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ISSUE IN FOCUS BY J. PETER PHAM AND RICARDO RENÉ LARÉMONT Morocco’s Emergence as a Gateway to Business in Africa AUGUST 2014 Africa is home to seven of the ’s ten fastest- growing economies.1 By 2050, the continent’s Africa Center population is expected to overtake ’s and The Atlantic Council’s Africa Center was established China’s, doubling to two billion people. Moreover, those two billion Africans will be younger than their strong geopolitical partnerships with African states counterparts in every other region of the world and in September 2009 with the mission to promote will account for one in four workers globally by mid- toward strengthening economic growth and century. Africa’s rich endowment of natural resources, prosperityand to redirect on the US continent. and European policy priorities including about 30 percent of the world’s known The Africa Center provides thought leadership reserves of minerals and 60 percent of the planet’s on emerging security, geopolitical, and economic uncultivated arable land, is already well-known to challenges in Africa through congressional investors.

But corruption, burdensome and ambiguous a robust media presence. The Center assists regulations, underdeveloped resources, policymakerstestimony, publications, in addressing briefings, the complex events, security and poor infrastructure, and insecurity continue to pose challenges facing Africa, including the problems of state collapse; humanitarian crises; ; the opportunities on the continent. growing nexus between extremism and criminality significant challenges to businesses looking for Morocco provides a potential solution. A bastion transitions in ; ongoing challenges of stability on the doorstep of an often-turbulent in and the Sahel; the ongoing political continent, it is also a rising economic power, whose impact of Islamist extremism on African polities burgeoning economic and commercial links—across andin Central economies. and Southern Within the Africa; context and of the the growing Atlantic the continent and beyond—and its expanding contributions to regional political stability and leadership and engagement in international security2 make it an especially attractive portal for affairs,Council’s the work Center to promotesupports constructive and collaborates US with the public and private sectors in forging also the only country on the African continent to have practical solutions to challenges and opportunities investment and a significant US partner in Africa. It is in Africa, especially those associated with the a pact renewed and furthered as recently as 2013 by a strong economic growth that many nations on the tradesigned facilitation a trade agreement. agreement with the , continent have experienced in recent years.

Improving Macroeconomic Conditions 1 The seven African countries are , , , the Morocco has undertaken aggressive reforms that have Democratic , , , and ; the other of foreign investment in Africa.3 It has moved up to Business Challenges and Opportunities in Africa three “top ten” countries are China, India, and . See Lois René resulted in it becoming one of the top five recipients Economist, Berman and Sakina Balde, 6, 2011, . (London: Euromonitor International, 2013); “The Lion ?,” http://www.economist.com/node/17853324 3 Wilhelmina Maboja, “S. Africa Top Investment Destination in Africa but Development,” Atlantic Council, 2013, 2 J. Peter Pham, “Morocco’s Vital Role in Northwest Africa’s Security and Nigeria Close Behind,” CNBCAfrica.com, October 18, 2013, http://www. . . http://www. cnbcafrica.com/news/special-report/2013/09/09/safrica-top- atlanticcouncil.org/images/publications/Moroccos_Vital_Role.pdf investment-destination-in-africa-but-nigeria-close-behind/ J. Peter Pham is the director of the Atlantic Council’s Africa Center. Ricardo René Larémont is a nonresident senior

fellow in the Africa Center and a professor of political science and sociology at Binghamton . seventy-seventhPresident Ibrahim Boubacar place on Keïta the of WordMali welcomes Economic Forum’sMohammed VI of Morocco to in February 2014. competitiveness ranking, making it the third highest and an unwieldy property registry. Women’s economic participationcapital controls, still complex hovered hiring around and 258 firing percent processes, in 2012, and it has jumped twenty-nine places in three years in 4 and youth unemployment remains stubbornly high. theranked World African Bank’s country Doing afterBusiness South report. Africa5 and , But given Morocco’s recent record of economic reforms,9 there is reason to hope it will make headway on these issues as well. In fact, the General Confederation of of reforms initiated in the last years of the reign of the The last decade has seen Morocco reaping the benefits private business association,10 has been led for the past current , his son Mohammed VI. Economic twoMoroccan years byEnterprises a woman, (CGEM), Miriem Bensalahthe country’s Chaqroun, largest growthlate King accelerated II and from the an first average years of of 2.2 the percent country’s to 5 percent, its external debt to GDP ratio fell some 65 groups.chief officer of the Holmarcom Group, one of Morocco’s top-five industrial, commercial, and financial rosepercent from from poverty, 79 percent6 leading in 1999the then-managing to about 14 percent director by Established “Beachhead” Investments in ofthe the end International of 2009, and Monetary more than Fund 1.5 millionto describe Morocco Numerous African Countries as a “pillar of development in the region.” 7 But challenges remain. Morocco still grapples with an constitutionalWhen Malian President order to the Ibrahim country Boubakar after an Keïta eighteen- often challenging regulatory environment, including monthwas inaugurated hiatus following in September the March 2013, 2012 thus coup restoring and the collapse of government authority in the north, 2013-2014 Global Competitiveness Report

