Morocco Gateway to Africa
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FT SPECIAL REPORT Morocco Gateway to Africa Thursday January 24 2019 www.ft.com/reports | @ftreports Moroccan banks, insurance firms, com- Inside panies in telecoms, mining and con- struction have established a significant presence in African countries, making Southern the kingdom a notable source of foreign direct investment in some parts of the continent. OCP, the state-controlled phosphates giant, has also invested in African countries. Moroccan invest- neighbours ments in Africa totalled some $10.2bn between 2010 and 2018, according to fDi Intelligence, a Financial Times pub- lication. Thekingdom’sinterestinitssouthern offer rich seam neighbours stems from both political and economic motives. Under the lead- Charm offensive ership of King Mohammed VI, Morocco Morocco’s Ecowas bid has used soft power, including invest- faces resistance from for growth ment, diplomacy, education and cul- trading bloc members Page 2 The largest three Moroccan banks have increased their Banking on a continent Lenders defy risks to Rabat uses diplomacy to bolster its economic and presence in Africa to some 23 per cent of their loans pursue high returns political standing in Africa, writes Heba Saleh Page 3 hen economic growth industry; or to invest in industry, but tural relations to carve out a sphere of Opinion Jon Marks slowed in Morocco after out of Morocco.” Mr Tazi spent a year influence in the continent, which bene- the global financial and a half visiting sub-Saharan coun- fits its economy and enhances its inter- The kingdom’s crisis in 2008, it tries to find companies to buy or team national standing. In recent years, the southward strategy W prompted Richbond, a up with. He finally settled in 2014 on a king has toured African nations signing hints at a new 60-year-old industrial group, to start greenfield investment of $17m to set up agreements in a high-profile outreach lookingforanewstrategy. a mattress factory in Ivory Coast. “The effort, which has helped pave the way post-colonial order By2012,theleadingMoroccanmanu- huge and powerful presence of Moroc- for Moroccan companies. Much of this, Page 4 facturerofplastics andfoam mattresses can banks there was an encourage- analysts say, has been in support of had decided to seek opportunities in ment,” he says. “Ivory Coast is also a Morocco’s primary foreign policy con- Casablanca’s rebrand fast-growing markets in sub-Saharan gateway to west Africa and of course cern — to shore up international back- Africa to make up for flatlining reve- therearedirectflightsfromMorocco.” ing for its claim over the disputed terri- Finance hub is emblem nues at home. “We needed growth and Mr Tazi was following other Moroc- toryofWesternSahara. of push south to tap we needed to diversify,” says Karim canentrepreneurswhohavebeenpush- Morocco already controls most of the African markets and Tazi, one of two brothers who run the ing into sub-Saharan Africa for more territorybutitssovereigntyiscontested familybusiness.“Wehadtwochoices:to than a decade in a bid to expand bythePolisarioFront,theAlgeria-based growth either invest in Morocco, but out of beyond their limited domestic market. Phosphate mining: OCP is expanding into African markets Continuedonpage2 Page 5 2 ★ FINANCIALTIMES Thursday 24 January 2019 Morocco Gateway to Africa Trade Country’s ties with US and Europe among causes of members’ scepticism, writes Neil Munshi Members of the Economic Community of West African States (Ecowas) MOROCCO ALGERIA Western Sahara CAPE MAURITANIA VERDE MALI NIGER Stuck on the SENEGAL GAMBIA BURKINA FASO GUINEA GUINEA- BISSAU IVORY NIGERIA bloc: Ecowas COAST SIERRA LEONE LIBERIA GHANA BENIN bid still faces TOGO resistance hen President Muham- with many of the bloc’s members. Slow progress: potential tariff-free back door into west Ecowas membership even less of a pri- and American goods, Mr Fabiani says. madu Buhari made the Ecowas members Nigeria, Senegal and Nigeria’s Africaforforeigncompanies. ority. These goods are not taxed when they first trip to Morocco by Ivory Coast are among the biggest Afri- president Resistance has been strongest in Christophe Charlier, chairman of reach Morocco, so it could become a a Nigerian head of state can buyers of Moroccan goods, while Muhammadu Nigeria.