African Union Facing the Political Reality of Building Regional Entente Versus Real Geo-Political Supranational Interference
Neutrality and Integrity are considered non-existent given the foreign aid received by the African Union making it dependent on external financing can become the lobbyist for foreign interests in African Affairs and Decision-making by the African Unifying Organization
Bits and Bites on the Impact of Foreign Aid on the African Organization:
According to a 2023 Kenyan Wall Street article, the African Union’s (AU) over-reliance on foreign aid to fund 60% of its programs is slowing progress in developing the capacity to deliver Pan-African transformation.
The United States is the world’s largest donor of humanitarian aid to Africa. In 2021, the U.S. Department of State and USAID provided $8.5 billion in aid to 47 countries and 8 regional programs in sub-Saharan Africa.
The U.S. government provides a large share of its aid for Africa through multi-country initiatives. These include:
The U.S. President’s Emergency Plan for AIDS Relief (PEPFAR)
The President’s Malaria Initiative
Feed the Future
Prosper Africa
Power Africa
Ethiopia: In 2022, received the highest amount of net official development assistance (ODA) from official donors in Sub-Saharan Africa, at roughly five billion U.S. dollars
Nigeria: In 2022, was the second largest recipient of ODA in Sub-Saharan Africa
The European Union (EU) also provides a significant amount of aid to Africa, giving around EUR 20 billion a year.
China has provided $160 billion in loans to Africa over the past 20 years, or about $7 billion per year. China has also invested $155 billion in infrastructure projects in sub-Saharan Africa over the past two decades. China continues to be one of the major financiers of infrastructure projects in sub-Saharan Africa, with a total investment of $155 billion over the past two decades. As a result, Beijing has gained enormous influence and contacts with several African nations. China’s aid supports many projects, including: Transportation infrastructure, Energy and minerals, Medicine, Agriculture, Telecommunications. In 2021, China pledged $40 billion during the Forum on China-Africa Cooperation (FOCAC). China also promised additional support to combat COVID-19 and announced a goal to increase its imports from Africa to a total of $300 billion in the next three years. Mar 25, 2023
Top 5 ratios belong to Djibouti (54.3%), Republic of Congo (19.6%), Angola (18%), Mozambique (14%), Zambia (11%). On average, African Borrowing from China constitutes a ratio of 5.3% to GDP of Borrowing Countries. China’s FDI correlates with China’s resource interest in Africa. Twelve resource-rich African countries – South Africa, DR Congo, Zambia, Ethiopia, Angola, Nigeria, Kenya, Zimbabwe, Algeria, Ghana, Tanzania, and Mozambique – housed nearly three-quarters of China’s FDI by stock in 2020, as seen in figure 1. Nov 4, 2022
According to Legal Tools, the Charter of the Organization of African Unity (OAU) states that member states affirm the principle of respect for the sovereignty and territorial integrity of every state. However, the Constitutive Act of the African Union (AU) is more in line with the notion of responsible sovereignty than with the conventional accentuation of state rights. The AU’s Constitutive Act has several goals, including:
Achieving greater unity and solidarity between African countries
Defending the sovereignty, territorial integrity, and independence of its member states
Accelerating the political and socio-economic integration of the continent
Promoting and defending African common positions
Some say that foreign funds can only help African countries that undertake political, economic, and institutional reform. Others say that foreign aid has not been effective in Africa because:
Aid has been looted
Aid has been poorly monitored
Donor agencies knew that aid was being stolen
Corrupt African leaders have embezzled aid
Widespread government corruption has caused donors to withhold money
Aid has increased the risk of civil conflict and unrest
More Bits and Bites on the Negative Effects of Foreign Aid in Africa:
Corruption: Foreign aid can encourage the corruption of governments.
Inefficient governments: Foreign aid can lead to the creation of ineffective, corrupt governments.
Economic policies: Foreign aid can lead to unstable economic policies.
Systemic bias: Aid can do nothing to address the global political economy’s systemic bias toward poor African countries.
Unnecessary Aid can be ineffective in places with good governance, and unnecessary in places with bad governance.
Unproductive continent: The West has used foreign aid to make Africa unproductive and dependent, keeping its grip on the continent.
Foreign aid can be used to finance a variety of activities in Africa, including: Investment projects, Technical assistance, Budget support, and Debt relief.
Obediah Ayton • 3rd+• Director Dhabi Hold Co | Family Office | Capital Raising | •
Top 25 Saudi Arabian Family Offices
Not Just Doing Business But Building Relationship in China
Doing Business in China is not enough, it can work, however, building relationship in China can endure and share values at cultural levels – Knowing China is knowing how to do business and how to overcome hurdles in life,” by Said El Mansour Cherkaoui
In 2010, China became the world’s second largest economy, in the midst of a gradual recovery from the 2008 financial crisis. In 2020, China became feared by the rest of the world.
Doing business in the world’s largest country needs large resources and knowledge as well as skills that need to be tuned with local approaches and mastery.
Presentation on China by Dr. Said El Mansour Cherkaoui on China
Dr. Said El Mansour Cherkaoui have conducted business consulting services in Beijing, Shanghai, Guizhou, Kunming, Hong Kong and Dalian
In China be prepared to accept that the state is defining the trends for the Chinese economy. This is like everywhere else, you will have to deal with the local, regional and provincial authorities to set business operations. The best is to sejourn first in China, in the region where you are planning to develop business relationship. If you are seeking long term relation with Chinese businesses, you have to invest in imersing yourself in the environment where you are going to operate. You cannot just rely on the Lobby of large hotels, that can be your meeting spot but that is only a place that connect you to the Aeroport through a tunnel under the China everyday cultural way of living and under the managerial principles of Chinese decision-makers.
You can still do and conduct business operations through such marginal connection and you will be just acting like what I call “International Lobbyists” all they know about the business environment is the lobbies of these 5 Stars international hotels. From the airport, they jump in a car, direction the Hotel, visit of the facility, meeting inside followed by meeting in the Hallway and the Lobby of the Hotel, bring the Lawyer and the documents to be negotiated, take the car to the Airport, fly home. Happy ending like the Hollywood movie stars. Let’s celebrate the happy outcome.
Forget borders and frontiers and focus on cultural personality
Hiring or not Hiring a Lawyer
You need more than to hire a Lawyer, you need to have a person who can be your representative and who is from the region and can provide you with guidance and insights about how to take care of all the twists and turns that will be considered by you like:
“That is not how we do business in our country”
If you had to ask yourself this question, that means you went too far in your ignorance of the local practices. This is not about how you do business against how they do business. This is about finding a territory that is going to be your space to explore and to extract a process of decisions and reversal of decisions until you will find means and resources that you will be able to use as leverage for your process of negotiation with prejudgment or preconceived references, just making progress and working toward a common goal that is shared by your next partner sitting in front of you and representing a different but contrary ways of developing relationship and instilling a vision that is culturally driven with a person that is only sharing just the notion of profit as the bottom line of this interaction.
Even if you hire a Lawyer from outside China and who is an expert in Chinese Business Laws and Regulations, he will be working with a local and regional one. This is the domino effect for the need to have an individual who is going to take care of day to day process and procedure and be able to handle and respond to them in timely fashion. Chinese regulators does not want a project to stay at the table, they want to know first the content, the objective and the outcome of your project before setting a frame of negotiation or consideration for your project. So be prepare not only to file the document necessary but to have a presentation clear and direct to all what you are trying to achieve through such investment in China and what you except as return from it.
Source: tharawat-magazine
Since the commencement of social and economic structural reforms in the 1970s, the country has undergone an extensive and thorough process of liberalization and gradual integration into the world economy. These reforms paved the way for the emergence and constant inflow of foreign business into China mainly on the coastal cities. China authorities will look with better consideration to investment who are seeking to implement operations and productions in inside provinces and they will grant you better incentives to do such move. It all depends what you are pursuing as goals in China if you present your project as an incremental move to participate in the growth of the Chinese regional economies and in the development of linkages with the internal regions of China, you will receive warmer reception and consideration and you can also directly negotiate with the regional office of the economic cooperation existing in every provincial capita.