4 Klaus Schwab, ed., , (Geneva: . African or Arab head of state to attend. The king’s World Economic Forum, 2013), p. 15, http://www3.weforum.org/docs/ 5 The Doing Business reports compiled by the World Bank and the Moroccan King Mohammed VI was the only North WEF_GlobalCompetitivenessReport_2013-14.pdf International Finance Corporation are available at . Foreign Policy http://www. doingbusiness.org/Reports 8 Dalibor Rohac, “The Moroccan Model?,” , July 16, 2013, http:// the ,” Carnegie Endowment for International Peace, Carnegie 6 Lahcen Ahcy, “Morocco’s Experience with Poverty Reduction: Lessons for www.foreignpolicy.com/articles/2013/07/16/the_moroccan_model. Papers 25, December 2010, 9 World Bank, “The Challenge of Youth Inclusion in Morocco,” May 14, 2012, . youth-inclusion-in-morocco. http://carnegieendowment.org/files/ http://www.worldbank.org/en/news/feature/2012/05/14/challenge-of- 10 morocco_poverty1.pdf Conclusion of his Visit to Morocco,” International Monetary Fund, July 31, including industry, commerce, and services—and varying sizes, although 7 “Statement by IMF Managing Director Dominique Strauss-Kahn at the Founded in 1947, CGEM is comprised of business from different sectors— .

2008, https://www.imf.org/external/np/sec/pr/2008/pr08186.htm 95 percent of its membership consists of small and medium enterprises.

2 ATLANTIC COUNCIL presence at the head of a large Moroccan delegation amounted to an average of $300 million annually. the 1990s, Moroccan trade with sub-Saharan Africa fromwas reflective the kingdom’s of the previous country’s neglect push to of expand the continent ties with followingsub-Saharan the African ill-considered countries, embrace a symbolic of the reversal separatist Since 1998, it has averaged $529 million annually and reachedFurthermore, $1 billion Morocco in 2008. has reinforced its presence in Democratic Republic by the now-defunct Organization several African-related forums, such as the Franco- and11 its phantom Sahrawi Arab summits. And Moroccan foreign direct investment of African Unity. African summits and the first Africa-

MOROCCO HAS country’soutflows to renewed sub-Saharan emphasis Africa on have Africa increased is even writtenmore intothan the 40 percent2011 constitution, over the course which of pledges the decade—the the nation to UNDERTAKEN “consolidate relations of cooperation and of solidarity with the peoples and countries of Africa.”13 During AGGRESSIVE a speech in Côte d’Ivoire, the Moroccan sovereign REFORMS THAT expandedMorocco...fully upon this commitment: assumes its African vocation, which it has always had throughout its history... HAVE RESULTED [But] cooperation formerly based on the IN IT BECOMING relationship of trust and historical links, is now

ONE OF THE TOP Itincreasingly is the pledge based of tangible on efficiency, results, performance, measurable progress,and credibility. and the Efficiency ability to always meet expectations.bears fruit. It FIVE RECIPIENTS ensures quality and generates trust. Credibility means that the riches of our continent must, OF FOREIGN atfirst the and heart foremost, of their benefit economic the partnerships.peoples of Africa. In INVESTMENT IN itsThis opening implies up, that Africa South/South will continue cooperation to develop is fruitful relations with the countries with which AFRICA. it has the deepest historical relations and the

The king returned to just a few months later, in asset, these links alone are not enough. They mustgreatest now affinities. be accompanied But, while by they credible are a action definite and that resulted in more than eighty bilateral agreements constant commitment. withFebruary four 2014,countries. on the12 These first leg are of in a additionthree-week to the tour 14 A number of Morocco’s top companies have been seventeen bilateral trade agreements with other key to the country’s integration project in Africa. African countries the king had concluded earlier is not only Morocco’s largest during his reign as well as the accords signed with telecommunications company, but it is also the market leader in French-speaking Africa. The company has in May 2014. The numbers are compelling: in well over thirty million subscribers between its 11 Morocco and the longstanding controlling interests in mobile telephone : Prospects for Re-engagement and Progress on the Western See Terence McNamee, Greg Mills, and J. Peter Pham,