“WhatisMoroccogoingtobring RenaissanceCapital,theRussianinvest- conduit through which European and W last June, he was Morocco has made significant invest- Buhari, left, and tothetableandwhatwillbethebenefits ment bank, says Morocco’s bid is a logi- US companies start “invading” Ecowas received with great pomp by King mentsacrosstheregioninbanking,tele- Morocco’s King to the members of the community, par- cal step, building on development withtariff-freegoods. Mohammed VI at the airport in Rabat. communicationsandinsurance. Mohammed VI in ticularlyourowncountry?”saysMansur across the region, which includes There is also the matter of the dis- The pair waved as theywere driven past Morocco first applied in 2017, soon Rabat last June Ahmed, president of the Manufacturers MoroccanphosphategiantOCP’sinvest- puted territory of Western Sahara. cheeringcrowdstotheroyalpalace. after it rejoined the African Union, con- AP Photo/Abdeljalil Bounhar AssociationofNigeria.“Generallywedo ments in Nigeria, Attijariwafa Bank Morocco annexed the former Spanish A Nigerian government statement fidentthatgoodrelationswiththebloc’s not see any direct benefits to the com- expanding across francophone west colony in 1975 and has been in dispute noted how the two leaders agreed on members would smooth its entry.It has munity.”He says Morocco’s links to the Africa, and Moroccan real estate devel- withthePolisarioFront,which declared investment projects in fertilisers, agri- sincesignedinvestmentpactswithmost US and Europe could lead to dumping opers building in Abidjan. “Full mem- independence in the eastern part of the culture and chemicals, and reaffirmed of Ecowas’s 15 member states yet has and put it “at a significant advantage bershipwillconsolidatethepoliticalsta- territory the following year.The African plansfora5,660kmpipelineconnecting faced opposition from those countries. over the other members of the west tus of Morocco in the region.”Now that Unionandmanygovernmentshaverec- Nigerian gas reserves to Morocco and a Its membership — agreed in principle Africancommunity”. Moroccan companies have developed ognised the Sahrawi Arab Democratic dozencountriesinbetween. two years ago — was reportedly not on TheMANisaleaderofaconsortiumof across Ecowas, moving services and Republic. Mr Buhari, like many west But what is widely seen as the king’s the agenda at December’s meeting of trade groups representing manufactur- products across countries will create ‘Being able African leaders, has backed the inde- underlying motive for his extravagant Ecowas heads of state. Matters have not ers, chambers of commerce and small significant value for Morocco and the to move pendentnation. reception of the most influential mem- movedforwardsince. business that in 2017 released a paper bloc,hesays. Yet Imad Mesdoua, senior analyst at ber of the Economic Community of Therearemanyobjections:Morocco’s arguing “Morocco joining Ecowas is a Morocco sees itself is as a hub for services and consultancy Control Risks, sees scope West African States (Ecowas) went bid is ambiguous, with no clear indica- direct attempt at reducing the influence western companies to offer goods and products for compromise to allay Ecowas mem- unmentioned: Morocco’s desire to join tions about its true intentions and and strength of Nigeria as a strategic services to west Africa, says Riccardo bers’ concerns. “This would be likely to theregionaltradingbloc. whether it will obey Ecowas’s rules, political and economic force”.The asso- Fabiani, a political analyst at Energy across include a prolonged transition period JoiningEcowasisseenasacrucialfirst from tariffs to free movement; Morocco ciation has also led opposition to the Aspects, a research consultancy. “The countries aimed at reducing the economic differ- step in Morocco’s efforts to position is a far more developed country than Africa Free Trade Agreement, a conti- problem is [that] in that way Morocco ential between Ecowas countries and itself as the west’s gateway to Africa. It any in Ecowas and would join from a nental pact that Nigeria has not yet would become a sort of Trojan horse for will create Morocco,” he says. “For example, some makes sense: while not contiguous, position of power; Morocco has its own joined. Mr Ahmed says his group wants EUandUScompaniesintowestAfrica.” significant members might be granted tariff-free Morocco is in Ecowas’s neighbourhood, free trade deals with, among others, the to study it further before Nigeria signs Ecowas has a common trade policy, access to the Moroccan market without and it shares a francophone connection EU and the US, which could create a thepact,whichmakesMorocco’sbidfor which means it has a tariff on European value’ automaticreciprocity.” Seville km SPAIN Southern PORTUGAL Gibraltar Mediterranean Algiers Sea neighbours Tangier Rabat NORTH ATLANTIC Casablanca offer rich OCEAN Marrakesh seam for MOROCCO ALGERIA Canary growth Islands (SPAIN) MAURITANIA Western Sahara Continuedfrompage1 through initiatives which include train- already becoming more international Sahrawi movement demanding inde- ing imams, offering scholarships to sub- and the policy of our king was to push pendence for Western Sahara, a former Saharan students at its universities, and strongly to develop investment