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A diagnosis of Morocco’s investment climate by the US State Department, Anthony Blinken’s service, indicated that the country’s ambition is to “develop into a regional commercial and industrial hub, leveraging its strategic geographical location, political stability, and world-class infrastructure to develop into a regional manufacturing and industrial sector”. In a report released last night.
“The Moroccan government has implemented a strategy aimed at encouraging employment, attracting foreign investment, and increasing performance and production, designating renewable energy, automotive, aviation, textiles, pharmaceutical products, outsourcing and agribusiness as priority industries. Morocco’s new investment charter, adopted in December 2022, significantly expands incentives for foreign investment,” the same source welcomed.
According to data released by the State Administration of Foreign Exchange in February 2024, foreign direct investment in 2023 was 10.15 billion dirhams (about 1 billion US dollars), a decrease of 53.3% from the previous year. The US State Department pointed out that “Foreign direct investment in Morocco fell by 6% in 2022 to 2.1 billion US dollars, compared with 2021. 2.2 billion US dollars, lower than the peak of 3.6 billion US dollars reached in 2018.
Recovery to occur in 2024
Some Moroccan media and opposition parties point to poor performance. However, the government prefers to focus on the good results achieved in the first quarter of 2024. The Office of Change noted that net foreign direct investment flows amounted to 5.8 billion dirhams at the end of March 2024, an increase of 56.2% over the 2023 period. The coming months will continue to be dynamic. The US State Department report noted that “by 2024, Morocco had ratified 72 investment treaties and 62 economic agreements for the promotion and protection of investments”.
The improvement was also shared by the international media. French daily Le Monde estimated on May 27“nearly 10 billion euros”, six Chinese listed companies specializing in the production of electric vehicle batteries or their components announced that they will invest in Saudi Arabia. On March 29, the strategic project investment agreement of BTR New Materials Group (China) was signed in Rabat, with an investment of 3 billion dirhams.
This dynamic cannot be avoided from reversing. “An inefficient government bureaucracy, corruption, and slow regulatory reform remain challenges. In addition to these structural issues, the Moroccan government has no investment selection process in key sectors such as telecommunications, critical minerals and rare earths, and renewable energy,” the State Department report states.
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