.

The US and Moroccan private sectors included private equity investment firms, a foundation and company specializing in agriculture and water projects in Africa, a leading producer of organic and specialty food and cosmetic oils, several agro-industry firms, and a working farm that provides overseas technical assistance in a broad range of areas including improving seed, water management technologies, and food security processes.

­­­­­­One of the highlights of the session was the opening remarks by Gary Black, Commissioner of the Georgia Department of Agriculture. His presentation on the industry in Georgia and his insights into potential bilateral links has already led to discussions with Moroccan Ambassador Rachad Bouhlal on an exchange program between food security experts in Morocco and Georgia. Commissioner Black’s rational is that a thorough understanding of the food security (read FDA and USDA in the US) guidelines in the marketplace facilitates trade. This was borne out by several participants who spoke about the difficulty of navigating food and argan and olive oil exports to the US, despite the US-Morocco Free Trade Agreement.

A positive follow up is that several of the US participants in the room have already begun to the in touch with counterparts in the government and private sector in Morocco. And Moroccan companies are clearly interested in pursuing relationships that ease the process of exporting into the US. It is a beginning of an important exchange of ideas, proposals, and discussions about concrete business and investment opportunities that will continue for some time.

Morocco-US Businesses Set for Fall Meet-ups

/0 Comments/in , , /by

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?

/0 Comments/in , , , , , /by

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.

 

Plans Moving Ahead for Third US-Morocco Trade & Investment Forum

/0 Comments/in , , , , /by

Coca-Cola to Host Event at its Atlanta Headquarters

Although security issues continue to dominate news about the Middle East and North Africa region (MENA), the Moroccan Embassy in Washington, DC is also focusing on how to bring greater prosperity and stability to the region through business development. It is busy preparing for its upcoming annual trade and investment forum to be held this year in Atlanta on October 13. Much like the very successful program in Dallas last October, the agenda will bring a strong public-private delegation featuring leading officials and businesses from Morocco.

Coca-Cola’s hosting of the Forum is an indication of its long-standing business relationship with Morocco,. The company has its regional headquarters there and has made Morocco a major transshipment hub for distributing its products. First introduced in Morocco 1947, Coke now rivals tea as the favorite beverage of the country. According to a feature on the Travel Channel, Morocco is the fourth-largest consumer of Coke products in Africa, following South Africa, Nigeria, and Egypt – countries with much larger populations. Hawaii, a fruit punch concoction produced by Coke, was pioneered in Morocco and is now sold around the world.

Morocco’s love affair with Coke products was well illustrated in an economic impact study undertaken by Al Akhawayn University, which indicated that more than 70,000 Moroccans are employed in upstream and downstream operations, where the company has a significant impact on multiple sectors of the economy, from small farmers to truckers, retailers, food and beverage services, sports teams, to its wastewater recycling plants in Marrakech and elsewhere.

Atlanta Skyline credit: Atlanta.net

Atlanta Skyline
credit: Atlanta.net

So it makes good business sense for Coca-Cola to show other companies in the south why business in Morocco is a win-win proposition. According to a draft program of the Forum, three key areas will be highlighted: Agriculture and Food Investment Opportunities, Banking and Financial Services, and Manufacturing. In addition, there will be sessions devoted to Morocco’s rapidly growing renewable energy sector and its leadership in water management technologies.

A number of state and local public officials will be on hand to tout the bilateral relationship with Morocco and encourage Moroccan companies to source more products made in Georgia and the surrounding states. From the Moroccan side, you can expect high level participation from the Ministry of Industry, Commerce, Investment, and the Digital Economy, Casablanca Finance City, AMDI (Morocco Investment Development Agency), agencies dealing with renewable and hydrocarbon energy projects, and US companies doing business in Morocco.

In the agricultural sector, Morocco is introducing new technologies and crops to reduce fluctuations caused by variable rainfall. Through its Maroc Plan Vert (Green Plan), the government is providing support to small and large farming enterprises to improve their productivity and timely access to markets. As a result of its well-developed transportation and distribution infrastructure, Morocco has already established itself as the regional hub for doing business in West and Central Africa, including the Casablanca Finance City (CFC), where a diverse group of financial services companies are based to address the region’s needs.

Aeronautic and automotive manufacturing are the success stories in Morocco that continue to blossom. Automotive now is the leading manufacturing sector in the country, with more than 300 companies in the supply chain – a valuable market for regional businesses in Atlanta. Similarly, the aeronautics manufacturing sector, with its more than 100 suppliers based in an around Tangier and Casablanca, is an attractive destination for its counterparts in the southern US.