The following facts are important to fully understand China and its success:
China’s economy grew 6.7% YoY in 2016, which is the slowest pace of growth in 26 years. Yet, it is still within the government’s target range set for the year;
In 2016, the US economy grew just 1.6% YoY, which is lower than the 2.6% YoY growth in 2015. This is the weakest performance since 2005;
At this moment, the reality is that the Chinese economy is still doing quite well despite while most of the world outside China is doing rather poorly.
Source: chinadailyasia
Before doing business in China
First, a comprehensive research needs to be conducted to detect if they are any restrictions on your business scope and limits on the commercial activities performed by a foreign investors seeking a registered entity in China.
In China as elsewhere, business operations are allowed to function only under special permits and regulations.
The catalogue includes two sub-catalogues – one covers the entire country (“national catalogue”) and a second document covers the central, western, and northeastern regions (“regional catalogue”). Together, the 2020 FI encouraged catalogue identifies industries where foreign direct investment (FDI) will be welcome and treated with favorable policies in China. (You can check out the full catalogue in Chinese here, the full national catalogue in English here, and the full regional catalogue in English here).
The newly released 2020 FI encouraged catalogue contains a total of 1,235 items, increased by 10 percent from 1,108 items in the previous version, with 127 items added (65 new items in the national list and 62 new items in the regional list) and 88 items modified.
The lengthening of the catalogue signifies that more investment fields will favor foreign investors.
Encouraged,
Permitted,
Restricted, and
Prohibited.
The Chinese government is actively seeking foreign investments in the Encouraged Industries. There are usually special tax incentives, lower land costs, and simplified approval procedures for investments in the Encouraged industries such as:
These areas were selected to complete the nomenclature of sectors that were open to foreign investors. Foreign entrepreneurs, who contemplate investing in such sectors as infrastructure, real estate, energy, e-commerce, services, logistics, and/or finance, will benefit from the changes in the Foreign Investment Industries Guidance Catalogue.
To increase the flow of foreign investments and the openness of China economy in certain areas needed to sustain the new level of growth, Restricted Industries have seen the number of their related passing from 79 items to 38.
Construction and operation of grids (Chinese parties as controlling shareholders);
Scheduled or non-scheduled international marine transportation services (limited to equity or cooperative joint ventures);
Accounting and auditing (the chief partner shall hold Chinese citizenship);
Construction and operation of urban subway, light railway, and other track transport;
Aged care institutions;
Operation of performance sites (moved from restricted category to encouraged category);
Air transportation companies (Chinese parties as controlling shareholders, and the shareholding proportion of one foreign investor and its affiliates will not exceed 25%).
For example, there are notable regulatory relaxations with respect to investments in manufacturing industries. In the real estate sector, the government moved land plot development, construction and operation of high-end hotels, office buildings, and international exhibition centers from in the Restricted to Permitted category. Investments in real estate secondary market trading and real estate intermediary and brokerage companies are no longer prohibited either.
At the moment, the Restricted category includes:
Medical institutions;
Education;
Automobile manufacturing.
In the future, the Chinese government will continue to remove barriers for foreign direct investments. Doing business in China will certainly become easier and, therefore, will shift the paradigm in the way foreign countries look at China.
2. Relationships are the key to success for doing business in China
It is important to make acquaintance with businesspeople and government officials in any country where you are planning to do business. Yet, it is crucial, sometimes even critical, for the ultimate success of your business in China.
Despite the reforms, the importance of having close relationships with government bodies hasn’t disappeared. Rapport building is difficult, especially for foreigners in China. The standard way is meeting people at networking events or dinners with potential partners, as well as on conferences, workshops, and other events.
Source: acbca
Said El Mansour Cherkaoui invited in China by the Chinese Government and Received by the Chinese Warm People
In China, the concept of networking works in a different way. Foreigners must know that most of the fruitful introductions in China happen via a trusted person. This tactic will open many doors for your business. It always takes a dedicated amount of time, effort, and energy to build strong and lasting business connections and relationships. In China, that can be especially hard.
In the West, it is not unusual for relationships to be initiated and delineated by legal contracts. This type of connection does not always lead to a strong, ongoing partnership once the contract itself has served its purpose. In China, people are focused on building personal contacts and rapport before entering into a partnership or a transaction. Always take this difference into account during international business negotiations.
Many Chinese and foreign companies in China succeed in business thanks to having guanxi. Develop and nurture close relationships with guanxi – social or business connections based on mutual interest and benefit. If they help you at some point, they will expect that you repay it on the basis of the reciprocity principle.
Said El Mansour Cherkaoui organized and provided service s to the first Chinese Delegation that visit the Bay Area of San Francisco – 1994
Due to the state-controlled economy, it would be highly advantageous for international businesses in China to find, establish, and develop good relationships with government officials. For example, a dinner with a mayor or the head of a local public utility may allow you to negotiate lower utility tariffs for your production plants in provinces.
While building rapport, you will certainly meet lots of people and hear many interesting personal stories. Yet, until the proverbial dust settles, you cannot know what you have actually accomplished. Just tamp down your anxiety and wait patiently for some time. Hopefully, very soon you will learn that you have buddied up with one of them.
3. Understanding Chinese culture is extremely important
If you want to do business in China, do your best to understand the business culture of this country. Then, show your partners your knowledge and appreciation of it in both social and business settings.
China is one of the most diverse countries in the world. It would be useful to have a basic understanding of the differences between sub-cultures and practices which differ in China from one place to another. There are 56 ethnicities officially recognized by the Chinese government, and many of them have their own languages.
Source: pinterest
Sadly, many business negotiations and deals often fail due to misunderstandings of the cultural differences between the West and China. The toughest thing of understanding a people is to grasp the nuances of their professional ethics, their values, their etiquette, and their protocol. Frequently, even some basic customs, mannerisms, and gestures are crucial for the successful execution of daily operations.
Westerners argue that the Chinese people will end up adapting to the western style of doing business. However, it is not going to happen in the short run. Do business in China in the Chinese way, or be prepared for mistrust and failures.
If you decided to do business in China, it is advisable that you find a reliable Chinese partner who can assist you in dealing with cultural differences. Of course, you have to choose the right marketing strategies in the Chinese market. It is highly recommended that you find a professional digital marketing agency in China that is likely to become your best business partner in exploring many exciting opportunities in the country.
4. Chinese consumer psychology
It has become crucial for foreigners to learn more about the cultural gap separating an average Chinese consumer and their Western counterpart. Companies that comprehend the nuances of Chinese consumer behavior and psychology have a better chance of winning new market niches and achieving long-term success.
1. Chinese consumers evaluate products differently from Westerners
Chinese people remain brand and quality conscious. Unlike Western shoppers, they focus on value so intensely that brand loyalty and at times even quality come secondary. An average Chinese customer is looking for relatively inexpensive products made of good quality materials and without defects. It is common for Chinese people to compare prices at many stores or websites before making a purchase.
Many Chinese people are interested in buying products only from the companies that offer post sales support and are committed to extending excellent customer service.
According to McKinsey 2016 China consumer report, Chinese consumers feel positive about their future income in spite of a slowing economic growth and a depreciating currency. They also are relatively neutral to the existing bubbles in the stock and real estate markets.
Source: McKinsey 2016 China consumer report
However, consumers are responding to the above-mentioned changes. They are becoming more attentive to product qualities and more selective about where they spend their money. Consumers tend to focus their attention on services rather than products.
3. McKinsey consumer report found that an average Chinese consumer is less materialistic than their Western counterpart.
Chinese consumers continue to pursue social status and want to earn high wages. Yet, having a happy family is too important for them to exchange it for wealth and other material values. They wish to have an interesting and balanced life where family and health take priority. According to McKinsey’s report, two-thirds of consumers say that shopping with the family is the best way to spend time with them.
Source: McKinsey 2016 China consumer report
4. Word of mouth is powerful in the Chinese consumer market.
Word of mouth is a more prominent source of product information than it is elsewhere in the world. It is so thanks mostly to the high Internet penetration rate in China and to the fast-growing use of the Internet in provinces. Chinese consumers see the Internet as a credible information source, in contrast to many Western counterparts.
5. Chinese consumers have the paradox between savings and spending.
Despite the economic liberalization and the Western influences, China still remains a collectivistic culture and a hierarchical society.