(Johannesburg: , February 2013), ht t p:// firms in , , Mali, and , . 13 Preamble of the Moroccan Constitution. For an English , see www.thebrenthurstfoundation.org/Files/Brenthurst_Commisioned_ 12 Hill Reports/Brenthurst-paper-201301-Morocco-and-the-AU.pdf Referendum of 1 July 2011,” in World Constitutions Illustrated, ed. Jefri Ray J. Peter Pham, “Morocco: Willing and Able in Africa,” , February 19, Jefri J. Ruchti, “Morocco: Draft Text of the Constitution adopted at the morocco-willing-and-able-in-africa; “Morocco’s Role in Africa,” 2014, http://thehill.com/blogs/congress-blog/foreign-policy/198635- Economist . Ruchti, (Buffalo: William S. Hein & Co., Inc., 2011), http://www.ancl-radc. ; and (blog), , February 25, 2014, http://www. org.za/sites/default/files/morocco_eng.pdf economist.com/blogs/pomegranate/2014/02/moroccos-role-africa 14 “Texte intégral du discours de SM le Roi au Forum économique maroco- Thomas Hubert, “Moroccan King Plays Up Business, Religious Ties on ivoirien à ,” Arabe Presse, , 2014, ht t p:// . discours-de-sm-le-roi-au-forum-economique-maroco-ivoir. African Tour,” 24, March 5, 2014, http://www.france24.com/ www.map.ma/fr/discours-messages-sm-le-roi/texte-integral-du- en/20140305-moroccan-king-plays-business-religious-ties-african-tour/

ATLANTIC COUNCIL 3 and more recently acquired mobile voice and data operations in , the , Gabon, across Africa, including those in support of other Côte d’Ivoire, , and .15 Moroccan firms are also active in infrastructure projects

million,investors. to Lastrebuild year, the Buzzichelli infrastructure Maroc, of forthe example, French MOROCCAN mininglanded agiant contract Areva’s estimated operations to be in worth Arlit, Niger.about This$75 out in recent years in and Mauritania, in COMPANIES additionfollows on to electrification the work it has projects done for Buzzichelli various foreign has carried

ACCOUNTED FOR Turkish conglomerate Tekfen. Meanwhile, in March firms, including Siemens, Mitsui,17 Daewoo, and the NEARLY 9 PERCENT reached an agreement with the Republic of the Congo to2014, have the one Moroccan of its subsidiaries, developer, Ciment the Addoha de l’Afrique Group,

OF THE BUSINESS Noir which will produce one million tons by the time it is(CIMAF), fully operational build a new cement year. plant A part outside of that of production Pointe- TRANSACTED IN will, undoubtedly, go into the18 construction of some AFRICA. was subsequently announced, the company would begin fifteen thousand units of affordable housing which, it an almost €250 million investment. There are other examples of major Moroccan companies building in Congo- in July19 2014, representing aggressively expanding into the rest of Africa. The Managerial and Financial Expertise chairman of OCP, Morocco’s largest commercial enterprise and the world’s largest exporter of and seventy-fourThe companies Stock Exchange and has (CSE) a total is capitalization one of the oldest on the African continent and as of June 2014 lists aderivatives, local production accompanied unit for the mineral King duringfertilizer his that most will recent generateAfrican tour. more An than agreement a million was tons signed a year in exclusively Mali to finance for toof almostbroaden $57 its billion.activities Earlier in Africa, in the and year, has the been CSE training signed the African market, with much of that amount targeted an agreement with the London Stock Exchange Group20 for Mali and other countries in the region. These efforts have been rewarded as Casablanca entered A second agreement created a $2.3 billion joint venture three thousand people a year in financial education. with Gabon to build fertilizer production plants, one in second in the world despite not being previously listed.21 each country, which will be fed by Moroccan phosphoric the Global Financial Centers Index in March 2014 at sixty- acid and Gabonese ammonia, with the resulting fertilizer to be applied to undernourished soils across important role in preparing the ground for the country’s the region. The latter project includes the construction reengagementMoroccan financial with institutionsAfrica, but also, have through not only their played an

ammonia from natural gas.16 Even Morocco’s largest in Gabon of Central Africa’s first factory to produce Niger,” Les Eco Afrique de Chocolaterie, has joined the fray with plans to build 17 Safall Fall, “Buzzichelli Maroc décroche un gros contrat auprès d’AREVA au chocolate manufacturer, the Compagnie Chérifienne , July 8, 2013, http://www.actuniger.com/ a forty thousand ton-per-year factory in Cameroon, aupres-dareva-au-niger.html. societe/310-societe/5974-buzzichelli-maroc-decroche-un-gros-contrat- Le Matin, March Morocco’s minister of industry, trade, investment, and 18 “Une cimenterie du groupe Addoha au Congo-Brazzaville,” . thewhile digital the Saham economy Group, last whoseyear, has chairman emerged was as theappointed largest 24, 2014, http://www.lematin.ma/journal/2014/maroc-afrique_