Of course, networking is the primary purpose for the forum, getting into the details of how to do business. Time has been set aside for individual meetings between companies and with government leaders as well as a novel format that provides for face-to-face meetings with the US and Morocco Ambassadors together to address company requests.

We will continue to update the program as details become available.

Morocco Strengthens Ties with Africa through Sustainable Projects

/0 Comments/in , , , , , /by

Multiple Agreements Signed during King Mohammed VI’s Visit to Four Countries

Morocco’s King Mohammed VI continued his economic diplomacy in Africa these past weeks visiting Côte d’Ivoire, Senegal, Guinea-Bissau, and Gabon. The most remarkable feature of these visits is the down-to-earth bilateral projects agreed to, which wed Moroccan expertise and resources with specific human and economic development goals in each country.

Morocco is not only the second-largest African investor in the continent, but it also provides scholarship support for more than 10,000 students from sub-Saharan Africa, contributes to bilateral and multilateral peace-keeping and security efforts, and is deeply involved in regional and continent-wide programs to promote entrepreneurism, innovation, and economic growth.

At his first stop, in Côte d’Ivoire, the King and President Alassane Ouattara chaired the signing of financial cooperation, infrastructure development, and communications and tourism agreements. The signings include: Attijariwafa Bank’s acquisition of the State’s shares of the Société Ivoirienne de Banque (SIB), thus completing its privatization; construction of a fishing facility in the town of Grand-Lahou; an MoU between Casablanca Finance City (CFC) and the Centre for Investment Promotion in Côte d’Ivoire linking their business promotion activities; and two MoUs signed by OCP, Morocco’s giant phosphates company, to work to support agricultural programs with the Ivorian National Agency for Support to Rural Development (ANADER) and the Coffee-Cocoa Board.

Senegal Broadens Bilateral Cooperation and Collaboration

Based on extensive preparatory work by bilateral committees set up during previous visits and exchanges, King Mohammed VI and President Macky Sall of Senegal presided over the signing of 13 cooperative agreements that continue one of Africa’s most dynamic and vibrant relationships.

According to a story in the North Africa Post, “These agreements seek to foster economic & industrial partnership and boost bilateral cooperation in the fields of sustained development, customs, fisheries, administrative management, logistics, handicraft, milk production, animal health, vocational training, drinking water, and rural electrification. They also aim to take bilateral relations to a higher level in the fields of finance, banking, investments, solar energy, and education (scholarship for students and executives).”

King Mohammed VI in Gabon with President Bongo

King Mohammed VI in Gabon with President Bongo

In addition, “The two countries have also set up a joint body tasked with the goal of bolstering economic partnership relations, encouraging contacts between the two countries’ private sectors, and following up the implementation of private-private and public-private accords.”

The latter initiative reflects the King’s belief that more accelerated and effective growth requires public-private sector partnerships (PPPs) to draw on the expertise and experience from both. The new bilateral body, called “The Morocco-Senegalese Economic Impetus Group,” co-chaired by the countries’ foreign ministers and heads of the employers’ associations, will meet twice a year.

While in Senegal, King Mohammed and President Sall attended the launch of two projects that are concrete examples of their bilateral cooperation: the connection of two Senegalese villages to the country’s national power grid, a project completed by a Moroccan company; and the launch of construction of a fishing pier in Dakar for artisanal fishermen, fully funded by Morocco. In addition, King Mohammed donated ten tons of medicines and medical equipment to the Fann University Hospital Center.

Momentum Continues in Guinea-Bissau and Gabon

President Jose Mario Vaz of Guinea-Bissau joining King Mohammed VI in presiding over the signing of 16 agreements as well as an agricultural partnership – once again demonstrating the King’s commitment to African solutions for Africa.

The agriculture partnership covers the exchange of information and best practices in ten areas, including rice cultivation, agricultural research and laboratory skills, livestock breeding, irrigation, use of fertilizers, and the promotion of PPPs for agricultural development. As an initial grant, the King donated veterinary and other livestock products to the partnership.

The 16 cooperative agreements spanned government-to-government ties as well as cooperation with civil society and the private sector in the areas of security and local governance, investment protection, marine fisheries and aquaculture, infrastructure technical assistance, mining, renewable energy development, vocational training exchanges, and others, according to an online report.