Although Chinese consumers have high savings rates as compared to people in the West, many pay high premiums for luxury items, especially if these things are used in public, like fashionable clothes, accessories, or mobile phones. Wearing such expensive and branded things allows them to distinguish themselves through consumption.
6. Chinese people are more conservative.
The psychology of a typical Western consumer is such that they eagerly move towards the extremes. In Asian cultures, people have the opposite desire: they want to stay away from extremes and view them as something undesirable. Chinese consumers conform to social traditions and are more moderate more than their Western counterparts. Often, international business in China that are more risk-taking than Chinese entrepreneurs.
7. Chinese consumers tend to invest heavily in their children.
Chinese people often pay a lot for high-quality education, care, and so on. The above is attributable to China’s current demographic situation and to the one-child policy that was finally canceled in 2015 by the government.
The one-child policy, which had been in force since 1979 until 2015, made the child more important in the family unit. Parents and other family members are all trying to help their children rise up in a fiercely competitive society.
Said El Mansour Cherkaoui in China – One Child of Friend Family
China in Recent Past – Family with 2 Children
8. One of the main trends in the behavior of a Chinese consumer is that they are shifting from mass to premium products.
McKinsey 2016 China consumer report found that 50% of Chinese consumers want and seek the best and most expensive offerings. The growth rate of the premium segments is currently higher than that of the mass and value segments. Yet, it seems to be a fairer estimate for coastal cities than for small towns and villages in provinces.
Source: McKinsey 2016 China consumer report
Foreign brands have a leadership position in the Chinese market. Another remarkable trend is that more Chinese consumers display loyalty to a few brands or a single brand. The number of people that eagerly switch from one brand to another dropped significantly.
All of the above-mentioned trends bear witness to the existing differences between Western and Chinese consumers. They also imply that the Chinese shoppers are developing into some of the world’s most complex consumers.
Doing business in China and being successful means that foreign entrepreneurs need to understand Chinese consumer psychology and profile.
5. Difficulty of achieving success in the Chinese mature market
In the 1990s, the Chinese economy was still emerging, and opportunities seemed to be endless. International business in China didn’t need to invent and apply special strategies. They could enter the market and make a fast buck in the unsaturated Chinese market. It was enough to have connections or guanxi.
In the span of the past twenty years, the situation has reversed. China’s market has been growing at a rapid pace and matured. Now, Chinese consumers are behaving in a manner which is both increasingly pragmatic and painstaking. Their horizons have expanded well beyond basic concerns about product features.
Nonetheless, the country still boasts of various opportunities to do business and collaborate. China offers many of the world’s biggest growth opportunities, but only for those businesses whose executives respond to this swiftly evolving marketplace. Now only companies that make a conscious and deliberate effort to better educate themselves about Chinese consumers and their evolving tastes and psychology succeed.
When you are about to enter the market and build connections, you don’t know how to approach Chinese consumers. Most definitely, you will find yourself lost in an ocean of thoughts and guesses about effective marketing strategies in the Chinese market. You lack country-specific knowledge and understanding of Chinese consumer behavior.
Imagine that you have just started doing business in China. It is never easy!What if you don’t identify your target audience correctly? Do you know your buyer personas? What if some of your offerings or business strategies are incongruent with Chinese culture and traditions? For example, China values harmonious relationships, which is why marketers emphasize this when crafting messages to customers.
Consumers don’t forgive and forget easily and quickly. The power of the Internet provides them with a myriad of opportunities to spread bad word of mouth about your company online. The Chinese people have long become digital natives, which gives them a loud collective voice whose echo can be heard well beyond China. All of the successful businesses in China take into account that Chinese people are digital natives.
How can you avoid potential business failures and the irreparable damage of your company’s reputation in the Chinese highly competitive market?
China is reshaping the global economy. Its economy is an engine of robust growth that will continue to compete with the West for economic dominance and political influence.
Most of the global economy remains under pressure and economic growth is weak in the US. Nevertheless, China has continued to be an engine of growth. If the country’s economy continues to grow at a steady pace of 6.5-7% over the next ten years, China will overtake the U.S. level and become the world’s biggest economy.
Source: bloomberg
Isn’t China attractive for foreign entrepreneurs and investors? Of course, it is!
The Chinese government is committed to reforms aimed at the further liberalization. As more doors will open wide for foreign companies to participate in its domestic economic growth, it is high time to think about doing business in China right now.
While the rest of the world is stagnating or is showing a less robust growth, enter the Chinese market! If you and your marketing consultant do everything correctly, your projects are likely to be a roaring success.
Corporate Council on Africa – CrossBoundary CrossBoundary was proud to support the U.S.-Africa Business Summit, held in Morocco under the … Continue reading
The report provides observations and insight into Chinese public opinion on global relations – 24 May 2023 – Additionally, it enhances the factors shaping these perceptions while highlighting critical nuances that provide a greater understanding of the complexities of Chinese public opinion ... Continue reading
The USA is the world’s largest national economy and, according to many, the world’s only remaining superpower. Even with the tremendous growth of emerging economies in parts of Asia, South America and Africa, US GDP is approximately double that of China, the world’s next largest economy. Although the US may seem familiar to many, thanks … Continue reading
Doing Business in China is not enough, it can work, however, building relationship in China can endure and share values at cultural levels – Knowing China is knowing how to do business and how to overcome hurdles in life,” by Said El Mansour Cherkaoui In 2010, China became the world’s second largest economy, in the…Continue Reading →
Frequently Asked Questions
Some Of The Most Common Questions We Get From Our Clients
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Morocco’s strategic location at the crossroads of Africa, Europe, and the Middle East makes it an ideal hub for trade, supply chain diversification, and business investment. Morocco is a competitive exporting hub in the region of Euro-African jonction. Moroccan economy offers competitive production costs and global access to strategic peripheral and neighboring markets. Morocco is also an African leader in the transition to a green economy. Morocco’s focus on renewable energy and inclusive free trade agreements makes it attractive to investors looking for innovation and future growth. In 2022, net FDI inflows reached 20.97 billion dirhams ($2 billion), an increase of 8.3 percent compared to the previous year.
★★★
Morocco has ratified 72 investment treaties for the promotion and protection of investments and 62 economic agreements – including with the United States and most EU nations – that aim to eliminate the double taxation of income or gains. Morocco is the only country on the African continent with a Free Trade Agreement (FTA) with the United States, eliminating tariffs on more than 95 percent of qualifying consumer and industrial goods. ★ ★ ★ ★ ★
★ ★★
★ Foreign Investment and Foreign Trade ★
Morocco has ratified 72 investment treaties for the promotion and protection of investments and 62 economic agreements – including with the United States and most EU nations – that aim to eliminate the double taxation of income or gains. Morocco is the only country on the African continent with a Free Trade Agreement (FTA) with the United States, eliminating tariffs on more than 95 percent of qualifying consumer and industrial goods. ★ ★ ★ ★ ★
Morocco has the ambition to position itself as an essential export platform for investors wishing to target dynamic markets with high growth potential in Northern and Southern Europe, in Africa, in the vicinity of the Middle East, and in the United States of America, and the Asian nations with whom a trade relationship has been re-established since the independence of the Moroccan Kingdom.
Morocco indeed stands out as a strategic and competitive exporting hub in the region including the following key strengths:
Competitive Production Costs:
Morocco boasts competitive production costs, making it an attractive destination for businesses. Its labor cost efficiency, coupled with a young population (42% under 25 years old), contributes to this advantage.
Tailor-made training modules ensure a steady supply of highly qualified workers, ready to meet investors’ demands.
Global Access to Strategic Markets:
Geographically, Morocco is strategically positioned at the crossroads of Europe, Africa, and the Middle East, standing with just 14 km from Europe, providing easy access to key markets.
The country has free trade agreements (FTAs) with over 50 countries, facilitating trade and investment. These agreements enhance Morocco’s role as a global supply chain hub.
Under the guidance of King Mohammed VI, Morocco is transitioning toward a green economy. The country aims to become one of the greenest and lowest-carbon platforms globally.
Morocco’s combination of competitive costs, global market access, and sustainability initiatives positions it as an attractive destination for foreign investment and industrial projects. Morocco’s pro-business policies, tax incentives, and commitment to infrastructure development make it an attractive destination for foreign investment. The government’s efforts aim to create a conducive environment for economic growth and job creation.