une-cimenterie--du-groupe-addoha--au-congo-brazzaville/199213.html business in twelve countries. 19 “15.000 logement sociaux au Congo: Addoha lance la construction en juillet prochain,” Maghreb Arabe Presse, May 12, 2014, http://www.lematin.ma/ insurance network in Africa outside , doing . express/2014/-15000-logements-sociaux-au-congo-_addoha-lance-la- 20 construction-en-juillet-prochain/202056.html 15 Mfonobong Nsehe, “Maroc Telecom to Acquire ’s West African London Stock Exchange Group, “London Stock Exchange Group Signs Business for $650 Million,” Forbes Partnership Agreement with Casablanca Stock Exchange,” June 17, 2014, london-stock-exchange-group-signs-partnership-agreement-casablanca- , May 7, 2014, http://www.forbes.com/ http://www.lseg.com/resources/media-centre/press-releases/ . stock-exchange. sites/mfonobongnsehe/2014/05/07/maroc-telecom-to-acquire-etisalats- 16 21 The Global Financial Centres Index, vol. 15, west-african-business-for-650-million/ Bloomberg Souhail Karam, “Morocco’s OCP Raises $1.55 Billion in Debut Sale of Bonds,” Mark Yeandle and Nick Danev, morocco-s-ocp-raises-1-55-billion-in-debut-sale-of-bonds.html. . , April 16, 2014, http://www.bloomberg.com/news/2014-04-16/ March 2014, p. 6, http://www.longfinance.net/images/ GFCI15_15March2014.pdf

4 ATLANTIC COUNCIL One of the Bank of Africa’s fourteen branches in Bamako, Mali. commercial success, are an increasingly vital conduit for both Moroccan and foreign institutional investors, a continent where lack of access to the formal banking has likewise played an important role facilitating sector remains a major impediment to economic partnerships between the private sector in Morocco growth. In the late 1980s, the Banque Marocaine du itsand origins other countriesas a conglomerate and African running companies. its various Since its Mali.Commerce In 2010, Extérieur BMCE acquired (BMCE) helpeda majority to revamp stake in the the subsidiaries,reorganization shifting in 2010, instead SNI has to functionmoved away more from as an Bankmoribund of Africa state-owned Group, which Banque has de operations Développment in seventeen du investment fund incubating and developing companies African countries and has ambitious expansion plans in a number of sectors, including banking, mining, for another thirteen. BMCE explicitly embraces African construction, agriculture, tourism, and renewable development as one of its core responsibilities, declaring energy. in its corporate identity statement that “the best way to support development in Africa is for us to bring Overall, seventy-seven Moroccan enterprises are listed business to the continent thus directly contributing to people’s livelihoods through creation and improved African companies compiled by the magazine Jeune infrastructure.”22 is Morocco’s largest Afriquein the 2014 edition of the annual list of “Top 500” private bank and sixth-largest in Africa in terms of Four Moroccan companies—OCP, Maroc Telecom, the deposits, has also aggressively expanded its presence from a review of data for over 10,000 firms. more exclusive “Top 20” list for the continent. In total, giant oil-refining SAMIR Group, and SNI—made the even into eight countries in sub-Saharan Africa, where it the business transacted in Africa.23 hascurrently announced boasts plans 367 branches,to cover all as the well countries as into of the and Moroccan companies accounted for nearly 9 percent of Tunisia, where it has 190 branches. Moreover, the bank A Natural Cultural Fit and North Africa. Perched on the northwest corner of Africa and blessed Economic Community of West African States (ECOWAS) with coastlines on both the and the private holding company whose shareholders include suited to serve as a portal to Africa. Due to its proximity The Société Nationale d’Investissement (SNI), the , Morocco is geographically well-

22 23 Jeune Afrique . BMCE Bank International, Statement of Social Responsibility, http://www. “Les 500 premières entreprises africaines,” , special issue 37, bmce-intl.co.uk/about/corporate-identity/social-responsibility.html April 2014.