According to reports from the Moroccan Press Agency, King Mohammed VI and Gabonese President Ali Bongo Ondimba highlighted the work of Gabon’s Human Investment Strategy, modeled on Morocco’s National Initiative for Human Development, as a significant force for improving the lives of impoverished Gabonese citizens.

In addition, four partnership agreements were signed that illustrate the scope of the cooperation between the countries. The first focused on children with autism and Down syndrome; the second on setting up hemodialysis medical units; the third will support handicrafts and social development; and the fourth is a draft agreement covering cooperation in vocational training between relevant organizations in Morocco and in Gabon.

While others may pose questions and develop conceptual models of African development and bilateral assistance, the King of Morocco has been working for more than a decade on actual projects and initiatives that support human and economic development in Africa. He recognizes that Africa has to shape its future primarily through South-South cooperation. And if these past weeks are any indication, he has found willing partners who share his vision for Africa’s future.

 

Morocco’s Financial Sector Continues to Draw Support, Grow Regionally

/0 Comments/in , , , , , /by

Attijariwafa Bank and EBRD Reaffirm Regional Strategy

Morocco’s regional economic leadership role continues to draw media attention, signaling a growing recognition that its role in Africa is substantive and long term. For example, a recent article noted that the European Bank for Reconstruction and Development (EBRD) has opened its first full-time office in Morocco. Previously, its offices there were tied to specific project funding. Given the breadth of EBRD’s commitment to Morocco for the foreseeable future, “[o]pening a resident office is an affirmation of our commitment to Morocco and to helping achieve its potential. It is a key step in implementing the bank’s country strategy and boosting economic growth through development of the private sector and promoting regional inclusion,” says Phil Bennett, EBRD’s first vice-president.

EBRD currently has 18 projects in Morocco, according to its website, focusing on “supporting sustainable energy, direct and indirect financing of private enterprises and promoting infrastructure reform and facilitating non-sovereign financing.” It recently approved a comprehensive strategy “which focuses on realising the entrepreneurial potential of the country targeting women’s entrepreneurship and increasing finance for small and medium-sized enterprises (SMEs) through private equity funds, as well as providing dedicated credit lines associated with technical assistance.” Since 2012, EBRD’s disbursements have grown more than ten-fold, from 22 to 250 million Euros. Part of its success is that the private sector contributed 72 percent of the cumulative investment in projects. In this regard, local banks, financial institutions, and private equity, as well as companies, are the partners of choice for EBRD.

Domestic and International Commitment

Of course, the largest bank in Morocco, Attijariwafa Bank, is one of those key players. An article about Attijariwafa Bank, posted on Forbes.com, is an interview with co-CEO and Director General Ismail Douiri about his thoughts on leadership, his bank, and business in Africa.

Ismail Douiri speaks at L'economiste forum photo credit: L'economiste

Ismail Douiri speaks at L’economiste forum photo credit: L’economiste

Mr. Douiri recently joined the African Leadership Network (ALN), a group of the “most dynamic and influential new-generation leaders in Africa. The ALN creates and strengthens relationships between these leaders to encourage intra-African trade, investment, and collaboration.” As Africa matures as a group of developing, frontier, and emerging markets, professional networks such as ALN provide opportunities for collaboration and strategic cooperation enabled by technology, common business vocabularies, and a shared commitment to human and economic development. This is a role for which Ismail Douiri is well prepared.

He has been instrumental in the growth of Attijariwafa Bank, which now has assets exceeding $34 billion, more than 3,000 branches, 15,000 employees, and close to five million clients. Douiri believes that Morocco’s banking story is not well known. He points out that, relative to its economy, Morocco’s banking sector is larger than South Africa’s, and the two largest Moroccan banks each have more than twice the assets of the largest Nigerian bank. With a stock exchange that ranks between second and fourth largest in Africa, Morocco is well qualified for its leadership role.

He attributes much of the bank’s success to building a strong internal culture focusing on serving the customer as the first priority. Knowing that there is no single style or talent of leadership, Mr. Douiri believes in openness to innovation, developing and enabling diversity in staffing, supporting talent and hard work, and listening…always listening. And he never forgets, despite the breadth of the challenges he faces, what matters. “I love being part of new projects aiming at entering new territories, or introducing new financing instruments that will bring value to people and help them realize their own dreams. I also love to contribute to broadening our community involvement through Attijariwafa bank’s Foundation.”

His experiences have clearly shaped his vision. When asked about inclusive growth, he replied that that is not something easily defined or arrived at. “My personal view is that the pursuit of economic growth, if coupled with the right governance principles – transparency, accountability, organized stakeholder communication … and a safety net to prevent extreme poverty, leads to inclusive growth, a growth that will generate a middle-class better able to educate their children than their parents did for them.”

