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Why is Morocco Reaching Out to Africa and Asia?

In his speech on August 20, King Mohammed VI of Morocco continued his country’s campaign to highlight its political and economic ties to Africa.

The occasion was the commemoration of the People’s Revolution Day, the beginning of the struggle against the French Protectorate. The King spoke on a number of topics including Morocco’s historic ties with Algeria, the need for overseas Moroccans to oppose extremism, and the centrality of Africa to the Moroccan identify and national strategy.

Morocco has been working very hard for a decade to cement relations with African countries to gain their support for Morocco’s efforts to join the African Union. Morocco’s strongest tool are the economic and commercial benefits that come with strong bilateral relations with the kingdom, amply demonstrated by the fact that, according to the African Development Bank, 85% of the country’s foreign direct investment is in Africa.

And like any other smart policy, these efforts do not come unconditionally. As the king said in his speech, in a clear reference to the AU effort, “Our decision that Morocco should take its natural place, once again, within the African institutional family clearly illustrates our commitment to continue supporting the causes of African peoples.”

He went on to point out that “For Morocco, Africa means more than just being part of a geographical area, or having historical bonds with the continent. Africa also means sincere affection, appreciation, close human and spiritual relations as well as tangible solidarity. Furthermore, Africa is the natural extension of Morocco and the embodiment of the country’s strategic depth.”

Morocco’s friendship has many benefits

Morocco’s efforts are multi-dimensional, involving the private sector; large state corporations such as OCP, the phosphate giant; government health, social, and education agencies; counterterrorism cooperation; and cultural exchanges. Moroccan telecoms companies serve more customers in a dozen African countries than they do at home; and Moroccan banks play a significant role in eight West African countries. Additionally, OCP, on its own and in an innovative partnership with Gabon, is producing fertilizer specifically tailored for African needs and is funding a distribution program for small landholders.

The king noted in his speech that “I believe what is good for Morocco is good for Africa – and vice versa. Theirs is one and the same destiny. I also believe there can be no progress without stability: either the two go together, or they do not exist. We see Africa as a forum for joint action, for promoting development in the region, and for serving African citizens.”

The efforts are making a difference. At the recent AU Summit, Morocco was able to secure 28 countries on a letter promoting Morocco’s admission to the AU after its withdrawal from its predecessor organization the Organization of African Unity (OAU) over the admission of the Polisario-run government Sahrawi Arab Democratic Republic.

Dr. J. Peter Pham, Director, Africa Center, the Atlantic Council

Dr. J. Peter Pham, Director, Africa Center, the Atlantic Council

In his commentary on the speech, Dr. J. Peter Pham, Director of the Africa Center at the Atlantic Council, remarked that “The monarch’s remarks reaffirmed a strategic orientation with significant implications not only for Morocco and other countries of the African continent, but also their global partners, including the United States.”

And the story has been carried over into Morocco’s growing relations with India, Russia, and China. The king had a retinue of 400 business representatives and government officials when he attended the India-Africa Forum in October 2015. Five pacts were agreed and two signed during the Forum.

Following on the heels of the India excursion, King Mohammed visited Russia March 15-16, 2016 during which a number of agreements, protocols, and memorandums of understanding, some 14 in number were highlighted as well as the continuation of the Strategic Partnership agreement that has been in effect for 10 years, since the king’s last visit in 2006.

It was a similar story in China during the state visit that began on May 11, 2016. The two countries inked 15 bilateral agreements, accords, and memoranda covering the education, economic, cultural, tourism, and technical sectors. Most importantly from the king’s perspective was the signing of a Strategic Partnership similar to that with the Kremlin.

While there is much speculation about the timing of these visits, many pundits say these Moroccan initiatives are not surprising considering the US’ reluctance to fully endorse Morocco’s autonomy proposal for the Western Sahara, calling it serious, realistic, and feasible, but not calling it out as “the” solution to the conflict. However, Russia and China have not called for its unqualified endorsement either.

Morocco is playing the long game. Whether with the AU or the Security Council, the kingdom knows it needs friends and the US’ fickle behavior gives Rabat pause, promoting a fuller, more strategic vision of how to gain friends and influence others.

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

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

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

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

Invest in Africa report 2014

AU – Invest in Africa 2014

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

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

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

What Africa Needs and Wants

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

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

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

Obama Speaks about Upcoming US-African Leaders Meeting

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

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

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

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

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

Companies turning to Morocco to do business in Africa

Morocco is cited for strong business environment

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