Morocco embraces Change despite Challenges

written by: Laaroussi Abdelghafour

Moroccan Kingdom has joined and contributed to global value chains. Public infrastructure spending propelled Morocco robust economic expansion starting from the early 2000s. “The highway network, previously very limited, was expanded to 1,800 kilometers and is projected to grow to 3,000 kilometers by 2030”. Rabat responded to these issues by implementing an export-oriented industrial strategy which resulted in the 2014–2020 Industrial Acceleration Plan. Moroccan Kingdom has started to benefit from its fresh infrastructure particularly Tanger Med to help the country integrate into technology-intensive global value chains especially in the automotive and aerospace sectors.

The new approach was based on concepts from Harvard Growth Lab. Adopting an innovative strategy, Moroccan government created Tanger Med Zones, a collection of logistics and industrial hubs close to the port, making the region of Africa a top industrial free zone. Due to significant investments made in Tangier by French automakers PSA Group and Renault, Morocco has surpassed South Africa as the continent top automaker and exporter. Major auto spare parts manufacturers are now based in the kingdom, including The Japanese firm, Yazaki and other car makers market leaders. This tactic of offering incentives to auto-industry and automobile component manufacturers to relocate some of their operations to the Kingdom, has brought in a sizable amount of foreign direct investment.

Overall, between 2010 and 2019 the manufacturing sectors share of foreign direct investments increased from 15 to 37 percent mostly due to improvements in the automotive sector. By doing this, Morocco has been able to buck the trend of early deindustrialization and keep manufacturing share of the country GDP at about 15%. Though the proportion of medium-tech products in the country manufacturing exports is now much higher than that of regional rivals such as Tunisia and Egypt.

The proportion of high-tech exports is still far lower than that of Asian industrial superpowers like China and Vietnam. Furthermore, a stark economic divide has been exacerbated by the emphasis on FDIs as domestically focused small and medium-sized businesses find it difficult to compete in industrial ecosystems where foreign companies with high standards of quality predominate.

To follow………………

Reference:

Alexandre Kateb, September 20, 2024, “Morocco’s Long Road Toward Economic Transformation”. Available at: https://carnegieendowment.org/research/2024/09/moroccos-long-road-toward-economic-transformation?lang=en (Accessed: 5 February 2025).