As manager of CaixaBank’s international banking office, I have been living in North Africa for five years now. Over the last two years, I have been in charge of managing the organisation’s operations branch in Morocco, with three branches: Casablanca, Tangier and Agadir. Throughout my time here, I have discovered first-hand the economic and social situation of an emerging region on the international stage, which is becoming increasingly relevant and attractive in all senses.
In Morocco specifically, I have come across a people with a deep bond to their traditions and strong families ties but also generous, welcoming and completely open to people from other cultures. There has been progress regarding the economic situation, though I believe that the best is yet to come thanks to two trump cards that it still has up its sleeve: a clear development strategy and a very young population. Of the 35 million Moroccans currently living there, 53% are below the age of 24. With the right focus on education, Morocco has what it takes to become a great country.
From an economic standpoint, there are three areas, separated in terms of their production activity, among other factors. In the North, the city of Tangier is the great hub of commercial attraction, with the Tanger-Med port and most of the textile factories in this area. In the centre of the country, Casablanca, Rabat and Kenitra have the main concentration of the aeronautical industry, the automotive sector and branches of large international companies. In the South, Agadir attracts a large part of the fishing and agricultural sectors. This last sector plays a crucial role in the Moroccan economy since it accounts for 15% of its GDP and employs around 40% of the total workforce, making up 20% of Moroccan export values.
Data confirms that Spain is Morocco’s main trading partner. There is a trade flow with a volume of approximately €13 billion. 35.1% of the exports from the European Union to Morocco are made by Spanish companies, compared to 18.4% for French companies and 10.5% for German ones. The country has 19,000 Spanish export-import businesses, 5,000 of which have been regularly operating in the last four years. Morocco is therefore the reason behind huge success for Spanish companies in terms of international trade.
However, investment is an outstanding issue. While most of the companies on the French CAC 40 index have created specific branches for their operations on the Moroccan market, a mere 3 companies on the Spanish IBEX 35 have a similar presence there. This has its grounding in political and historical matters, as well as the poor results from some recent projects that were intended as a way out from the Spanish property bubble. However, the situation has now changed: the rate of growth in Morocco, with 4% rise in GDP over the last years and the excellent political relationships that the country is making are turning it into a very interesting place for investment.
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This is the perfect time for big Spanish businesses to start taking part in Morocco’s economic development and playing a definitive role in projects in important sectors such as infrastructure, renewable energy, the food and agriculture industry or civil engineering. In turn, these corporations will help to streamline the flow of business towards service-provider SMEs. To use a recent example, the Spanish companies Acciona, Sener and Tsk built one of the largest solar thermal plants in the world on Moroccan soil and in the process they have worked with a large number of Spanish SMEs.
However, there is another reason why Spanish companies should take their neighbouring country into consideration when planning their investments: Morocco is currently a very promising market and is setting itself up as the port of entry to the rest of Africa. Casablanca has become a huge financial hub and the city is full of business executives from the entire continent, especially from the Sub-Saharan region.
Furthermore, Morocco has recently re-joined the African Union and has requested membership to the ECOWAS (Economic Community of West African States). When these treaties come into effect, the country (and also the Spanish companies that have subsidiaries there) will be able to start trading freely with these states.
We could speak of places such as the Ivory Coast, with GDP growth at yearly rate of around 8% or Senegal with yearly growth rate of between 6% and 7%. The wide range of opportunities includes infrastructure (where many projects have support from multilateral bodies such as the World Bank, the African Development Bank or the European Union), construction, renewable energies, fishing, agriculture and the trade of machinery and consumer goods.
Clearly, anyone who wants to set off on this adventure needs to be well advised. We cannot speak of Africa as a single market but rather as a widely diverse set of countries with interesting perspectives, but also with inequality in their situations. Clear ideas and support from a professional team who are specialised in the region are the key to success.
Morocco specifically has realms of knowledge on the Sub-Saharan countries, with which it has been trading for some time now. Investment has recently sky-rocketed in sectors such as banking, insurance, mobile phones and agriculture. However, this doesn’t mean that opportunities are running out for Spanish companies, quite the opposite: our analysis shows that in Morocco we can find the experience and the communications channels necessary to enter new markets with some guarantees.
All in all, Spanish businesses need to start looking towards Morocco and Africa, a continent that is only 14 kilometres from our doorstep, but where almost everything is in the making, an endless list of projects and investment opportunities that can be taken on with the support of good advisors and support from specialists in the region.