ATLANTIC COUNCIL 5 Students at in , Morocco. The kingdom gives out more than ten thousand grants annually to African students from some thirty-five countries for study at Moroccan , many in highly sought-after fields. also play a progressive role in cultivating human ,to , a theunique Middle legacy East, that and enables sub-Saharan it to have Africa, a foot in capitalsought-after across technical Africa through fields. Moroccanboth extensive companies in-house allMoroccan three . society today is also a confluence of those training programs for employees of their enterprises, the overwhelming majority of whom come from the Morocco embraces its diverse heritage and uses it to communities where they operate on the continent, as enhance its standing throughout Africa and beyond. Its well as outreach initiatives. OCP Entrepreneurship, constitution explicitly acknowledges that Morocco’s for example, a signature undertaking of the national unity is “forged by the convergence of its Arab- company, seeks to stimulate economic development and job creation by targeting small businesses and local entrepreneurs by engaging them in Islamic, Berber and Saharan-Hassanic It is a member components, of the entrepreneurial development (including information, nourished by its African, Andalusian,24 Hebrew, and communityMediterranean whose influences.” founding was rooted in member assistance with marketing and contracting, and countries’Arab Maghreb shared Union Arab (UMA), and Berber a regional economic and language, advocacytechnical assistance,for start-ups. and In training), another case, access Attijariwafa, to capital, Muslim religion, and experience of French . in its African branches outside of Morocco, has adopted over the latter country’s support of separatists in awhich formal employs policy ofmore skills than transfer five thousand and cultivating professionals local Longstanding tensions between Morocco and personnel; to this end, the bank employs more than 1,200 interns each year, who form an important forWestern Morocco’s Sahara history caused and the culture union to servebe “frozen” as a bridge since to pipeline for future hires, and has deployed barely four its1994, neighbors. but its existence is itself evidence of the potential dozen Moroccan and other expatriates to its operations in Africa. Morocco also plays an important role in providing International donors have come to recognize the value a grant program for African students was launched of “triangulating” their capacity-building efforts for whicheducation today for awards the wider over region. ten thousand Under the grants present annually king,

for study at Moroccan universities, many in highly Africa with Morocco. Since 2001, for example, the to African students from some thirty-five countries International Cooperation Agency (JICA) has partnered Preamble of the Moroccan Constitution, op.cit. with Morocco’s National Office for Electricity and

24 Drinkable Water (ONEE) to deliver a three-year joint

6 ATLANTIC COUNCIL program of training in the latter’s facilities in Morocco for technical personnel for water and sanitation Airports in North America. Trudeau and New York’s John F. Kennedy International Growing Integration into the World studentsoperations at fromthe end a number of last year,of sub-Saharan the initiative’s African alumni Economy nowcountries. include With managers the graduation and engineers of the fifthfrom class Benin, of The largest automobile factory in Africa sits in a Burkina Faso, , Cameroon, Verde, the of . Inaugurated in 2012, the three hundred- Central African Republic, , , the Republic of the Congo, the Democratic Republic of the Congo, vehicles a year and employs more than 5,000 workers. Côte d’Ivoire, , Gabon, , Mali, Mauritania, Thehectare plant plant is the is expectedresult of a to collaboration produce up tobetween 340,000 French 25

SkillfulNiger, , Economic and Togo. Diplomacy Morocco.carmaker Renault and the Caisse de Dépôt et de Gestion (CDG), the institution that manages long-term savings in economic power to enhance his country’s outreach. In King Mohammed VI has harnessed Morocco’s growing Africa’s least-developed countries, and the eradication of INTERNATIONAL customs2000, the duties King announcedon products a importeddebt forgiveness from these plan states. for And Morocco has made a point of taking a leading role DONORS HAVE in African and economic forums—it has in the last decade served as chair of the Africa Group COME TO RECOGNIZE thatin the constitutes World Trade the Organization largest caucus (WTO) for economic and president interestsof the “Group and enhancedof 77,” the negotiating coalition of capacitydeveloping within nations the THE VALUE OF 26

UnitedIn any discussion Nations. of Morocco’s economic diplomacy, “TRIANGULATING” not to be overlooked is the important role that the THEIR CAPACITY- connecting not just the kingdom to its African neighbors, butcountry’s African flagship countries air carrier,to each Royalother asAir well Maroc, as to plays Europe in BUILDING EFFORTS and North America. Currently, the serves twenty- nine African destinations outside Morocco thirty-three FOR AFRICA WITH European cities, as well as Montreal’s Pierre-Elliott27 28 MOROCCO. 25 L’Economiste, December 25, “L’ONEE met son expertise à la disposition des cadres africains: un travail 2013, Active in both fund management and mobilization of réalisée avec la coopération japonaise (JICA),” expertise-la-disposition-des-cadres-africains. http://www.leconomiste.com/article/914424-l-onee-met-son- capital for development and currently headed by Anass 26 The Group’s name derives from the number of members at its founding.

