COUNTRY RESULTS BRIEF 2019 MOROCCO © 2019 African Development Bank Group All rights reserved. Published November 2018 African Development Bank Group COUNTRY RESULTS BRIEF 2019 – Morocco The views expressed in this book are those of the authors and do not necessarily reflect the views and policies of the African Development Bank (the Bank), its Board of Governors, its Board of Directors or the governments they represent. The Bank and its Board of Directors do not guarantee the accuracy of the data included in this publication and accept no responsibility for any consequence of their use. By making any designation of or reference to a particular territory or geographic area, or by using the term “country” in this document, The Bank does not intend to make any judgments as to the legal or other status of any territory or area. The Bank encourages printing or copying information exclusively for personal and non-commercial use with proper acknowledgment of AfDB. 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African Development Bank Group Avenue Jean-Paul II 01 BP 1387 Abidjan 01, Côte d’Ivoire CONTENTS THE FIRST CLIENT OF THE AFRICAN DEVELOPMENT BANK 1 CROSS-CUTTING AND STRATEGIC AREAS 4 LIGHT UP AND POWER MORROCO 9 Coming out of energy dependence 9 Executive summary 1 Becoming a pioneer in the development of clean energies 10 Partnering to reach middle-income status by 2025 3 An innovative partnership 11 Looking forward 12 Light up and power Tanzania 7 DEVELOPINGBringing Amodern SUSTAINABLE energy services AGRICULTURE 157 The Bank’s contribution to enhancing access to energy 7 Agriculture remains a strategic sector for the Moroccan economy 15 The Bank, a key player in Moroccan agricultural policy 16 Feed Tanzania 11 Looking forward 17 Delivering a food-secure Tanzania 11 INDUSTRIALISEThe Bank’s involvementMOROCCO in strengthening agricultural value chains 1219 Accelerating economic transformation through industrialisation 19 Industrialise Tanzania 15 The Bank’s contribution to industrial acceleration 19 ProgressThe Bank, in abringing major partner industries in improving to Tanzania access to finance 1521 TheThe Bank’s Bank, asupport key player for fostering in building industrial infrastructure development in Morocco 1621 Looking forward 21 Integrate Tanzania 19 INTEGRATEBringing MOROCCO about regional economic integration 2519 TheStrengthening Bank’s catalytic ties withrole sub-Saharanin developing Africa regional infrastructure 1925 Significant support to facilitate trade 26 Improve theReducing quality rural isolationof life for the people of Tanzania 2327 DeliveringDoubling airjobs traffic and essential services 2327 TheA second Bank’s internationalimpact on people’s port on lives the Mediterranean Sea 2428 Looking forward 28 The Bank’s effectiveness in managing its operations in Tanzania 27 IMPROVE THE QUALITY OF LIFE 31 Portfolio performance and speed of delivery 27 OperationsMore efforts quality are neededand effectiveness to strengthen social inclusion 2831 KnowledgeMorocco’s employmentmanagement challenge 2931 MovingTaking closeraction toto ourimprove client education system governance and raise 29 its training level 31 Making near universal access to drinking water a priority 32 Conclusion 31 The Bank, a key player in job creation 32 The Bank’s actions for an education for all 32 The Bank, a key player in improved access to water and sanitation 32 The Bank, a committed player for the promotion of the population's health 33 Looking forward 36 THE BANK’S EFFICIENCY IN MANAGING ITS OPERATIONS IN MOROCCO 39 The Bank’s portfolio distribution in Morocco 40 The Bank’s Portfolio performance 40 Quality-at-entry 41 Collaborating with other development partners 42 Collaborating with the Government 43 COUNTRY RESULTS BRIEF 2019 – Morocco 1 THE FIRST CLIENT OF THE AFRICAN DEVELOPMENT BANK he African Development Bank (the Bank) and Morocco have been partners for more than 45 years. The first project funded by the Bank in the Kingdom was a water supply Tand sanitation support project, approved in March 1970. Since then, the Bank has financed nearly 170 operations worth more than USUS$10 billion, particularly in the areas of infrastructure, economic and financial governance as well as agricultural development. At the end of March 2019, the Bank’s active portfolio in Morocco consisted of 34 operations totaling approximately USUS$3 billion in commitment concentrated in the energy and transport sectors (51% of commitments). Morocco is today the African Development Bank’s largest active portfolio. The Bank is currently implementing its new CHART 1 THE AFRICAN DEVELOPMENT country strategy which covers the period BANK’S KEY ACHIEVEMENTS 2017–2021. It