By Joanne Harris
Investors are enchanted by Morocco’s promise, particularly its political stability
For the past three years Morocco has been a relative island of calm amid the turmoil of some of its neighbors. King Mohammed VI acted swiftly in 2011 to institute constitutional reform when the Arab Spring took hold and, while this did not stop Moroccans taking to the streets in protest over government policy, generally the country has remained stable.
As a result, while Morocco is still a smaller economy than its neighbors Algeria and Tunisia, it is gaining a reputation as a safe place for companies to have a North Africa – or even whole-of-Africa – hub.
“In the past couple of years a number of multinationals have relocated their hubs to Casablanca,” says Mehdi Bennani, a partner at Casablanca firm Bennani & Associés. “Morocco is an old country with old fundamentals – Moroccans themselves didn’t realize that until the Arab Spring. The effect was minimal in comparison with other countries.”
Confidence
In the past year Morocco has seen several large M&A transactions demonstrating confidence in the country. One of the most notable was the mid-year acquisition of a €4.2bn (£3.5bn) stake in Maroc Telecom by the Emirates Telecommunications Corporation (Etisalat) from Vivendi.
The deal gave work to both international and local Moroccan firms, with Freshfields Bruckhaus Deringer acting for Etisalat alongside Bennani & Associés and Gibson Dunn & Crutcher representing Vivendi together with Moroccan firms Kettani Law Firm and Saaidi Hdid Consultants. Freshfields and Gibson Dunn, neither of which have Morocco offices, managed the work out of Paris.
France continues to be a key source of work for Morocco. Historical and cultural links have long made French investors comfortable with turning to Morocco, and several French firms – including August & Debouzy, Gide Loyrette Nouel, Lefèvre Pelletier & Associés (LPA) and UGGC – maintain offices there.
However, these have been the subject of raids by international firms in recent years. Gide was the source of the team that founded Allen & Overy’s presence in Casablanca, and August & Debouzy lost lawyers to Baker & McKenzie.
LPA Casablanca partner Romain Berthon says French interest in Morocco has increase recently. He describes talking to two French real estate companies that had been thinking about investing in Spain but, instead, chose Morocco. Berthon says the move took him by surprise, especially as the companies concerned had not previously ventured outside Europe.
He believes Morocco is a good place for a first investment in Africa and several domestically headquartered companies are now looking at sub-Sahara.
“Many Moroccan companies in the banking and insurance industry have invested a lot in sub-Saharan Africa,” says Berthon.
Bennani agrees that flows of work into other parts of Africa are picking up, and that traditional boundaries between language and culture are breaking down.
“The investment the country has made with its African counterparts has started to generate results,” he says. “There are companies looking to use Morocco as a bridge to some other North African countries.”
This, he adds, is particularly true of Middle Eastern companies with subsidiaries or bases in Morocco.
But there is also plenty going on on the ground in Morocco. Bennani praises a “well thought-through” government programme that has ensured the country does not rely solely on tourism and real estate for growth, and points to sectors such as the automotive and aviation industries as drivers.
“Boeing and Airbus both consider Morocco as a country of excellence in plane maintenance and repair,” Bennani says.
Infrastructure is another major area for firms to focus on.
“This is a country that’s being built left and right,” says Bennani. “Cities need trains, they need metros and they need roads.”
Berthon agrees.
“There are some big projects going on in Morocco and it’s incredible to work on them,” he says.
The local legal market is likely to continue to attract interest from foreign players, but Bennani believes there is a real need for local firms such as his, built on Anglo-Saxon lines, and that this sector of the market has room to grow.
Both Bennani and Berthon are confident their jurisdiction will continue to ride the wave of instability in the wider region, and be a thriving legal market in the future.
Key figures: Morocco
GDP: $96bn
Inflation: 1.7%
Population: 33m
Life expectancy at birth: 70
Unemployment: 9.1%
Source: World Bank, Haut-Commissariat au Plan