Financial Services Tie Morocco Closer to Africa

/0 Comments/in , , , /by

Casablanca Finance City and Attijariwafa Bank Grow Regional Roles

As the recent IMF/World Bank meetings in Washington, DC demonstrated, regional banking and investment powerhouses in Africa and Asia are increasingly important players in the world’s financial sector. Similarly, Morocco’s success in regional banking over the past decade reflects its commitment to regional economic integration and growing its own industry to global standards.

Recently, Casablanca Finance City (CFC) received the grand prize from the Africa Economy Builders for best financial center due to its role as a gateway for investment in rising markets in Africa. The award lauded the CFC approach of building partnerships with other African countries throughout the continent and promoting south-south cooperation. CFC’s recognition reflects in large part the efforts of Morocco’s banking sector in Africa, which has been featured in recent articles highlighting the country’s work building its financial services sector, especially in West and Central Africa.

the banker

One article, in The Banker, analyzed the overall banking sector and interviewed key banking figures in Morocco. The article pointed out that “Moroccan banks are relatively advanced compared with those of their north African neighbours.” It went on to mention that Moroccan banks, growing at around 7 percent a year, comply with international reporting standards, including voluntary corporate codes regarding capital reserves and risk control.

Mohamed El Kettani, chairman and CEO of Attijariwafa Bank SA, noted three factors in the success of Morocco’s banks. First of all, a high rate of banking penetration – more than 60 percent of Moroccans have bank accounts, providing the sector with liquidity to invest in generating more services in more locations, and, if well-managed, at lower costs. Critical to servicing the Moroccan population is Attijariwafa Bank’s subsidiary Wafacash, which handles remittances at more than 1200 branches, at half the fee previously charged.

The second factor Mr. El Kettani indicated is the quality of management in the banking sector, from the oversight of the Central Bank to the cooperation between the government and the private sector. This, combined with the recently enacted reforms of subsidies and stable political environment, has enabled the financial sector to expand services, reduce costs, and have the capacity to expand operations throughout the region.

Mohamed El Kettani

Mohamed El Kettani

El Kettani argues that Morocco’s regional role is smart business. “We had excess capital, distinctive skills in banking, and large clients…that were becoming regional actors. The decision we faced was either to accept leaving our best corporate clients to others and see our growth decline…or to formulate and execute a value-creating international strategy.” To date, Attijariwafa operates in 13 other African countries, which provide more than 26 percent of the bank’s revenues.

This emphasis on growth was echoed by Walter Siouffi, chief executive at Citibank Morocco. “Across the top three banks, which all have growing networks of subsidiaries and branches in Africa, expansion into the wider region is solidly prevalent. I expect this trend to continue as the Moroccan banking sector sees slower growth domestically compared with high-growth markets across the continent.” Mr. Siouffi also noted the potential importance of Morocco’s entry into Islamic finance, which “could help build the pool of foreign currency liquidity to support Morocco in serving as an important recycling hub given the sophistication of its banking sector, channelling investment funds into neighbouring francophone countries on the continent.”

As a sign of its continued commitment to strengthen its business environment, the financial sector is working with the government to reform the exchange controls, which is essential for CFC to serve as a clearinghouse and service center for regional investments and financial instruments. This would allow CFC to manage financial services across a range of currencies without restrictions on exchange rates or transaction amounts – important functions for enabling regional investments.

Drawing Africa Closer Together

/0 Comments/in , , , , , , /by

Morocco-MCC MOU and African Innovation Foundation Prizes Exhibit Continent’s Links

At the third Morocco-US Strategic Dialogue, held recently in Washington, the Millennium Challenge Corporation (MCC) and the Kingdom of Morocco signed an MOU that, in the words of the joint statement, is “designed to share expertise and lessons learned with other select countries in Africa.”

The two parties agreed to cooperate “with the goal of reducing poverty in Africa, including a focus on promoting the adoption of new technologies and innovative business models to promote entrepreneurship.” What this means, in fact, is that the US can ask Morocco to provide technical assistance in Africa, directly to countries eligible for an MCC compact or with countries “seeking to attain Compact-eligibility by supporting targeted policy and institutional reforms.”

