Financial Times
Borzou Daragahi in Casablanca
©Bloomberg
When Morocco’s Saham insurance company looked to expand at the start of the decade, it discovered an untapped market in its own backyard: Africa. During five years it has moved via newly acquired subsidiaries or the launch of new divisions to dozens of African markets, including Angola, Rwanda, Kenya, Nigeria, Niger, Mauritius and Congo.
“We believe in Africa,” says Ghita Kittane,spokeswoman for the company, which employs 6,000 and had revenues of $1.14bn in 2013. “We believe in the potential for the growth of the entire continent.”
Johannesburg remains Africa’s commercial capital but with its strategic location, political stability and business-friendly environment, Morocco is positioning itself as a critical gateway to the continent, the fastest growing region of the world.
The country has traditionally looked north but since the global financial crisis of 2008-09, its companies have been looking for new markets to offset economic weakness in Europe. As Moroccan companies have expanded in Africa, Rabat has capitalised on the trend, marketing the country as a potential gateway to the continent for international groups too.
Led by Attijariwafa Bank and Groupe BCP as well as Maroc Telecom, which have aggressively expanded to Africa, Moroccan direct investment flows to the continent increased from about $290m in 2008 to $502m in 2010, just before the Arab uprising ushered in a new era of turmoil in north Africa and caused a dip to $106m in 2011. Flows have begun to increase again, jumping to $188m in 2012. They now account for more than 40 per cent of all the country’s new foreign investment.
Stakes of Moroccan firms in African ventures also grew, from $86m in 2002 to nearly a $1bn in 2012. Trade between Morocco and the rest of Africa has quadrupled since 2000 from about $750m to nearly $3.3bn annually by 2013.
“This continent needs the world to pay attention because of course they have resources and potential, but they need the support of some countries with experience,” Mohamed Bousaid, the country’s finance minister, said in an interview with the FT.
“That’s why Morocco is there. We understand their situation regarding water, agriculture infrastructure and other sectors that Africa needs to develop. In the next 10 to 15 years, the world’s growth will come from this part of the world.”
There have been some missteps, however. Morocco’s decision last autumn to remove itself as host of the Africa Cup football tournament in the midst of the Ebola epidemic drew accusations of racism from a number of countries. It is also the only country on the continent that is not a member of the African Union. It left the regional grouping in 1984 over the support of some African countries for the Polisario movement that is seeking independence for Western Sahara, which Morocco has sought to annex. The downgrade in recent years of its stock market from emerging to frontier market status could also deter investment.
But Casablanca, Morocco’s business hub, is an increasingly popular place for young Africans to study and is a tourism destination for the continent’s elite, with links to more than 30 African cities through the national carrier, Royal Air Maroc.
“You can’t position yourself as a gateway without making these kinds of links,” said Kareem Tazy, a Moroccan industrialist. “Morocco has one of the best networks of flights to Africa and it has cleverly positioned the national airline as natural hub between Africa and the US, and Africa and Europe.”
To lure international companies, Morocco has created Casablanca Financial City, a special regulatory zone for export-oriented companies. The status gives corporate and income tax incentives, including the lifting of restrictions on foreign currency transfers and the ability to hire expatriates, to companies that earn 70 per cent of their revenue abroad. AIG, BNP Paribas, Boston Consulting Group, Microsoft and Ford have already set up regional or African headquarters in the city.
Analysts caution that as an African hub, Casablanca remains outflanked by Dubai and Johannesburg, and is more akin to Lagos, Nairobi and Accra as a tertiary destination for multinationals.
“It’s not a gateway to Africa,” says Martin Tronquit, chief of Infomineo, a Casablanca-based research and consulting firm. “It’s a gateway to northwest Africa. For covering the whole of French-speaking western and northwestern Africa, you have only Casablanca.”
Some economists question whether the country can widen its appeal, with businesspeople complaining about the quality of the country’s workforce and the inexperience of its entrepreneurs.
“It’s preferable for westerners — it has a lot of French speakers, it has a good financial technology platform, a good strategic location, good infrastructure, good quality of life,” says Fouad Abdelmoumni, an economist and consultant for the International Finance Corporation, a branch of the World Bank. “But it’s no Dubai.”
Additional reporting by Javier Blas in London
Twitter: @borzou
