Morocco seeks to transform itself into a regional business hub by leveraging its geographically strategic location, political stability, and world-class infrastructure to expand as a regional manufacturing and export base for international companies, says U.S. latest report on global investment climate.
The North African Kingdom actively encourages and facilitates foreign investment, particularly in export sectors like manufacturing, through positive macro-economic policies, trade liberalization, investment incentives, and structural reforms, underlines the 2023 report issued by the State Department
Morocco implements strategies aimed at boosting employment, attracting foreign investment, and raising performance and output in key revenue-earning sectors, with an emphasis placed on value-added industries such as renewables, automotive, aerospace, textile, pharmaceuticals, outsourcing, and agro-industry, underlines the document.
The country continues to make major investments in renewable energy and is on track to meet its stated goal of 52 percent total installed capacity by 2030, says the report, citing the Kingdom’s ambition to increase the share of renewable energy in total energy consumption from 19.5 pc in 2021 to 40 pc by 2035. Opportunities for green investment include smart grids, green hydrogen, energy storage, and renewable energy.
According to UNCTAD World Investment Report 2022, Morocco attracted the ninth-most foreign direct investment (FDI) in Africa in 2021. Inbound FDI rose by 52 % in 2021 to $2.2 billion, vice $1.7 billion in 2020 and 2019 and a 2018 peak of $3.6 billion. France, the United Arab Emirates, and Spain hold a majority of FDI stocks.
Manufacturing attracted the highest share of FDI stocks, followed by real estate, telecommunications, tourism, and energy and mines. Morocco continues to orient itself as the “gateway to Africa,” and expanded on this role with its return to the African Union in January 2017 and the launch of the African Continental Free Trade Area (CFTA), which entered into force in 2021.
In June 2019, Morocco opened an extension of the Tangier-Med commercial shipping port, making it the largest in Africa and the Mediterranean; the government is developing a third phase for the port which will increase capacity to five million twenty-foot equivalent units (TEUs).
Tangier is connected to Morocco’s political capital in Rabat and commercial hub in Casablanca by Africa’s first high-speed train service. In 2022, Morocco introduced a series of reforms to strengthen its anti-money laundering and counter terrorist financing legislation, regulations, and criminal penalties to address the weaknesses identified when Morocco was placed on the Financial Action Task Force’s (FATF) “grey list” of countries subjected to increased monitoring due to deficiencies in anti-money laundering and terrorist financing compliance in 2021.
As a result of these reforms, in February 2023, Morocco was removed from the FATF grey list. Morocco has ratified 72 investment treaties for the promotion and protection of investments and 62 economic agreements, with several countries including the U.S. and most EU states, to avoid double taxation of income.
The North African Kingdom is the only country on the African continent with a Free Trade Agreement (FTA) with the U.S., eliminating tariffs on more than 95 % of qualifying consumer and industrial goods.
The FTA supports Morocco’s goals to develop as a regional financial and trade hub, providing opportunities for the localization of services and the finishing and re-export of goods to markets in Africa, Europe, and the Middle East.
Source: The North Africa Post