The Moroccan government actively encourages foreign investment through various policies and initiatives that are offered as support to foreign investors
Investment Promotion Agencies:
Morocco has established agencies like the Moroccan Investment Development Agency (AMDI) and the Moroccan Agency for Solar Energy (MASEN). These agencies provide information, guidance, and incentives to foreign investors.
AMDI assists investors in setting up their businesses, obtaining permits, and navigating legal requirements. MASEN focuses on renewable energy projects.
Free Trade Zones and Industrial Parks:
Morocco offers free trade zones (such as the Tangier Free Zone) and industrial parks (like Casablanca’s Midparc) with tax incentives, streamlined procedures, and infrastructure.
These zones attract foreign companies by providing a favorable business environment.
Tax Incentives and Exemptions:
The government provides tax breaks for specific sectors, such as renewable energy, export-oriented industries, and tourism.
Foreign investors may benefit from reduced corporate tax rates, exemptions on dividends, and customs duties.
Investment Guarantees and Protection:
Morocco has bilateral investment treaties (BITs) with several countries, ensuring protection against expropriation and guaranteeing fair treatment.
The government also offers investment insurance through the Moroccan Investment Insurance Company (MIGA).
Infrastructure Development:
The government invests in infrastructure projects: ports, roads, railways, and airports. This enhances connectivity and logistics for businesses.
Sector-Specific Support:
For specific sectors like renewable energy, the government provides incentives, auctions, and long-term power purchase agreements (PPAs).
In agriculture, there are programs to improve irrigation, promote organic farming, and support agribusiness.
Simplified Procedures:
The government has simplified administrative procedures for business registration, permits, and licenses.
The Single Window for Investment (Guichet Unique) streamlines processes for investors.
Skilled Workforce Development:
Morocco invests in education and vocational training to develop a skilled workforce.
Foreign investors benefit from a pool of qualified professionals.
Strategic Sectors:
The government identifies strategic sectors (such as automotive, aerospace, and textiles) and provides targeted support.
For example, the Tanger Med Port is a hub for automotive manufacturing and exports.
Public-Private Partnerships (PPPs):
The government collaborates with private entities in infrastructure projects, creating opportunities for foreign investors.
« La dynamique d’investissement, la relance économique et la création d’emploi doivent être accompagnées par des CRI 3.0 plus proches des investisseurs, plus forts et mieux dotés afin qu’ils supervisent l’intégralité du processus d’investissement et qu’ils en accroissent l’efficience, conformément aux Hautes Orientations de Sa Majesté Le Roi Que Dieu L’assiste. » Mohcine Jazouli
Ce nouveau palier de la réforme doit permettre de consolider leur positionnement, d’accélérer la croissance économique et de dynamiser la création d’emplois au niveau des territoires.
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Morocco’s Investment and Export Development Agency (AMDIE) ★ is the national agency responsible for the development and promotion of investments and exports. Following the reform to the law governing the country’s Regional Investment Centers (CRIs) in 2019, each of the 12 regions is empowered to lead their own investment promotion efforts. The CRI websites aggregate relevant information for interested investors and include investment maps, procedures for creating a business, production costs, applicable laws and regulations, and general business climate information, among other investment services.
★ ★★
★
★ Foreign Investment and Foreign Trade ★ Morocco has ratified 72 investment treaties for the promotion and protection of investments and 62 economic agreements – including with the United States and most EU nations – that aim to eliminate the double taxation of income or gains. Morocco is the only country on the African continent with a Free Trade Agreement (FTA) with the United States, eliminating tariffs on more than 95 percent of qualifying consumer and industrial goods.
★★★ ★★
Morocco has been successful in attracting foreign direct investments (FDI) across various sectors. Here are some notable examples
Renewable Energy Projects: Morocco has secured significant FDI in renewable energy. For instance:
Total Eren (Luxembourg) plans to construct a hydrogen and green ammonia production facility in Morocco with an investment exceeding USD 10 billion.
Chinese companies, especially in the electric vehicle supply chain, have contributed to Morocco’s surge in greenfield FDI. Notable projects include Gotion High-Tech’s gigafactory and Huayou Cobalt’s electric vehicle battery components factory.
Automotive and Aerospace Industry:
Morocco’s automotive sector has attracted substantial investments. The country is the world’s fastest-growing automotive cluster and leads Africa in passenger car manufacturing. Foreign automakers have established production facilities in cities like Tangier.
The aerospace industry has also seen growth, with companies like Bombardier and Safran investing in Morocco.
Tourism and Real Estate:
FDI in tourism and real estate has been significant. Morocco’s rich cultural heritage, beautiful landscapes, and strategic location attract investors.
Hotel chains, resorts, and luxury properties have been developed with foreign investment.
Textile and Apparel Industry:
Morocco’s textile and apparel sector benefits from FDI. The country is known for its quality textiles, and foreign companies have set up production units.
Financial Services and Banking:
Foreign banks and financial institutions have invested in Morocco’s banking sector. The country’s stable currency and political framework make it an attractive destination.
Infrastructure and Logistics:
Investments in ports, roads, and logistics infrastructure enhance Morocco’s connectivity. The Tanger Med Port is a hub for automotive exports.
Agribusiness and Food Processing:
FDI in agriculture, food processing, and export-oriented agribusiness contributes to Morocco’s economic growth.
Mining and Energy:
Morocco has attracted investments in mining (such as phosphates) and renewable energy (solar and wind projects).
Education and Technology:
Foreign investors have shown interest in education, especially in setting up international schools and universities.
The government encourages technology investments, aiming to position Morocco as a regional tech hub.
Industrial Acceleration Plan and Economic Modernization:
The Moroccan government’s Industrial Acceleration Plan has facilitated FDI by creating industrial systems and promoting partnerships.
The second phase (2021-2025) focuses on consolidating achievements and integrating small and medium enterprises.
Automotive Industry in Morocco par Said El Mansour Cherkaoui:
The country in northwest Africa is bordered by the Strait of Gibraltar and the Mediterranean Sea in the north, by Mauritania in the south, by Algeria in the east, and in the west by the Atlantic Ocean.
Political Environment:
By Article I of the 2011 Constitution, Morocco is a constitutional, democratic, parliamentary and social monarchy:
The king is the Head of State of Morocco, the Supreme Representative of the nation, the symbol of its unity, and the guarantor of the permanence and continuity of the State. His Majesty presents also the Supreme Arbiter between the Institutions and appoints the Head of Government from the political party with a majority of seats to act in the Chamber of Representatives.
The parliament which is composed of two chambers (the Chamber of Representatives and the Chamber of Councillors) exercises the legislative power in the Kingdom, votes on laws, controls the activities of the Government, and evaluates public policy.
Executive power is exercised by the government
Economic Overview:
The Moroccan economy is characterized by a great openness to the outside world. Since the early 80s, Morocco has adopted an economic and financial openness policy aiming at improving the liberalization of foreign trade, the largest integration of the Moroccan economy into the international economy, and at strengthening of contribution to the consolidation of a multilateral trading system.
In this regard, significant advances in the modernization of economic and financial structures and upgrading of the legal and institutional frameworks have been accomplished. The aim is to permanently accelerate economic growth in Morocco and to improve the living conditions of its citizens.
In this context, Morocco undertook the simplification of foreign trade procedures, a reduction in tariff protection, the elimination of non-tariff measures, the improvement of the business and investment environment, the expansion and the diversification of economic and trade relations and finally, regular contributions to consolidate the multilateral trading system. This opening is further illustrated by the signing of various free-trade agreements by the Kingdom with its main economic partners, including the European Union, the United States, and in both Arab and African countries. In addition, a set of legal texts were enacted or modified to support these reforms. These include, for example, the Investment Charter, the Commercial Code, the law establishing the commercial courts, the Customs Code, the Law on free pricing and competition, the regulation of the State’s markets, and the Law on the protection of industrial and commercial property.
Moreover, the establishment of new sector policies based on comparative advantages of the Moroccan economy (Industrial Acceleration Plan 2014-2020, Vision 2020 for Tourism, Vision 2015 for the Craft Industry, Rawaj Plan for Trade 2020, the Green Morocco Plan for Agriculture, Halieutis Plan for Fishing. etc) should promote, in the coming years, a sustained and sustainable growth.