Morocco and US Working on Third Compact Credit: MCC

Morocco and US Working on Third Compact
Credit: MCC

The reform agenda inherent in an MCC compact is part of the “no free rides” conditions on the funding that include performance based metrics, regular auditing, and stakeholder involvement throughout the duration of the project. Morocco’s first compact was not only the largest awarded by the US government at the time, it helped shape subsequent MCC thinking about compact development. For example, the MOU stated that collaboration “may facilitate sharing of lessons of Morocco’s experience; increase regional, private sector investment; and serve as a pilot for South-South cooperation.”

This coincides with Morocco’s growing economic integration with Africa as a result of years of “economic diplomacy” spearheaded by King Mohammed VI. Although there is no obligation for a country to accept Morocco’s technical assistance, it is certainly clear – since the Kingdom has now been approved for a second compact negotiation – that its experience is valued by the MCC.

The MOU was signed by MCC Deputy Chief Executive Officer Nancy Lee and Morocco’s Minister Delegate of Foreign Affairs and Cooperation Mbarka Bouaida. Ms. Lee commented that “This MOU demonstrates the value we place on Morocco’s experience and our desire to facilitate sharing the benefits of that experience with other countries in Sub-Saharan Africa. Our new partnership advances MCC’s interest in regional cooperation which will be an important driver of growth. The agreement will allow us to have a broader systemic impact that sustains and expands the value of our compacts beyond the compact projects themselves.”

One indication of how Morocco’s performance has influenced the MCC is the specific reference in the MOU to Power Africa, a US government program for sub-Saharan Africa. Morocco is not part of the program, but it was Morocco’s achievement of providing access to power for more than 95 percent of the country in less than 10 years that convinced MCC to highlight the power sector as a key area for potential cooperation.

Innovation Rewarded

Another highly visible indication of the successful impact of Morocco’s pivot to Africa is the announcement of the top 10 entrepreneurs in Africa by the African Innovation Foundation (AIF) from a pool of 925 applications from more than 41 countries. The awards ceremony will be held in Morocco may 12-13, hosted by Moulay Hafid Elalamy, Minister of Industry, Trade, Investment, and the Digital Economy.

Moroccan minister El Alamy

Moroccan Minister of Minister of Trade, Investment, Industry, and Digital Technology

In announcing the event, Minister Elalamy said, “We have a strong commitment with AIF to unlock the innovation potential of the continent. The ambition is to make Africa a juncture of innovation and prosperous nations. In Morocco, the commitment to promote research and innovation mobilizes both the government and private sector decision makers who join their efforts to make the national innovation system a force for development.”

The top 10 winners, who will share $150,000 in prizes, are quite diverse in their innovations. The Moroccan winner, Adnane Remmal, has made a natural alternative to livestock antibiotics that reduces health hazards to animals and humans at no extra cost to farmers. Other innovations addressing the needs of Africa include: an agri-business funding model that links returns to profits; an educational “box” that enables children to learn first-hand the principles of science and electronics by building, measuring, and experimenting; a measuring device for ensuring the accuracy of machines used to detect TB, the third-leading cause of death in Africa; and a water distillation system that can use solar energy.

Once again, Morocco is putting substance behind its mission as an African country. Its potential MCC technical assistance partnerships, hosting the AFI recognition of innovators making a difference in the lives of Africans, and the King’s upcoming trips to five African countries demonstrate its continued commitment to being a full player in the future of the continent and a platform for regional economic integration.

What’s at Stake in 2015 for Morocco?

/0 Comments/in , , , , , , , , , /by

Will the reform agenda, growth targets, and regional security goals be attained?

In the past few months, I have written several blogs marking the progress of Morocco’s bilateral relationship with the US, including highlights from 2014 ranging from expanded security cooperation and several high level business conferences, to highly visible and successful participation in the US-Africa Leaders Summit and Vice President Joe Biden’s meeting with King Mohammed VI.

While these are useful hallmarks for 2014, they are in some ways benchmarks for viewing challenges and opportunities in the year ahead. There is much to be done if Morocco is to maintain its momentum as a liberalizing and secure country.

When looking to 2015, three key categories of issues stand out. The first of course are issues related to the Western Sahara including the MINURSO renewal, disruptive actions of the Polisario Front supported by Algeria, and the potential for US foreign assistance to be extended to Sahara to advance human development.

Closely related to this are regional security and stability concerns including combating violent extremism through internal and external efforts; counteracting the ISIS threat inherent in militants returning from war-torn areas in the Levant; and supporting stronger regional economic ties to boost employment.