focuses on two pillars, namely: IN MOROCCO IN 5 FIGURES, 1) supporting green industrialisation by SMEs 2009–2018 and exporting sectors; and 2) improving the population's living conditions through 6.9 Million people with new or improved employment for youth, women and in rural connection to the electricity grid areas. Through this program, the Bank intends to boost industrial development, facilitate 88 000 hectares agricultural land with an enabling business climate and Foreign improved water management system Direct Investment (FDI) in the country. The strategy also responds to the priorities set 16 Million people with new or improved by the Moroccan authorities, which include access to transport accelerating the economy’s industrialisation process, and improving the living conditions 3.5 billion people with new or improved of Moroccans by facilitating their access to access to water and sanitation employment. To this end, several programs are being implemented to increase companies’ 8.5 Millions people with access to better competitiveness by facilitating access to health services financing, developing infrastructure enabling Morocco to increase trade with its trading partners, and by continuing to support the to Small and medium enterprises (SMEs) in this Kingdom’s ambitious renewable energy sector. program. The Bank also wants to strengthen the access to the labor market for young This summary review presents Morocco’s people and women through the support development progress over the past decade, from program for youth and women employability. 2009 to 2018, and the Bank’s contribution to these Finally, the Bank supports the agricultural results. The report focuses specifically on the sector - the country's first leading job creator Bank’s High 5 priorities: Light up and Power Africa; - through various support programs for Feed Africa ; Industrialise Africa; Integrate Africa; agricultural value chains, irrigation and support and Improve the quality of life for the people of 2 THE FIrst CLIENT OF THE AFRICAN DEVelopmeNT BANK Africa. This report reviews these five priorities support in the cross-cutting and strategic areas. within Morocco’s context, based on a series of The following five chapters examine consecutively indicators extracted from the Bank's Results the High 5, both at the level of Morocco’s progress Measurement Framework1. The introductory and at the Bank's support level. Finally, Chapter chapter provides an overview of Morocco's 6 analyses the effectiveness with which the Bank economic situation and focuses on the Bank's manages its operations in Morocco. n 1 https://www.afdb.org/fileadmin/uploads/afdb/Documents/Policy-Documents/Final_-_RMF_-__Rev.2_Final_.pdf 4 CROSS-CUTTING AND STRATEGIC AREAS CROSS-CUTTING AND STRATEGIC AREAS A remarkable growth in the economic account deficit has been reduced by -9.2% in field over the last 10 years 2010 to -3.4% in 2017, and the foreign exchange reserves went from less than 4 months to more Morocco is a middle-income emerging country. than 7 months of imports between 2013 and 2016. In 2018, Morocco ranked 5th in Africa in term of In contrast, budgetary ● revenues of GDP growth Gross Domestic Product (GDP) volume and its declined slightly between 2009 and 2018, from ● GDP per capita amounted to 3,494 dollars, 25.3% to 23.8%, a level well above the average of an increase of 24% since 2009, compared to African middle-income countries. This decline can the growth of only 6% observed in all African be explained in particular by the poor harvests middle-income countries. Morocco's development due to climatic hazards. Agriculture remains strategy has been stable for the past 10 years: a strategic sector for the Moroccan economy. the ● GDP growth, which stood at 4.2% in This also highlights the need to strengthen the 2009, remained at 4.1% in 2017, although it country's industrialisation and the agricultural decelerated to 3.0% in 2018 due to lower rainfall. sector’s resilience. Business climate has significantly improved: the country's stability enables foreign direct In addition, challenges subsist to make investment, and the country has developed growth more resilient and inclusive. The important infrastructures, particularly in rail acceleration of the structural transformation and public transport, port infrastructure, water, of the economy remains dependent on the energy and electricity. In 2019, Morocco rose to continued improvement of the business climate the 3rd place in Africa in the World Bank's Doing (institutional, regulatory and infrastructural Business ranking, after Mauritius and Rwanda. In framework), access to financing and the quality eight years, Morocco has succeeded