In order to support these sectoral strategies and strengthen long-term growth, Morocco has initiated several strategies relating to infrastructure and logistics:
Presentation of the Subsidies, Financing Plans and Tax Benefits for Investments Realized in Morocco
With regards to the financing of investments, Morocco has subsidy funds, the Kingdom also provides financing plans and grants tax advantages. A non-exhaustive list is presented below:
Industrial Development and Investment Fund (FDII): Companies can benefit from a subsidy for tangible and intangible investment that can be up to 30% of the investment’s amount excluding taxes;
Morocco PME: ISTITMAR CROISSANCE program for VSEs: Support for extension and diversification projects that can reach 30% of the investment’s amount capped at 2 Mn MAD, for very small businesses having achieved or forecasted a turnover less than or equal to 10 Mn MAD.
IMTIAZ CROISSANCE program for SMEs: support for extension and diversification projects that can be up to 20% of the investment program, capped at 10 Mn MAD, for small businesses that carried out or forecasted turnover does not exceed 200Mn MAD.
Investment Promotion Fund (FPI): This fund manages the operations relating to the assumption of certain advantages by the Government granted to companies whose investments respect the conditions outlined in the investment charter:
Support for acquiring land in specific areas up to 20% of the purchase cost.
Participation in external infrastructure expenses up to a limit of 5% of the investment program’s total amount.
Contribution to training costs up to a limit of 20% of the incurred expenses.
Finishing, Printing, Dyeing Fund (FIT): This fund grants a 20% premium on equipment investment dedicated to upstream textile projects.
“IDMAJ” program: This program aims to promote recruiting young graduates by granting companies offering a first professional experience the exemption from social contributions and payroll taxes.
“TAEHIL” program: This program offers training to future hired employees and job seekers in order to adjust their profiles to the specificities of the position to be filled and to the market’s requirements.
“INMAA” program: This program aims to improve the industrial performance and the competitiveness of Moroccan industries by providing their teams with training and support in Lean management for the implementation of Lean tools. The cost of this service can be subsidized up to 60% through the MOUSSANADA program.
Value Added Tax (VAT) exemption5: Companies established in Morocco can benefit from the exemption or reimbursement of the VAT provided for by the Moroccan Tax Code, in the event of:
Local acquisition of import of investment goods within the limit of 36 months starting from the beginning of the company’s activity.
Import of the capital goods, materials, and tools necessary for the completion of investment projects undertaken within the framework of an agreement concluded with the State under certain conditions.
Existence of a VAT credit arising from the acquisition of certain investment goods that could not be absorbed by the collected tax.
Corporate Income Tax (CIT) exemption: Industrial companies operating in activities included in the list provided for by the Government benefit from the advantages below:
Total exemption from CIT for the first five consecutive fiscal years starting from the date the company starts operating.
Application of a reduced tax rate of 28% to the local turnover carried out by industrial companies specialized in manufacturing or transforming tangible personal property and which tax result is less than MAD 100M (Approximately EUR 9M) check the current rate of exchange and new tax.
Professional tax: Companies established in Morocco exercising a professional, industrial, or commercial activity benefit from the exemption from professional tax during the first 5 years of operation7. The aforementioned exemption also applies, for the same duration, to lands, buildings of any kind, additions to buildings, new equipment, and tools acquired during operation, directly or by way of leasing.
N.B: These indications are given for information purposes and do not constitute an acceptance on our part and our employees. Please conduct your due diligence and evaluation before any decision is made regarding the data herein and your business in Morocco. To be updated according to the current publications of the Government of the Kingdom of Morocco and its regional and representative organizations.
Moreover, the EU has granted Morocco an “advanced status” which gives it the possibility to further integrate into the European Single Market and to participate to some inter-European cooperation programs reserved for members only, thanks to the privileged relations between Morocco and the EU, and given the progress realized in the political, economic and social fields, as well as the many reforms undertaken by the Kingdom.
Finally, the process of economic openness and integration into the global economy is consolidated through the conclusion of free-trade treaties with the United States, the European Union, EFTA, Turkey, and member States of the Arab League as part of the Greater Arab Free Trade Area, and the Mediterranean Arab countries as part of Agadir Agreement.
On the continental level, the reinforcing cooperation with African countries has gained new impetus during the reign of His Majesty King Mohammed VI. This new vision of openness has materialized through the conclusion, since the early 2000s, of more than 1000 cooperation agreements with more than 40 countries and by the upward trend in the country’s direct investments in sub-Saharan Africa, which have reached $ 3 billion in the past 10 years, placing our country as the 2nd African investor and the 1st investor in West Africa.
As such, Casablanca Finance City (CFC) offers international investors a platform strongly connected with Africa and privileged access to investment opportunities through, among others, the Africa 50 Fund which aims to meet the development needs of infrastructure in Africa.
★Version Française ★★
Publications par Said El Mansour Cherkaoui
★★★★★★★
Marrakech Investor Day : le pôle régional de l’investissement au service de l’économie – 7 avril 2022 Marrakech – La première édition du « Marrakech Investor Day » (Journée des Investisseurs) a été organisée hier, mercredi, au Musée Mohammed VI de la Civilisation de l’Eau au Maroc (AMAN), à l’initiative du Centre Régional d’Investissement Lire la suite « Marrakech Investor Day : le pôle régional de l’investissement au service d
Bridge to Europe, Gateway to Africa, the Door to the Mediterranean Portal
Window to the Atlantic.
To find out more on Morocco
Initially, there was the Emergence Plan, initiated following a study by the McKinsey firm commissioned during Salaheddine Mezouar’s mandate in the Industry Portfolio (2004-2007).
Ahmed Réda Chami, tried to give substance to a National Pact of Industrial Emergence, a strategy focused on sectors in which Morocco is competitive through its cheap labor. Then came the Industrial Acceleration Plan (IAP), launched with great fanfare in 2014 by Moulay Hafid Elalamy, a few months after his arrival at the head of the Ministry of Industry.
Does Morocco have an economic development strategy?
The Renault plant in Tangier is dedicated to the production of Lodgy and Dokker models, from stamping to assembly, including sheet metal work and painting. The project is located on 300 acres with all utilities with low cost vehicle capacity. The Logdy family vehicle, the latest addition to Dacia, the low-cost branch of the Renault group, will be manufactured in this new plant.
Intended primarily for emerging markets, it will also be marketed in Europe. This unit, taking advantage of low labor costs, could create 6,000 direct jobs and 30,000 indirect jobs in northern Morocco. Leading suppliers or subcontractors are already established in the free export zone, located opposite Spain. This unit benefits from corporate tax exemption for five years, VAT relief, training subsidies, financial aid for construction.
The automotive industry in Morocco
Renault and Tanger Med – Cluster for Automotive Deployment platform for the input range
Pont vers l’Europe, Porte vers l’Afrique, la Porte vers le Portail de la Méditerranée
Fenêtre sur l’Atlantique
Pour en savoir plus sur le Maroc
Au départ, il y a eu le Plan Emergence, initié à la suite d’une étude du cabinet McKinsey commanditée pendant le mandat de Salaheddine Mezouar au Portefeuille Industrie (2004-2007).
Ahmed Réda Chami, a tenté de donner corps à un Pacte National de l’Emergence Industrielle, une stratégie centrée sur les secteurs dans lesquels le Maroc est compétitif grâce à sa main-d’œuvre bon marché. Puis est venu le Plan d’accélération industrielle (PAI), lancé en grande pompe en 2014 par Moulay Hafid Elalamy, quelques mois après son arrivée à la tête du ministère de l’Industrie.
Le Maroc a-t-il une stratégie de développement économique ?
L’usine Renault de Tanger est dédiée à la production des modèles Lodgy et Dokker, de l’emboutissage à l’assemblage en passant par la tôlerie et la peinture. Le projet est situé sur 300 hectares avec tous les services publics avec une capacité de véhicules à bas prix. Le véhicule de la famille Logdy, dernier-né de Dacia, la branche « low-cost » du groupe Renault, sera fabriqué dans cette nouvelle usine.
