Can Morocco Become A Global Aeronautics Player?
In 2005, McKinsey & Co, the global consulting company, conducted at the request of the Moroccan Government a report on the country’s economic strategy and drafted a comprehensive industrial program known as “Emergence”. The program listed several promising sectors likely to grow in which the country had to focus in order to achieve rapid development.
Oddly enough, this strategy plan did not identify Aeronautics as a possible key sector for the Kingdom. At the time, McKinsey’s believed that Morocco simply didn’t have “what it takes” to invest in this field.
Too much technology involved, not enough infrastructures, and lack of skilled workers were amongst the main challenges identified by the consulting firm.
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Yet, for the past ten years, Morocco has been developing an ambitious aeronautics industry worth nearly a billion dollars. Foreign Direct Investments (FDI) have been pouring into this very competitive sector, in which the Kingdom wasn’t meant to invest in the first place.
Throughout this period, some key world players such as Boeing, French companySafran and Canadian manufacturerBombardier, made substantial investments in building “increasingly sophisticated factories” . Over the last months, the pace of foreign investment in aeronautics even seemed to accelerate.
Last Wednesday, during the Farnborough air show in London, two new major investments totaling 45 million euros (US$61 million) were announced by the Moroccan government with Aerolia – a subsidiary of Airbus group- and Alcoa , a world leader in aluminum production .
With these new investments, Morocco hopes to give a strong signal to the Market that it is ready to become a “global” aeronautics player, attracting spare-parts manufacturers as well as services providers in this field.
Actually, a combination of conjectural and structural changes allowed Morocco to become an increasingly credible aeronautics player. The new industry, which employs some 10,000 people, accounts now for 5% of Morocco’s exports.
At the regional level, Morocco was able to overcome the “Arab spring” turmoil through a constitutional reform that redistributed executive powers between the Monarchy and the government. This “silent revolution” allowed Morocco to be perceived as “resilient” by major aeronautics firms, which have long-term investment cycles and for which stability and security on the long run are a key issue. For some analysts, the boom of aeronautics contributed to the country’s resilience.
On the structural level, the global aeronautics industry is changing rapidly and is looking for countries where the development of a sectorial cluster is possible. This is precisely the path chosen by Morocco through its new industrial strategy based on the promotion of industrial ecosystems through tax incentives and subsidized training programs.
“Our goal is to build complete planes in the next ten years”
The instigator of this strategy , Moroccan minister of industry and eminent African entrepreneur, Moulay Hafid Elalamy, is therefore enthusiastic about the potential of this sector and hopes that Morocco will be able to “build complete planes in the next ten years”.
Although a step towards this direction has definitely been taken, some obstacles remain in order for Morocco to become even more attractive for major aeronautics players.
Amongst those challenges the country is facing, red tape and obscure administrative procedures –mostly inherited from the colonial complex French administration- have to be addressed in order to ease the installation of industrial actors at large.
A recent report released by the consultative body of the Moroccan Government, the Social and Economic Council , pointed out that Morocco needs to merge all its economic promotion agencies into one single structure and to endow this structure with important financial means and significant leadership capabilities.
According to Paris-based weekly Jeune Afrique- usually well informed- the Moroccan government is considering creating a super-structure to be calledMoroccan Agency for Trade Investment and Services (MATIS) , which would “rationalize its promotion efforts”.
Many analysts deem this move, if it comes to fruition, would mean a radical shift in Morocco’s administrative culture, going from a French model with a lot of specialized agencies to a more U.S.-inspired model, with one big agency in charge of global promotion, like the U.S. Department of Commerce.
This would be a revolution and would mean that Morocco is no longer projecting itself solely across the Mediterranean, but is seeking to create a tridimensional economic dialogue between the Americas,Europe, and Africa.
In short, this means that the Kingdom is finally embracing globalization thanks to its competitive advantages: location, labor cost, and stability.