. Currently, it actually has 133 states on its official list of members; see pushHouir to Alami, integrate an alumnus more deeply of New into York the University’s world economy, Stern http://www.g77.org/doc/members.html andSchool has of developed Business, aCDG number is a major of industrial player in parks Morocco’s inside 27 Algeria (), (), Benin (Cotonou), Cameroon (Douala, Yaoundé), (), Central African Republic (), Republic free trade zones laden with incentives for investors, of the Congo (Brazzaville), Democratic Republic of the Congo (, including tax and customs breaks. In addition to landing Pointe-Noire), Côte d’Ivoire (Abidjan), (), Renault, Morocco’s industrial parks have enticed (), Gabon (), (), Ghana (), Guinea (), Guinea- (Bissau), (), Libya (), Mali (Bamako), Mauritania (), Niger (), Senegal (), high-tech firms such as Hewlett-Packard and aviation (), Togo (Lomé), and Tunisia (). An additional shop in the kingdom to better serve the growing African new route to Chad (N’Djamena) was announced in May 2014. market.companies like Boeing and France’s Safran to set up 28 (), Denmark (), France (, Lyon, , Nantes, Nice, , Strasbourg, Toulouse), (Berlin, , Munich), (Bologna, , Rome, ), the not been slow to notice the potential for a Moroccan (Amsterdam), (Lisbon), (Moscow), (, bridgeChina, Africa’sto the continent largest trading in addition partner to its since own 2009, direct has , Bilboa, , , Málaga, Tenerife, ), (), (Geneva, Zurich), (Istanbul), and the (London).

ATLANTIC COUNCIL 7 Africa’sforays. largest To cite wind just farm, one Dhar example, Saadane, morenear , than 250Morocco, major was inauguratedpreferential in June 2010. and free-trade accords with the West 30 the Economic and Monetary Community of Central African byChinese the BMCE and in firms collaboration attended a with China-Africa the China African Economic31 and Monetarythe Economic Union Community (UEMOA), AfricaInvestors Joint Meeting Chamber organized of Commerce in Rabat and in Industry. June 2014 In his 32 Morocco has opening address to the conference, BMCE’s chairman, alsoStates organized (CEMAC), an ambitious series of international Othman Benjelloun, heralded the fact that “the Africa forumsof West withAfrican the States goal of (ECOWAS). creating a broader “Atlantic of today is a land of development, investment, growth, Community” linking the African states on the and dynamism” that ought to be approached “without ocean’s littoral with their European and American condescension or any sense of superiority.” counterparts. 29 In addition to its free trade agreement with the

economy via a number of other trade pacts, including a 30 longstandingUnited States, association Morocco is agreementintegrated intowith the the world European UEMOA is a customs and currency union established in 1994 between seven francophone members of ECOWAS—Benin, Burkina Faso, Côte d’Ivoire, Mali, Niger, Senegal, and Togo—that were joined by lusophone Guinea- collective economic competitiveness through open markets and Bissau in 1997. The organization’s objective is to increase its members’ Union, which was upgraded within the European harmonization of the legal environment. The members use the West Africa MediterraneanNeighborhood Policyregion to to “advanced achieve the status” distinction in 2008, 31 andmaking opening Morocco the waythe firstto higher country levels in the of political southern CFA (XOF) as their currency. CEMAC is a customs and currency union established in 1994 and cooperation. In addition to opening up opportunities Africa—Cameroon, the Central African Republic, Chad, the Republic of the for expanded commerce and other links with America implemented in 1999 between four francophone countries in Central and Europe, the country has also moved to conclude Congo, and Gabon—which, along with their Spanish-speaking neighbor common currency. Equatorial Guinea, use the Central African CFA franc (XAF) as their 32 “BMCE Bank lance le nouveau ‘triangle d’or’, Afrique, Maroc, Chine,” La are Benin, Burkina Faso, Cape Verde, Côte d’Ivoire, The Gambia, Ghana, The members of ECOWAS (known in its francophone members as CEDEAO) Tribune Nouvelle 29 . and Togo. , June 27, 2014, http://www.lnt.ma/actualites/bmce-bank- Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, lance-le-nouveau-triangle-dor-afrique-maroc-chine-105849.html