Destiné en priorité aux marchés émergents, il sera également commercialisé en Europe. Cette unité, profitant du faible coût de la main-d’œuvre, pourrait créer 6 000 emplois directs et 30 000 emplois indirects dans le nord du Maroc. Des fournisseurs ou sous-traitants de premier plan sont déjà implantés dans la zone franche d’exportation, située face à l’Espagne. Cette unité bénéficie d’une défiscalisation des entreprises pendant cinq ans, d’un dégrèvement de TVA, de subventions à la formation, d’aides financières à la construction.
L’industrie automobile au Maroc
Renault et Tanger Med – Cluster for Automotive Plateforme de déploiement de la gamme input
The Renault plant in Tangier is dedicated to the production of Lodgy and Dokker models, from stamping to assembly to sheet metal and paint. The project is located on 300 hectares with all utilities with a capacity of low-cost vehicles. The Logdy family vehicle, the latest from Dacia, the “low-cost” branch of the Renault group, will be manufactured in this new factory.
Intended primarily for emerging markets, it will also be marketed in Europe. This unit, taking advantage of the low cost of labor, could create 6,000 direct and 30,000 indirect jobs in northern Morocco. Leading suppliers or subcontractors are already established in the export processing zone, located opposite Spain. This unit benefits from a tax exemption for companies for five years, VAT relief, training subsidies, and financial aid for construction.
Automobile Industry in Morocco
Renault and Tangier Med – Cluster for Automotive Platform for deployment of the input range
published by Said El Mansour Cherkaoui May 22, 2020 Introductory Note: 2017 Progress Report – Industrial Acceleration Plan 2014 – 2020 Ministry of Industry, Investment, Trade and Digital Economy – March 2018 The Industrial Plan should be carried out in 2020: What about it? The compilation of my notes published in the form of an article with several sections consists of an analysis of the …Continuer de lireDevelopment of the Car Industry in Morocco: Regional Strategy and Globalization of Renault
According to various sources, the cost structure of this project is € 1.1 billion committed in two tranches, of which equity capital, equity, and current accounts amount to € 240 million, divided by 51% and 51% respectively. 49% between Renault-Nissan (France) and Caisse de Dépôt et de Gestion (CDG – Morocco). Renault’s financial contribution is therefore 122.4 million euros, while 117.6 million euros come from CDG, contributing 11.12% of the total amount of 1.1 billion euros. euros, while for Renault, the essential remains its contribution in technology and know-how. The Hassan II fund is one of the largest contributors to this project with an investment of 200 million euros in the form of a loan at a subsidized interest rate to Renault. Three other Moroccan banks Attijariwafa Bank, the Banque Populaire Group and the BMCE, provided funding of 105 million euros, with equal participation in the project aspect in infrastructure equipment and civil engineering.
These banks also finance the other subcontractor facilities which are formed by about 80 companies to supply spare parts for the production of cars by Renault as well as for the export to other Renault sites in Europe and Europe. elsewhere. In the structuring of this financing, the Moroccan State commits itself through a direct contribution of 95 million euros, (more than a billion dirhams), on the total amount of the first tranche of the investment. This amount was realized at the level of subsidies from the Moroccan State in the form of land developed off-site of several hectares.
Among these financial interventions of the Moroccan State directly concern the infrastructural and logistic development such as the construction of railways and roads by the ONCF and the ONEP conceived for the needs of the transport of the cars intended for the export through in particular the new port of Tangier Med. This synergy is the responsibility of the Moroccan State which directly finances the equipment of the new facilities of storage and parking as well as the construction of port moles such as Tanger Med where all the port infrastructures are put at the disposal of the project as well as a storage space of several hectares reserved on the port to park cars waiting for export.
The second tranche is approximately 460 million euros (more than 5 billion dirhams) and was reserved through partial financing in the form of cash receipts – free cash flow and up to 40% to 60% by debt .
The interests of Renault in Morocco are mainly constituted by the desire to consolidate the control of the Moroccan automobile market and by the unique opportunities that are offered by the operation of Tangier. Renault is currently the dominant company in the Moroccan automotive market. The Dacia and Renault brands, owned and operated by Renault, represent respectively 20% and 17% of the market. Renault is already operating a plant in Casablanca and the increased production of this new plant will allow the company to maintain its market share as the Moroccan automotive industry grows.
Container bridge for exports to emerging and European markets
However, this facility meets a much more important goal for Renault than simply maintaining control of the Moroccan market. The Tangier industrial zone offers many significant advantages for industrial operations.
First and foremost, the Renault plant is located near the port of Tangier Med, allowing for easy and efficient shipment of goods. This port is located in a key geostrategic location at the intersection of Africa and Europe.
Renault plans to exploit the location of this port, as it will be shipped to Europe, Turkey, Africa and South America from Tangier. In addition, the port has developed several logistics and post-processing services dedicated to the automotive industry, which add greater value to Renault’s operations in Tangier.
In 2010, Renault employed 1,800 people in Morocco and assembly facilities accounted for 1.4 percent of the Group’s total, whose production in 2007 was 28,764 vehicles, or 1 percent of the Renault Group’s total.
Renault production started in Morocco in 2012 and produced 229,000 cars in 2015. The initial annual production capacity of 170,000 models has increased significantly to 229,000 cars in 2015 and currently reaches 400,000 vehicles per year.
“Today, we are reaching the full potential of this plant, which has a production capacity of 400,000 vehicles a year and has become one of the most efficient in the world,” said Carlos Ghosn.
Tangier, Morocco: 2015
Tangier as an industrial location for Renault has also helped structure the network of suppliers supplying the Renault plant and also for export to Europe and elsewhere. The Renault plant served as a magnet for these peripheral automotive parts suppliers, not only in Northern Morocco but also near and just north of Casablanca, in Kenitra, where PSA Peugeot Citroën is currently building a plant to be completed. 2019. Peugeot is planning an initial production capacity of 90,000 cars per year and 200,000 in 2022. Peugeot vehicles will mainly be destined for African markets.
★ Foreign Investment and Foreign Trade ★ Morocco has ratified 72 investment treaties for the promotion and protection of investments and 62 economic agreements – including with the United States and most EU nations – that aim to eliminate the double taxation of income or gains. Morocco is the only country on the African continent with a Free Trade Agreement (FTA) with the United States, eliminating tariffs on more than 95 percent of qualifying consumer and industrial goods.
Morocco’s Investment and Export Development Agency (AMDIE) ★ is the national agency responsible for the development and promotion of investments and exports. Following the reform to the law governing the country’s Regional Investment Centers (CRIs) in 2019, each of the 12 regions is empowered to lead their own investment promotion efforts. The CRI websites aggregate relevant information for interested investors and include investment maps, procedures for creating a business, production costs, applicable laws and regulations, and general business climate information, among other investment services.
Morocco Background
The International Finance Corporation recognizes Morocco as a top market reformer in the Middle East and North Africa. The nation has emerged as a commercial hub as a result of its economic reforms, investment incentives, competitive costs of production, modern banking processes, strong laws to protect intellectual property, and proximity to major markets. Morocco has a Free Trade Agreement with the United States and an Association Agreement with the European Union (EU).These agreements attract traders looking to enter Morocco, the world’s largest markets (such as the EU and the United States), and the world’s fastest growing markets (e.g., Africa). The U.S. – Morocco Free Trade Agreement entered into force in January 2006, eliminating duties on more than 95 percent of all goods and services, and U.S. exports have grown dramatically since then.
As the United States was struggling in its battle for independence from Great Britain, Sultan Mohammed III of Morocco was among the first heads of state in the world to grant American ships port access. By royal decree in 1777, Sultan Mohammed III provided the Americans with an economic ally and began what would become the longest unbroken diplomatic relationship in the history of the United States. With the more contemporary 2006 free trade agreement causing an increase in American and Moroccan exports from $481 million to $3.5 billion and $446 million to $1.6 billion
The Investment Charter, Law 18-95 of October 1995, is the current foundational Moroccan text governing investment and applies to both domestic and foreign investment (direct and portfolio).
Morocco Foreign Direct Investment (FDI) increased by 1.2 USD bn in June 2022, compared with an increase of 416.3 USD mn in the previous quarter. Morocco Foreign Direct Investment: USD mn net flows data is updated quarterly, available from Mar 2014 to Jun 2022.
