What is the future role of private-sector investment in Morocco and what is your strategy for stimulating that investment?
Morocco’s investment rate is very high at around 30 percent of gross domestic product, as the global average stands at around 25 percent. This level of investment—two-thirds of which currently comes from the public sector—has enabled us to raise our infrastructure to the highest international standards over the last 20 years. Those two decades have seen many new projects built, such as Tanger Med Port, a high-speed rail line, a road and highway network, industrial acceleration zones and substantial renewable energy plants, for example.
To accompany Morocco into a new step of growth envisioned by King Mohammed VI, it’s now time for private-sector investment, both national and international, to deploy its full potential and we expect it to become the engine of socioeconomic development in the kingdom: our ambition is to reverse the ratio between public and private investment, bringing the latter to two-thirds of the total by 2035, which is in line with the vision and ambition of Morocco’s New Development Model, the country’s roadmap for driving its economy and society forward to 2035.
On the basis of this ambition, we’ve mapped out a growth trajectory for total investment volumes to follow toward 2035, which we’re currently adjusting for each industrial sector and geographical region in Morocco, and that’s being done in consultation with all stakeholders, particularly the relevant ministerial departments for each industry, the regional authorities and the private sector.
The two main tools we are using to encourage national and international private-sector investment are targeted support mechanisms, including direct incentives from the state and improving the business climate. This includes facilitated access to land and energy, providing sector-appropriate training and simplifying administrative procedures. A framework law for this strategy will soon be adopted, which will serve as the basis for a new investment charter that will act as a compass for investors by clearly defining the strategic orientations the state is aiming to develop.
Since 2009, Morocco has been building extremely ambitious renewable energy projects and it’s now the leading producer of green energy in Africa. Why did the country take such a pioneering approach to renewables and what are your future goals in this area?
Under the impetus of King Mohammed VI, and in accordance with his vision for a proactive, visionary strategy for renewable energies and the fight against climate change, Morocco embarked on an extensive, dynamic program of sustainable development projects, which has positioned the country as a leading player in renewables at the global level. Renewable energies represent 37 percent of Morocco’s energy capacity mix today and we’re aiming to reach 52 percent by 2030. To help achieve that, Morocco has liberalized its energy sector and made it open to private investment.
Thanks to the country’s first-class renewable energy resources and its strategic location, Morocco’s energy strategy is now entering a new phase of development involving green hydrogen and more high-voltage subsea cable projects for exporting our green electricity. The country’s goal is to position itself as a world leader in these sectors, while also keeping in mind our underlying objective of integrating more of our renewables into Moroccan industries.
Morocco is well known as a strong industrial platform for the automotive manufacturing, aerospace, electronics, textile, pharmaceutical, agribusiness, outsourcing and many other sectors. What makes Morocco so competitive for manufacturing, exporting and sourcing?
Morocco is one of the best, if not the best, platforms for competitiveness in the Mediterranean basin. In addition to excelling in the classic elements of competitiveness—such as labor, logistics, political stability, regulatory frameworks and free trade agreements, including ones with the European Union (EU) and the U.S.—Morocco stands out today as one the world’s best low-carbon industrial platforms. Indeed, Morocco is one of the very few countries worldwide where green energy is cheaper and more competitive than fossil fuel energy, a factor that is attracting a growing number of investors. Above all, the Moroccan success story is starting to snowball, as we have excellent ambassadors to our competitiveness in the investors that have already chosen Morocco.
“In addition to excelling in the classic elements of competitiveness—such as labor, logistics, political stability, regulatory frameworks and free trade agreements, including ones with the European Union (EU) and the U.S.—Morocco stands out today as one of the world’s best low-carbon industrial platforms.”
How innovative is the Moroccan economy and how are you working to ensure that the country remains as innovative as possible?
The pandemic revealed the critical role of our engineers and innovators in ensuring the resilience of the kingdom through, for example, the production of masks; the Moroccan Foundation for Advanced Science, Innovation and Research’s development of PCR tests; the manufacturing of sampling kits by a consortium led by Moroccan laboratories; as well as the production of respirators and resuscitation beds. We have solid innovation capacities in Morocco supported by our excellent engineers.
Another illustration is that nearly 20 percent of the jobs being created in Morocco’s offshoring services sector now are in information technology and engineering services, which reflects how the country has moved up the value chain in that sector. Offshoring employs more than 120,000 people in Morocco and demand continues to grow from investors in higher value-added services, particularly in mechanical and software engineering.
The kingdom’s progress in innovation, research and development (R&D) is in line with the advance of its industries, most notably its increasingly value-added manufacturing sectors. The country works hard to develop engineering and design skills in Morocco that match the needs of industrial operators, and an example of this is our support of Stellantis’ R&D hub: the African Technical Center (ATC) in Casablanca. When the project was launched in 2015, it was expected to provide jobs for 1,500 engineers by 2023—however, it has exceeded that target and already boasts an ecosystem of over 4,000 engineers.