8 ATLANTIC COUNCIL Implications for US Policy governments to postpone needed economic and American businesses have overestimated the costs and political reforms. Government over-reliance on risks associated with African corruption and lack of natural resources also renders African nations overly infrastructure, and are consequently reluctant to enter the African market space, despite Africa’s blossoming consumer base, attractive worker demographics, and vulnerable to resource price fluctuations in the global abundant natural resources. diversify—particularlymarket. The United States by modernizingshould use its agriculture. political influence to assist resource-rich African nations to Even as China, , India, Japan, and other more enterprising nations have competed for market share on the continent, Washington has done little to GIVEN ITS UNIQUE encourage American businesses to take a closer look at HERITAGE, funded Chinese competitors. But Africa is poised to becomeAfrica or one to position of the world’s US firms largest to compete consumer with markets, better- MOROCCO IS WELL- SUITED TO SERVE theso the long inability term. of American firms to operate there poses serious challenges to US competitiveness over Moroccans and other Africans are bewildered by AS A BRIDGE Washington’s apparent willingness to cede market share in Africa. All are concerned that Washington’s FOR AMERICAN comparative neglect of African economic development may help condemn the continent to continued COMMERCIAL insecurity and rising religious extremism if economic needs of the rapidly growing populations are not DIPLOMACY INTO addressed.33 AFRICA. outstanding bilateral and preferential trade and investmentFirst, Washington should currently push being to finalize negotiated any with African countries, and should consider expanding and encourage American companies though its overseas constructing new pacts with suitable partners. These In addition, the United States should more robustly treaties can be powerful drivers of growth. At the large-scale projects such as Power Africa and the same time, Washington needs also to ensure that the expansionfinancing and of ports insurance and logistics agencies networks to participate to provide in sorely needed infrastructure linkages within and among African markets. If the coming decade is to witness potential benefits of trade agreements are not undercut Otherby nontariff simple barriers measures—ranging on the US or fromAfrican improving side, such as distorting financial, labor, or logistics regulations. the accessibility of existing consumer data to better privatethe broadening and public of economicsector channels benefits to toplay the a peopleprominent of marketing of investor opportunities—could help roleAfrica, in thatthe United effort. StatesMorocco should is a bridge utilize andits vast enabler array of persuade American businesses to get off the fence and start competing for African business. development in Africa. 34 for maximizing US resources committed to economic Washington should also exert more pressure on its African allies to commit to market and regulatory contribution to Africa’s growth by promoting public- reforms. Africa’s abundant resources can be an privateThe US governmentsector cooperation can make in which another American important economic boon, but the overwhelming attraction of extractive industries has too-frequently allowed develop the enormous potential of Africa as a food companies, working with US government agencies, 33 should be directed toward sustainable efforts with local National Interest source for itself and globally. US foreign assistance Ahmed Charai, “Transatlantic Trade and Security: A View from Morocco,” and national African companies, nongovernmental . , April 30, 2014, http://nationalinterest.org/feature/ transatlantic-trade-security-view-morocco-10324 technical expertise and technology can be applied in 34 Aubrey Hruby, “Investment and Ingenuity: Overcoming Obstacles to Doing keyorganizations, sectors. These and effortsother agencies, should include in which seed US and Business in Sub-Saharan Africa,” Atlantic Council Issue in Focus, August investment-and-ingenuity. 2014, http://www.atlanticcouncil.org/publications/issue-briefs/

ATLANTIC COUNCIL 9 feed strategies for better crop and herd cultivation, Morocco’s economic reforms have had positive effects sustainable fertilizer usage, water management, that underscore the country’s commitment to linking agribusiness development, marketing and distribution human and economic development. Its political for local, national, and international customers, and the reforms, while still progressing, indicate a similarly introduction of waste, solutions, and strong commitment to democracy, good governance, remediation strategies to holistically shape favorable and the rule of law.36 outcomes for this critical sector. with Morocco to speed and deepen the reform process The United States should partner

in Morocco, while also benefiting from the country’s IT IS IN THE UNITED withcompelling the African advantages continent. that position it to help the United States and its businesses expand their own engagement STATES’ STRATEGIC The authors are grateful to the Africa Center’s deputy director, Bronwyn Bruton; assistant director, Joshua INTERESTS TO FURTHER Meservey; and visiting fellow, Aubrey Hruby, for their contributions to this paper as well as to Atlantic Council DEEPEN ECONOMIC Board Director Moulay Ahmed Charai for his support, AND COMMERCIAL insights, and encouragement. 36 J. Peter Pham, “Morocco’s Momentum,” Journal of International Security COOPERATION Affairs 22, spring 2012, pp. 13-20. AND CULTIVATE STRONGER POLITICAL AND SECURITY PARTNERSHIPS WITH MOROCCO.

on a critical continent. And it is in the Morocco is a long-standing US ally and a burgeoning economic and commercial cooperation and cultivate strongerUnited States’ political strategic and security interests partnerships to further deepen with Morocco. Given its unique socio-cultural heritage, Morocco also operates comfortably in the Arab,

exclusively, Francophone— African contexts, and its extensiveEuropean, cultural and sub-Saharan—particularly, and commercial relationships but not with those regions makes it well-suited to serve as a bridge

Mohammed VI, throughout his tours of Africa and in recentfor American addresses commercial to international diplomacy forums into onAfrica. Africa’s King economic development has articulated a clear and reasoned rationale for his commitment to Africa’s growth—calling for example for triangular aid projects to build sustainable programs utilizing regional talents and resources.35

35 North Africa Post “Morocco Highlights Role of South-South Cooperation in Promoting Stability, Progress in Africa,” , June 23, 2014, ht t p:// cooperation-in-promoting-stability-progress-in-africa.html. northafricapost.com/5675-morocco-highlights-role-of-south-south-