According to data from the country’s foreign trade watchdog, the Exchange Office (OE), Morocco welcomed MAD 6.3 billion ($578 million) in investments from the US in the first half of 2022, compared to MAD 5.6 billion ($513.7 million) from France.
For the United Nations Conference on Trade and Development’s (UNCTAD) World Investment Report 2020 , Morocco attracted the eighth most foreign direct investment (FDI) in Africa. Following a record year in 2018 where Morocco attracted $3.6 billion in FDI, inbound FDI dropped by 55 percent to $1.6 billion in 2019. Despite the global COVID-19 pandemic, FDI inflows to Morocco remained largely stable totaling $1.7 billion in 2020, according to the Moroccan Foreign Exchange Office, a slight increase of one percent from the previous year. France, the UAE, and Spain hold a majority of FDI stocks. Manufacturing has the highest share of FDI stocks, followed by real estate, trade, tourism, and transportation. Morocco continues to orient itself as the “gateway to Africa” for international investors following Morocco’s return to the African Union in January 2017 and the launch of the African Continental Free Trade Area (CFTA) in March 2018, which entered into force in 2021.
In June 2019, Morocco opened an extension of the Tangier-Med commercial shipping port, making it the largest in the Mediterranean and the largest in Africa. Tangier is connected to Morocco’s political capital in Rabat and commercial hub in Casablanca by Africa’s first high-speed train service. Morocco continues to climb in the World Bank’s Doing Business index, rising to 53rd place in 2020, rising on the list by 75 places over the last decade. Despite the significant improvements in its business environment and infrastructure, high rates of unemployment, weak intellectual property rights protections, inefficient government bureaucracy, and the slow pace of regulatory reform remain challenges.
Morocco has ratified 72 investment treaties for the promotion and protection of investments and 62 economic agreements, including with the United States and most EU nations, that aim to eliminate the double taxation of income or gains. Morocco is the only country on the African continent with a Free Trade Agreement (FTA) with the United States, eliminating tariffs on more than 95 percent of qualifying consumer and industrial goods.
The Government of Morocco plans to phase out tariffs for some products through 2030. The FTA supports Morocco’s goals to develop as a regional financial and trade hub, providing opportunities for the localization of services and the finishing and re-export of goods to markets in Africa, Europe, and the Middle East.
Since the U.S.-Morocco FTA came into effect bilateral trade in goods has grown nearly five-fold. The U.S. and Moroccan governments work closely to increase trade and investment through high-level consultations, bilateral dialogue, and other forums to inform U.S. businesses of investment opportunities and strengthen business-to-business ties.
Dr. Said El Mansour Cherkaoui has organized several trade missions in California, North and Sub Saharan Africa, China, France and Spain. Similarly, he has contributed in the setting of trade relations within the scope of the US – Morocco Free Trade Agreement (MAFTA). Dr. Cherkaoui’s profile can be accessed at this link: https://www.linkedin.com/in/drsaidcherkaoui/ Morocco Background The… Read More USA and Morocco: Trade Profile
Morocco and United States Trade Relations
Morocco is located in Northwestern Africa and is slightly geographically larger than California. The capital of Morocco is Rabat, which is bordered by the Atlantic Ocean. Morocco has a population of 34.37 million people and a gross domestic product (GDP) of $100.6 billion. Due to its proximity to Europe along the strategic location as a gateway to Africa, Morocco has created strong trade relationships and promotes an open market economy. In 2015, the US had $304 million in foreign direct investment (FDI) in Morocco.
The United States is the fourth largest importer of Moroccan goods.
In 2016, the US imported roughly $1 billion worth of goods from Morocco. The largest category of imported goods was chemicals, which made up 36.8% or $375 million of the total. Other imports from Morocco included food manufactures, apparel manufacturing products, and transportation equipment. In the same year, the United States exported $1.86 billion worth of goods to Morocco, which was an increase from the previous year. In the same year, the United States exported $1.86 billion worth of goods to Morocco, which was an increase from the previous year .
The main exports to Morocco were transportation equipment (31.6%), agricultural products (15%), and petroleum and coal products (8.7%). Export data pulled from the International Trade Administration (ITA) shows that average US exports to Morocco have more than tripled since the US-Morocco Free Trade Agreement (FTA) went into effect just over a decade ago.
President George W. Bush signed the FTA, the first US free trade agreement with an African country, exactly twelve years ago today; and the agreement went into effect on January 1, 2006.
In the three years before the FTA (2003-2005), US exports to Morocco averaged $482 million; in the past three years (2013-2015), they increased 328 percent to $2.1 billion.
At the state level, Texas claims the spot as the top exporter to Morocco, both in 2015 and on average over the past three years, exporting $510 and $710 million worth of goods, respectively. Other top state exporters when looking at three-year averages include Louisiana, West Virginia, Washington, and California in descending order; considering only 2015, Washington, Louisiana, Virginia and California rounded out the top five following Texas.
When looking at sheer growth in exports since before the FTA, other states emerge as winners. Nevada experienced the biggest boost in exports at a nearly 13,000% increase; Idaho’s exports increased by nearly 11,000%; Montana’s by just over 10,000%; New Mexico by nearly 4,500%; and West Virginia by just under 4,000%.
Morocco has been doing everything right to strengthen and diversify its economy,” said former US Ambassador to Morocco Edward M. Gabriel. “Choosing Morocco as the US’s first FTA beneficiary in Africa was a smart move, and I believe the US will continue benefiting from this strong relationship for years to come.
”Here below, you will found presentations on the California – Morocco Trade and the MAFTA – Morocco Free Trade Agreement with the United States including investment opportunities in Morocco.
With an annual Gross Domestic Product growth rate of nearly five percent over the past five years, Morocco’s recent economic history is one of macroeconomic stability and low inflation, despite the challenges of the Arab Spring. In the World Bank’s 2017 Doing Business report, Morocco’s rating improved to 69th in the world.Morocco is conveniently located for investors who are interested in exporting to Europe and Africa. Moreover, the availability of skilled and competitive labor at lower costs, relative to Europe, is a key factor in attracting automakers to Morocco. These automakers are also eligible for tax exemptions for 25 years, provided that most of the production is destined for export.“
The interests of Renault in Morocco remains the control of the Moroccan automobile market, the availability of very-affordable and relatively well-educated workforce and the bridge to Europe and the Gateway to Africa and Middle East that Morocco provide through its strategic geographical location. Additional benefits can be also the unique opportunities that are offered by the operation of Tangier. Renault is currently the dominant company in the Moroccan automotive market. The Dacia and Renault brands, owned and operated by Renault, represent respectively 20% and 17% of the market. Renault is already operating a plant in Casablanca and the increased production of this new plant will allow the company to maintain its market share as the Moroccan automotive industry grows.” (Said El Mansour Cherkaoui)
Morocco Tourism Investment Road Show to the U.S. WHEN: January 25, 2018 – January 26, 2018 all-day – WHERE: Los Angeles, CA – USA
The Morocco Free Trade Agreement (MAFTA)
The Morocco Free Trade Agreement (MAFTA) went into effect on January 1, 2006. Under the agreement most Moroccan goods enter the United States duty free and virtually all will enter free by the time it is fully implemented on January 1, 2023. The Morocco FTA does NOT provide a merchandise processing fee (MPF) exemption.
The Morocco Free Trade Agreement (MAFTA) went into effect on January 1, 2006. Under the agreement most Moroccan goods enter the United States duty free and virtually all will enter free by the time it is fully implemented on January 1, 2023. The Morocco FTA does NOT provide a merchandise processing fee (MPF) exemption. To learn more about how to claim preference on these goods, select the following:
This document provides the most relevant information in HTSUS General Notes 27 and 19 CFR Subpart M.
Data Elements for the Morocco FTA Certificate of Origin – Attachment A
This certification can be used by Moroccan producers and exporters, and US importers, when attesting that their goods meet the requirements of the Morocco FTA.
General note, including the General Rules of Origin, Definitions, Value (including Regional Value Content and De Minimis), Sets, Packing and Packaging Materials, Indirect Materials, Record keeping and the all-important Product Specific Rules of Origin
NOTE: On the USITC link, select the “General Notes; General rules of Interpretation; General Statistical Notes,” link, followed by “General Notes 27”.