Finally, Morocco has quite a diverse domestic reform agenda, which includes legislation addressing key constitutional issues and continued efforts to expand its commercial and investment opportunities, promote entrepreneurship, and advance its role as a business platform for Africa.

Although the agenda is quite complex and requires heightened cooperation and collaboration among government, the private sector, and civil society, the seeds have been planted for potentially beneficial outcomes. And regardless of what some pundits claim, Morocco alone, among the Maghreb countries, has the domestic leadership stability to take risks to advance its agenda.

Western Sahara

The annual renewal of the MINURSO mandate by the UN Security Council, required to enable it to continue its mission as observers in the Western Sahara in support of a sustainable resolution to the conflict, is anything but routine. Despite recent attempts to impose a human rights monitoring role on MINURSO, Morocco has been able to demonstrate that it takes its role in the territory quite seriously and extends human rights protections throughout all of Morocco. This has enabled Morocco’s friends on the Security Council to promote extensive collaboration between Morocco and UN agencies on this issue and avoid inserting a human rights monitoring role in the MINURSO mandate.

Despite Morocco’s steps to improve the lives of the people in the South, the Polisario Front, fully supported by Algeria, continues an extensive campaign to challenge Morocco’s presence in the area, with some of its members aligning themselves to trafficking, smuggling, and militant elements who are a significant threat throughout the region. Algeria plays its part by maintaining the closure of its border with Morocco, opposing Morocco’s diplomatic initiatives, and refusal to engage in broader conversations on security and economic development.

Perhaps the prospects for positive results from hydrocarbon exploration in the area will encourage the parties to seriously engage in dialogue regarding how to best insure the future of the southern region, which depends on support from Rabat for its economic, social, and infrastructure growth. A significant step by the US government, which mandates US foreign assistance funding in the Sahara, may prove to be a catalyst to promoting the long-sought acknowledgement by Sahrawis enclosed in the Polisario camps in Algeria that their futures are better secured in a thriving, committed Morocco.

Working on a Secure, Stable Future for the Region

Secretary John Kerry meets with Morocco's King Mohammed VI

Secretary John Kerry meets with Morocco’s King Mohammed VI

King Mohammed VI has repeatedly called for a multidimensional approach to combating violent extremism at home, including job training, family counseling, and emphasizing religious moderation. This same approach defines Morocco’s approach to regional security and stability – training imams in moderate religious discourse; broadening economic growth to be more inclusive and sustainable; and working with governments and private sectors to support greater attention to enfranchising marginalized and excluded minorities.

Morocco’s role in the coalitions against ISIS and al-Qaeda demonstrates the strong position that the country has taken to challenge extremism and militants bent on destruction and mayhem. Hosting coalition meetings, sending forces to the UAE for military technical assistance, and participating in airstrikes against ISIS are a few of the more visible steps taken by Morocco this past year.

As importantly, the government of Morocco, under the King’s leadership, has entered into more than 80 agreements with its African neighbors to expand economic opportunities and diminish the attraction of militant recruitment.

Growing the Region, Changing Lives for the Better

Domestically, Parliament and the government have a full slate of bills that will implement significant changes in how the country operates. Chief among these is the restructuring of the judicial system to make it independent of outside forces. Other efforts of note include finalizing the new law on associations, which will define guidelines for registering civil society organizations and other associations; and passing the law that eliminates the use of military tribunals for political offenses.

Mourchidate working in community center

Key 2015 Event: Local Elections

Another event to watch is how the government and political parties conduct themselves in the upcoming local elections. Heralded as a concrete step towards regionalization, the elections are already contentious since Parliament has not yet passed the empowering electoral law for the elections to proceed, the myriad possibilities of alliances among parties, the role of  international organizations encouraging a more competitive and open process, and the implications of the various results scenarios.

Hosting the Global Entrepreneurship Summit (GES) was only the latest showcase in Morocco’s commitment to domestic and regional economic growth. The country is moving to maximize its parallel strategy of growing investments in diverse sectors while promoting workforce education and training that results in market-ready labor. Where Morocco is getting it right is emphasizing programs beyond IT to agriculture, hospitality and financial services, skills trade, and special efforts for youth and women.

******
2015 can be another breakout year for Morocco. Falling energy prices are reducing the drag of energy imports on the economy. Subsidies are being phased out or re-targeted for maximum savings and impact; and the business environment continues to improve for both domestic and international companies. The year may be long and difficult, full of domestic, regional, and international challenges. Yet there seems to be a growing commitment to see the future as an opportunity, which is the key ingredient for success.