Long-term vision brings economic transformation
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The sustainable, competitive, well-proven and agile kingdom is providing solutions to global challenges faced by industries
King Mohammed VI of Morocco
Last year, Morocco’s gross domestic product (GDP) expanded by 7.4 percent as the country proved itself to be, in the words of Jihad Azour, director of Middle East and Central Asia at the International Monetary Fund, “one of the most dynamic in adjusting and adapting to the constraints but also to the opportunities” presented by COVID-19.
Agility is a defining characteristic of the politically and economically stable North African nation which has, under the leadership of King Mohammed VI, taken far-sighted and consistent decisions that have transformed it into a competitive and sustainable production and exporting platform for diverse industries over the last two decades—a period in which itsGDP has more than tripled to $131 billion, its industrial added value has multiplied over 2.5 times and its export turnover has grown four times to hit $24.4 billion.
One of Morocco’s long-term strategies for achieving this has been to capitalize on its Mediterranean and Atlantic seafront location just 9 miles from Europe through vast investments in transport and logistics infrastructure. Most prominently, the built-from-scratch Tanger Med Port now ranks as the world’s 25th-largest container port on Lloyd’s List and enables Moroccan-made exports to reach the center of Europe in 72 hours. The country was a pioneer in green energy as well, says Mohcine Jazouli, Minister Delegate for Investment, Convergence and Evaluation of Public Policies: “Morocco has established itself as a leading player in sustainable development. Renewables represent 37 percent of our installed energy capacity today and our ambition is 52 percent by 2030.”
Another focus has been amassing a portfolio of free trade agreements covering more than 50 countries and giving exporters access to over 1 billion consumers in Europe, the U.S., Africa and the Middle East. At the same time, about 120 specialized industrial zones have been created and reforms made to improve the business and investment climate.
Morocco has also invested heavily in industrially targeted higher education and training for its young population. Every year, for instance, 24,000 newly graduated engineers and technicians enter the job market and, demonstrating the kingdom’s commitment to gender equality, 42 percent of them are women.
Together, these factors have catalyzed the development of globally important value-added industrial sectors. For instance, notes Ali Seddiki, director general of the Moroccan Agency for Investment and Export Development, “Morocco is the leading African producer of passenger vehicles. Renault and Stellantis operate here and they’re supported by an ecosystem of over 250 companies. Another example is our world-class aeronautics sector: all Boeing and Airbus aircraft contain at least one Made-in-Morocco part.”
“Morocco’s decarbonization project will allow industries to gain in competitiveness. It will be a structuring element in the years to come.”
Luca de Meo, CEO, Renault Group
But the country wants to go further. In 2021, Morocco released its New Development Model—a detailed, credible roadmap for driving its economy and society forward to 2035. The plan is solidly founded on continuing along the same path followed over the last 20 years, but the vision behind it has been refined to deliver inclusive and sustainable economic growth in excess of 6 percent a year on average. The scale of ambition is clear from the level of financing envisaged for realizing its objectives: 4 percent of GDP between 2022 and 2025, which will rise to about 10 percent by 2030. Some of this will be allocated to areas like education, infrastructure and revisiting investor incentives in order to foster an even more productive, innovative, value-added and internationalized economy.
Already, however, Morocco’s transformation has turned it into a destination that offers solutions to challenges companies face today, such as the need for localized production as the world’s value chains are reshaped or disrupted. Automotive-technology giant Lear Corporation is one that is benefiting from this, explains Gideon Jewel, president of global just-in-time operations: “We’ve been able to do things faster in Morocco than in other countries and that’s huge for us. During the tragic war in Ukraine, we’ve moved business here and used the agility in Morocco to support our customers.”
On the other hand, a firm that has taken advantage of Morocco’s green credentials is Renault Group, which operates the world’s first zero-emissions car plant in Tangier. According to its CEO Luca de Meo, the country has “made the strategic choice to develop its renewable energies and reduce its carbon footprint. Morocco’s decarbonization project will allow industries to gain in competitiveness. It will be a structuring element in the years to come.” As Seddiki points out: “Companies are looking for competitive and carbon-free regional production platforms—and that’s precisely what Morocco has been methodically building over the past 20 years.”