ATC’s teams designed the small Citroën Ami and Opel Rocks-e electric cars that are now manufactured at Stellantis’ plant in Kenitra. Both models are achieving exponential growth in international sales and the company plans to increase its production capacity in Morocco as a result. The kingdom is now one of the most popular global destinations for investors in the automotive sector, as well as other industries, because of the quality and availability of its engineers. The demand for engineers continues to grow strongly and operators in the sector expect to create more than 15,000 new engineering positions over the next three years. To remain competitive, Morocco will need to train more engineers and we also need to foster improved collaboration between companies and our higher education institutions.
In terms of the potential for collaborations, I’d like to highlight the work being done at the Mohammed VI Polytechnic University which, in addition to academic excellence in fields like data science and artificial intelligence, links impressively with the needs of industries. The establishment of education institutions such as this is part of Morocco’s response to a significant, growing demand for data and software skills.
Another key entity in the digital arena is the Moroccan Digital Development Agency (ADD), which has developed a roadmap for the country’s further digital development that’s structured around 15 projects. Of these, I would like to spotlight the Fez Smart Factory—a model digital factory that aims to introduce Moroccan companies to 4.0 technologies—as a good example of what’s being done to disseminate technologies and best practices for industry 4.0 in Morocco. The smart factory will be located in a new innovation zone that launched in February and is the result of a public-private partnership involving the Department of Industry, the ADD, the Fès-Meknès region, universities, Morocco’s Sustainable Industrial Zones Fund and the U.S.’s Millennium Challenge Corporation. As well as the smart factory, on the zone’s site will be a factory school 4.0, an incubator for startups and a conference center.
Today, the world’s geopolitical position is in flux as we continue to feel the effects of the pandemic, disruptions in global supply chains and the conflict in Ukraine. Can Morocco capitalize on this unique situation?
The world is going through a difficult phase, marked by many challenges. But from these challenges are emerging opportunities for Morocco, including the increasing global demand for green energy and shorter supply chains. For example, governments and businesses in the EU and America have recognized that they were too economically dependent on Asia, and they are now looking to relocate production centers closer to their countries. Morocco is 8.7 miles away from the EU—putting it in an ideal position to benefit from these relocations. At the moment, many European and American companies with bases in Asia, as well as Asian manufacturers that supply the EU and the U.S., are in discussions with us about setting up activities in Morocco.
In addition, the conflict in Ukraine has opened the eyes of the EU and the rest of the world to their vulnerability from dependence on fossil fuels. This, added to the future carbon tax on imports that the EU will be imposing at its borders, has finally convinced global manufacturers to “green” their production. As mentioned before, Morocco offers one of the most competitive supplies of clean energy worldwide and the size of the boom in demand for competitive green energy is such that this has now become Morocco’s most prominent competitive advantage.
Morocco continues to pursue major new infrastructure, transportation and logistics projects. What are the government’s current priorities?
Although our ambition is to stimulate national and international private-sector investment, that doesn’t mean there will be a decrease in public investment. Morocco boasts European-standard infrastructure, but many infrastructure, transport and logistics projects are still needed for its ongoing development. Seawater desalination projects, for instance, are crucial in a country like Morocco that can suffer from drought accentuated by global warming. To meet that challenge, nine desalination stations have been built so far; five projects are under development in Casablanca, Laayoune, Dakhla, Safi and Nador; and 20 additional stations will be set up by 2030.
Morocco’s ports are another catalyst for private investment. Proof of this comes from the establishment of Tanger Med Port, which enabled the rapid development of the entire Tangier-Tetouan-Al Hoceima region and beyond. Eight projects covering the extension or construction of ports are under development, the largest ones being at the ports of Nador West Med, Dakhla Atlantic and Casablanca.
However, Morocco is increasingly considering the use of public-private partnerships (PPP) for its public-investment projects. A reform of our PPP law is underway, which will open up more PPP opportunities, and provide an improved framework for their development, implementation and monitoring.
Throughout the last two decades, Morocco has followed a consistent strategy in its economic development, which has been refined over the years to reflect emerging challenges and opportunities via new targeted frameworks, such as its Industrial Acceleration Plan, the Green Morocco Plan and, most recently, the New Development Model. What do investors need to know about Morocco’s development within the next five to ten years?
In my role, I oversee investment, convergence and the evaluation of public policies. It’s a new position, set up because the government wanted to create maximum synergy from its policies in those areas. Morocco’s New Development Model, as requested by King Mohammed VI, provides the overall goals for the country to achieve by 2035 and it sets the course for our priorities. Going forward, our industrial sector strategies will converge in three ways: with the New Development Model, with each other and with Morocco’s 12 geographical regions, which are key players in the country’s economic and social development.
Do you have any final comments for the readers of Newsweek?
Morocco is a land of opportunities that is currently enjoying exceptional momentum. My teams and I are committed to being able to convince any investor considering Morocco of the competitiveness of the country and its relevance in today’s global environment. I would also like to assure potential investors that they will be accompanied throughout their investment journey: they will have a professional government by their side, experienced in business practices and dedicated to their needs. Even if readers are not considering investing here, we would be happy to welcome them to Morocco and to help them discover our country, where they will enjoy an unforgettable vacation.