Morocco’s industrial ambitions received a boost in January 2009 when King Mohammed VI launched the construction of Tanger-Med industrial park. Already the site of a significant port project, the new venture will boost output and increase exports to Europe. With strong trade ties to a diverse group of nations, including free trade agreements (FTAs) with the United States (US) and Europe, Morocco hopes to ride out the current recession by building infrastructure to support renewed trade levels in the future and by relying on consistent revenue streams, such as phosphates and derivatives.
When complete in 2012, Tanger-Med will be among Africa’s largest ports, with a container handling capacity of 8.5 million, twenty-foot equivalent units (TEUs). The port, just 14 kilometers from the Spanish coast, will greatly increase Morocco’s profile as an industrial destination and serve as a logistics center for the whole Mediterranean.
The purchase of 30 square kilometers of public land by the Tangiers Mediterranean Special Agency (TMSA) will bolster the free trade zones that have sprung up near the port facility. A second agreement schedules the development of a 50 square kilometer offshore zone near Tetuan. The zones that were established in 2002 have proved successful. The Tangier Free Zone is home to some 400 businesses and 40,000 jobs, while the Melloussa Free Zone, where the Renault-Nissan alliance plans to develop an automobile industrial complex by 2010, is attracting private investment worth $1.9 billion and generating 36,000 jobs.
France has been a strong supporter of Moroccan industry and is its largest trading partner, accounting for 17.8 percent of trade. In addition to successfully advocating for Morocco to be awarded “advanced status” for European Union trading, France signed several bilateral accords that will provide infrastructure financing.
A new tram system will be constructed in Rabat, financed by a $260 million loan from France. The task of developing and implementing the new light rail network has been assigned to France-based engineering firm Alstom and the French infrastructure group Colas. France has also approved $125 million in grants to study the feasibility of a high-speed rail link between the port of Tangiers and Casablanca.
Foreign investment
While a large portion of Morocco’s foreign direct investment comes from France — much of it invested in infrastructure — North African and Asian countries are playing an increasingly important role in the industrial sector. Industry contributes 25 to 35 percent of gross domestic product (GDP), depending on agricultural performance, and investors have found a number of opportunities, particularly in fertilizer and phosphates production.
Sales of phosphates and derivates reached $6.4 billion in 2008, an increase of more than 50 percent from $2.7 billion in 2007. The segment accounts for 33.4 percent of all exports.
As prices have increased for phosphates and derivatives on the international market, foreign companies have expressed interest in Morocco’s holdings. In May 2008, Moroccan state-owned phosphate company Office Cherifien des Phosphates (OCP) signed a billion dollar deal with Libya Africa Investment Portfolio (LAIP) for the construction of three phosphate derivative plants. One is to be built in Libya, another in the phosphate-rich Jorf Lafsar region of Morocco. The third — a fertilizer plant — will be located in one of the two countries after negotiations are complete.
Just days before the LAIP deal, OCP signed a half billion dollar agreement with Hanoi-based PetroVietnam Fertiliser and Chemical Joint Stock Company to build a diammonium phosphate (DAP) fertilizer plant, expected to open in 2011, with an output of between 660,000 and one million tons. Despite volatile prices, global demand is high and chemicals will continue to be a major revenue earner.
Morocco’s expanding list of investors and trade partners should help foster broader market access for its industrial exports. In addition to the agreement with the EU, Morocco has forged other partnerships, such as the 2004 Agadir Agreement and the 2006 US FTA. The agreements have only recently gone into effect and their benefits will remain elusive until the financial situation stabilizes. While Morocco will feel the effects of the global financial crisis, with GDP expected to grow 5.7 percent in 2009, down from 6.5 percent the previous year, the rate is impressive given that Morocco’s major export markets in Western Europe have been hit hard by the downturn.
