Sparked in Tunisia, the Arab Spring inflamed Egypt, engulfed Libya and exploded in Syria. Meanwhile in Morocco, peaceful protests somewhat fizzled out following mild reforms. This relative stability has helped Morocco become north Africa’s foremost destination for greenfield foreign investment since 2011, clinching victory from top contender Egypt.

Since the Arab Spring began in December 2010, initiating mass anti-government protests across the Arab world, Morocco has received the most greenfield FDI projects in North Africa, numbering 522 in August 2018, according to fDi Markets, an FT data service. Following closely is Egypt with 423 projects, Tunisia (151), Algeria (127) and Libya (26).

In fact, on this benchmark, Morocco is the the third top destination in the entire Arab world for FDI, right behind the UAE’s 2321 projects and Saudi Arabia’s 695, finds fDi Markets. In terms of job creation from FDI projects, Morocco is the Arab world’s leader, with an estimated 134,001 jobs created since January 2011, mainly due to its thriving automotive industry which has accrued 82,216 (64%) of these jobs.

Morocco’s main FDI rival in North Africa is Egypt who, before the Arab Spring, was ‘FDI King’ with 454 projects received since January 2003, while Morocco garnered 415. However, to this day, Egypt continues to beat Morocco in terms of FDI capital expenditure, gaining a whopping $128bn since 2011 (the most in the entire Arab world), while Morocco totals $27bn.

Nonetheless, Morocco punches well above its weight, outperforming the size of its economy. In this regard, the country is north Africa’s leader  and in the global top 20, according to fDi’s Greenfield FDI Performance Index, both in 2016 and the recently released 2017 report, which uses a methodology devised by Unctad and applies it strictly to greenfield FDI (defined as new physical facilities in a foreign country).

In this vein, Morocco performed excellently before 2011 too, contributing to the country’s relative economic stability, and therefore, resilience against the Arab Spring.

When asked about the country's FDI success, Morocco’s minister of economy and finance, Mohamed Boussaid, told fDi:“It’s simple. [Morocco] is politically and economically stable...and offers many sector opportunities. Morocco is a very respectable market with 34 million inhabitants, but also a platform that is integrated in global value chains, and a bridge to Africa.”

Morocco’s strategic location and strong manufacturing industry have led numerous multinational companies - such as Renault, Peugeot, Boeing and Bombardier - to set up shop in recent years. The country’s traditional exports, phosphates and textiles, have been replaced by automotives, with 650,000 vehicles exported in 2017.

Morocco’s growing diversification is clear. Most greenfield FDI projects have gone into financial services, IT, automotives, tourism, real estate, logistics, and electronic components – in order of descent – while large amounts of capital have been put into traditional and renewable energy, finds fDi Markets.

However, the country continues to rely heavily on France and Spain for trade and investment. Indeed, 45% of all FDI projects into Morocco since 2003 have come from those two countries.

Nonetheless, Mr Boussaid said: “In the past seven to eight years, Morocco’s partnerships have been changing. For example, our trade with Africa has doubled from 5% to 10% of our [total] trade. We have a strategic relationship with Russia and China. China is now investing in Morocco.”

Indeed, greenfield FDI from China was non-existent before 2012, but has been growing steadily ever since, mainly in the form manufacturing projects. For example, in December 2017, Chinese automotive specialist, BYD, announced plans to establish four new electric vehicle manufacturing facilities in Mohammed VI Tangier Tech smart city, thereby creating 2500 jobs.

"We want to benefit from Morocco's geographical location, as a gateway to Europe and the African market," said BYD’s chairperson, Wang Chuanfu.

Since October 2016, a question mark has been raised over Morocco’s all-important political stability, following mass protests against ‘government discrimination and neglect’ in the Rif region that is dominated by Berbers, an ethnic minority group. Thus far, the government has managed to keep a lid on things.

“The Rif region is of course part of Morocco, but with a specific history and geography...We believe we need to make our growth more inclusive [and] taking care of wealth distribution. We believe that the regionalisation of the past few years – giving the regions’ more liberty – is a good solution to the Rif's socio-economic problems,” argued Mr Boussaid.

This article is sourced from fDi Magazine
fDi Magazine

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