Bordered by the Western Sahara to the south, by Algeria to the east and Spain to the north, Morocco is in a prime strategic location for those looking to expand within Africa and Europe.
Major contributors to the economy in Morocco include agriculture, phosphates, tourism, mining and fish and seafood. Around 45 per cent of the working population is employed by the agriculture sector.
Morocco boasts a fast-growing market and has made significant economic progress in recent years since liberalising its trade regime and bolstering its financial sector. In fact, it has the sixth-largest economy on the African continent.
The country sees a steady flow of Foreign Direct Investment and international market confidence is high, thanks in part to a bilateral Free Trade Agreement with the US and an Advanced Status agreement with the European Union. However, the country continues to struggle with high levels of unemployment, poverty and illiteracy.
Morocco operates on a monarchy system with an elected parliament, but the King of Morocco holds immense power and can issue ‘dahirs’ which have the force of law. He is also able, under certain conditions, to dissolve parliament. In early 2011 there was a spate of pro-democracy protests which led to King Mohammed VI implementing a reform programme where new powers were extended to parliament and the prime minister, but ultimate authority still belongs to the king.
In terms of business culture, the official languages of Morocco are Arabic and Berber. French is also in common use and is often the language used for commercial negotiations.
UK companies already operating within Morocco include G4S, GlaxoSmithKline, Shell Vivo Energy, Unilever and Marks and Spencer.
Strengths of the Moroccan market:
- Morocco is well positioned for strategic growth both within Africa and Europe
- The country has an Open Skies Agreement with the EU and many short, cheap flights are available from London
- There is a healthy banking and finance sector
- It boasts ‘advanced status’ with the EU since 2008
- Labour costs are competitive
- Profits and dividends can be repatriated easily
Challenges of the Moroccan market:
- There is a high level of unemployment, which currently stands at around 9.1%
- Morocco scores quite poorly in the Corruption Perception Index
- Businesses in Morocco face competition from EU trading partners and growing competition from non-EU countries
- Consumer purchasing power levels are quite low, which can cause conflicts with product pricing
- High levels of poverty
- High levels of illiteracy
- The country needs to diversify and become more integrated and competitive with the wider global economy
The Casablanca Stock Exchange, the second-largest in Africa, signed a strategic and technology partnership with the London Stock Exchange in June 2014 to support the development of the Moroccan capital markets.
UK Trade and Investment has highlighted the huge potential for the UK and Morocco to combine forces in banking, insurance, participative or Islamic finance, Public Private Partnerships and capital markets.
Morocco is keen to develop renewable energy sources and end its dependence on imported energy. In 2011 around 94 per cent of energy needs in Morocco were imported. The country hopes to become more efficient and environmentally friendly.
There are opportunities for UK companies working in the following sectors: renewable energy, energy efficiency, hydrocarbon exploration, the environment, water and waste management, upstream oil and gas and minerals exploration.
Safety and security
Another of Morocco’s top priorities is improving the safety and security of its citizens. There are opportunities in policing and health and safety services for major infrastructure, sports and tourism projects that are underway.
UK companies offering fire safety services, border and access control, surveillance and detection equipment and imaging and police technology may find exporting to Morocco of particular interest.
As Morocco’s economy continues to grow, so too will its transport and infrastructure sectors. This paves the way for UK enterprises to offer their services for urban and rural infrastructure projects, new roads and rail construction, national transport development programmes, upgrades to airports, construction projects in towns and new industrial areas and construction of new leisure facilities such as hotels and resorts for the tourism industry.
Illiteracy levels are high in Morocco, and education and training services are in dire need of qualified expertise. There is a growing demand for UK enterprises offering schooling, English language provision, vocational courses and academic partnerships with universities.