10 ATLANTIC COUNCIL Atlantic Council Board of Directors

CHAIRMAN Gregory R. Dahlberg William E. Mayer Maciej Witucki *Paula J. Dobriansky CHAIRMAN, Christopher J. Dodd Franklin C. Miller *Jon M. Huntsman, Jr. Eric D.K. Melby Mary C. Yates INTERNATIONAL Conrado Dornier James N. Miller HONORARY Dov S. Zakheim ADVISORY BOARD Patrick J. Durkin *Judith A. Miller DIRECTORS Thomas J. Edelman *Alexander V. Mirtchev David C. Acheson Thomas J. Egan, Jr. PRESIDENT AND CEO Brent Scowcroft *George E. Moose James A. Baker, III Thomas R. Eldridge GeorgetteObie L. Moore Mosbacher Madeleine K. Albright VICE CHAIRS Julie*Stuart Finley E. Eizenstat Bruce Mosler *Frederick Kempe Frank C. Carlucci, III *Robert J. Abernethy Thomas R. Nides RobertHarold M.Brown Gates *Richard Edelman Franco Nuschese Michael G. Mullen *C. Boyden Gray Lawrence P. Fisher, II Alan H. Fleischmann *Ronald M. Freeman William J. Perry *Virginia A. Mulberger Michèle Flournoy AhmetSean O’Keefe Oren Leon E. Panetta Hilda Ochoa-Brillembourg *W.*Richard DeVier L. PiersonLawson Ana Palacio Condoleezza Rice *Robert S. Gelbard Thomas R. Pickering Colin L. Powell *Sherri W. Goodman *Andrew Prozes TREASURER *Stephen J. Hadley *John Studzinski JohnEdward W. WarnerL. Rowny Mikael Hagström George P. Shultz SECRETARY Ian Hague JosephArnold W.L. PunaroRalston *Brian C. McK. Henderson LIFETIME DIRECTORS John D. Harris II TeresaKirk A. M.Radke Ressel William H. Webster Frank Haun Carol C. Adelman DIRECTORS Jeffrey A. Rosen *Walter B. Slocombe Rita E. Hauser Charles O. Rossotti Daniel J. Callahan, III Odeh Aburdene Michael V. Hayden BrianLucy Wilson Dailey Benson PeterStephane Ackerman Abrial Annette Heuser Robert Rowland Timothy D. Adams Marten H.A. van Heuven Stanley O. Roth Jonas Hjelm John Allen Kenneth W. Dam *Michael Ansari Karl Hopkins Harry Sachinis Robert Hormats William O. Schmieder ChasLacey W. Neuhaus Freeman Dorn CarltonStanley EbnerW. Fulford, Jr. *Adrienne Arsht Wolfgang*Mary L. Howell Ischinger John P. Schmitz Richard L. Armitage ReubenRobert E. Jeffery, Hunter III Anne-Marie Slaughter Edmund P. Giambastiani, Jr. John A. Gordon Elizabeth F. Bagley Robert Jeffrey Alan J. Spence David D. Aufhauser John M. Spratt, Jr. George A. Joulwan James Stavridis Franklin Barbara Hackman Sheila Bair *James L. Jones, Jr. Richard J.A. Steele *Rafic Bizri James B. Steinberg Julia Chang Bloch Robert L. Hutchings Francis*Thomas Bouchard L. Blair Stephen R. Kappes *Paula Stern JamesRoger KirkP. Mccarthy Myron Brilliant Maria Pica Karp PeterRobert J. J.Tanous Stevens JackGeraldine N. Merritt S. Kunstadter *R. Nicholas Burns Francis J. Kelly, Jr. *EllenJohn S. O. Tanner Tauscher Philip A. Odeen *Richard R. Burt Zalmay M. Khalilzad Michael Calvey Robert M. Kimmitt Clyde C. Tuggle Henry A. Kissinger PaulKaren Twomey Tramontano Ashton B. Carter William Y. Smith James E. Cartwright Peter Kovarcik Melanne Verveer RonaldMarjorie P. ScardinoVerdicchio Ahmed Charai Franklin D. Kramer Enzo Viscusi Philip Lader Charles F. Wald CarlWilliam E. Vuono H. Taft, IV Togo D. West, Jr. John Craddock Henrik Liljegren Jay Walker R. James Woolsey DavidWesley W. K. Craig Clark *Jan M. Lodal Michael F. Walsh *John*George D. MacomberLund Mark R. Warner Tom Craren *Members of the Executive *Ralph D. Crosby, Jr. IzzatJane HollMajeed Lute J. Robinson West Committee ^ International Advisory Board Nelson Cunningham Wendy W. Makins John C. Whitehead Members Mian M. Mansha David A. Wilson

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