The following Morocco FTA goods may be subject to a reduced tariff rate quota (TRQ): beef; dairy; dried onions; dried garlic; peanuts; tomato paste, puree and sauce; tobacco; cotton; fabric and apparel.
The Reconciliation Prototype is unavailable for post-importation Morocco FTA claims because they are not administered under 19 USC 1520(d) but as Post Entry Amendments (PEAs), Post Summary Corrections (PSCs) or Protests (19 USC 1514, 19 CFR 174).
Morocco is also pursuing its own opening economic strategy, developing its trade relations with regional economic communities in Africa .. More to read at this link: Integration of Africa with Morocco
Made available by the United States Trade Representative (USTR).
Last published: November 16, 2017
Additional information is available at the US Department of Commerce, International Trade Administration and the Department of Justice in Washington, DC., Marketwired (August 17, 2016) and World Bank, BEA.
Editor: Said El Mansour Cherkaoui, Ph.D.
US Aid to Morocco: Olive and Agricultural Products
In 2004, Congress created the Millennium Challenge Corp., a foreign aid agency headed by the secretary of state, to help developing countries reduce poverty. Since its inception, the agency has authorized grants totaling more than $7 billion to help 23 African and Latin American countries.
In 2007 the agency agreed to give Morocco $697.5 million over five years to improve the country’s employment rate and salaries by investing in its fruit-tree farms, small-scale fisheries and artisan crafts, according to Millennium. Nearly half of that money – $320 million – is earmarked for the Fruit Tree Productivity Project, with 80 percent of the cash going to olives and the rest to improve date, fig and almond production. Dates, figs and almonds are also key California crops.
Patrick Fine, who oversees such agreements as Millennium’s vice president of compact operations, said he does not believe that the investment in Morocco will harm California producers. … Not meeting demand “I …
Patrick Fine, who oversees such agreements as Millennium’s vice president of compact operations, said he does not believe that the investment in Morocco will harm California producers. The project, he said, is designed to help poor rural families increase their incomes and to help develop a strong ally in an important region in the world.
We present you a part of our extensive work of analysis on Africa that we have conducted since 1977 while I was still a Simple Moroccan Student at SciencesPo Grenoble.
Africa has been and is still my Road Compagnon since I moved from our Motherland and the proximity of my Mother to seek knowledge in Europe.
My analysis of Africa and its relation with European and international entities is driven by my search for means, ways, and elements that I can use in the process of breaking down this complex topic or substance into smaller parts to gain a better understanding of it.
My studies on Africa are conducted en Francais / in English within a frame that I labeled – “Destin African” / “Africa Destiny” – which are the Categories of my work. In each category, I developed an analysis of the main areas and domains that have shaped and impacted the evolution of African countries
African leaders have suddenly become believers in the benefits of international trade liberalism which have … Continue reading
Africa is home to 30% of the world’s mineral reserves, 8% of the world’s natural gas, and 12% of the world’s oil reserves. Half of the global population growth from 2022 to 2050 will occur in sub-Saharan Africa.
Africa is the world’s second-largest continent and has the second-fastest growth rate after Asia. It is home to 1.3 billion people and 54 sovereign countries.
Africa is rich in natural resources, including oil, natural gas, minerals, forests, and wildlife. In 2007, Africa produced 12.5% of the world’s oil and 6.45% of the world’s natural gas.
Africa is also the world’s youngest continent, with a median age of 20 years and 60% of the population under the age of 25. This means that Africa has the potential to shape geopolitics and world economics in the future.
Africa is also the world’s largest free trade area and has a 1.2 billion-person market. In 2018, Africa was home to six of the world’s ten most dynamic economies.
Africa is an important investment destination for many leading U.S. industries and Fortune 500 companies. This contributes to U.S. jobs and increases the revenue base for several cities.
Today, I selected within the category of “Africa Destiny,” the topics of finance and investment that you will be able to access and review through the following lines and the quoted additional articles I developed on Africa in terms of the foreign direct investment flow since 2016.
I conducted and developed the present article as a combination of an analysis along with the inclusion of short insights published by specialized organizations. This form of presentation enabled me to provide you with case studies with my own analysis and those of other analysts. Similarly, these short insights provide an overview of foreign direct investment in Africa while their focus is on their seasonal/annual variations and trends.
Therefore, the present article contains also a selection of my publications that are more recent and current on the investment trends and economic changes in Africa.
As usual, your comments and inquiries or requests for additional information are always welcomed given that we are all responsible for the path that Africa is driven through, and your and our involvement in improving it can start here too.
Case-Study for Foreign Investment in Africa: Nigeria
From a market on Lagos Island, Nigeria, the skyline of the city of Lagos is visible. Among many companies, there is a great deal of nervousness around investing in Nigeria.
Nigeria has overtaken South Africa as Africa’s largest economy. With over 200 million people, it is the largest market in the continent, its population nearly twice the size of Ethiopia (110 million) or Egypt (102 million). Yet among many companies, there is a great deal of nervousness around investing in Nigeria. One business development officer of a large company told me recently: “We’re not in Nigeria; one of our guys heard you can’t go there.”
This kind of second-hand hearsay is a risky way to make proper business decisions. When firms make what we refer to as accidental decisions—those based on media reports or anecdotal evidence—it is hard to effectively quantify and manage risks. Nigeria is a challenging place to operate. But ultimately, the nation is too important to ignore.
Investment by the United States in Nigeria is Growing
Foreign direct investment stock from the United States into Nigeria was $5.8 billion in 2017, up 32.8 percent since 2016, according to the U.S. Trade Representative. However, a significant chunk of U.S. FDI in Nigeria and the continent goes into the resources sector.
Chinese construction firms are building road, rail, port, communications, mining, and energy projects funded by loans from The Export-Import Bank of China or state-owned banks, using Chinese machinery, and with Chinese operators often operating the asset after completion.
TOP 10 INVESTMENT DESTINATIONS IN SUB-SAHARAN AFRICA – 2022
1. South Africa 🇿🇦 50%
2. Nigeria 🇳🇬 30%
3. Tanzania 🇹🇿 15%
4. Ghana 🇬🇭 14%
5. Kenya 🇰🇪 14%
6. Mauritius 🇲🇺 14%
7. Zambia 🇿🇲 11%
8. Uganda 🇺🇬 10%
9. Mozambique 🇲🇿 6%
10. Zimbabwe 🇿🇼 6%
In 2022, Tanzania attracted the highest number of trade deals and acquisitions in East Africa.
Some of Africa’s top investment sectors include oil and gas, consumer goods, mining, fintech, industrial and chemicals, technology, renewables, pharma, medical and biotech, retail, e-commerce, and banks.
A recent survey by KPMG International has ranked Tanzania as the third-most preferred investment destination in Africa.
Tanzania was placed behind South Africa and Nigeria in a list of the top 10 countries in sub-Saharan Africa, attracting future investments.
In East Africa, Tanzania is ranked number one, followed by Kenya, and Uganda.
Chinese business development teams visit Africa’s toughest neighborhoods to establish relationships—often long before most American executives have even considered an investment in the country in question. Headlines trumpet Chinese “investment” in Africa, but much of this is lending, rather than equity investment. International experience is helping Chinese firms improve their product quality, service delivery, and technological capabilities every day, making them ever-stronger global competitors.
The key to China’s success on the continent is designing “good enough” equipment for the price their customers will pay. A Chinese-made truck starter will fail after a fraction of the starts a North American truck operator considers normal—but it will also cost a fraction of the price. Likewise, a Chinese-designed smartphone will work on local networks, enjoy long battery life, run the right apps—and come at an affordable price. Despite recent political hiccups, Huawei is the dominant supplier of communications and networking equipment on the continent. Africans benefit from the firm’s low-cost vendor financing, ultra-advanced technology, and turnkey service for modern network installations.
In Nigeria, Demand Exceeds Supply
Nigeria is famous for its power shortages. With only about 5GW of grid power available (on a good day), it’s no surprise that there is an estimated 20GW of captive, backup, and household-level power installed by the private sector.
But this isn’t just a risk. It’s also a business opportunity.
In 2011, Nigeria privatized the power generation and distribution portions of its electricity industry. Performance is well below expectations so far, thanks to gas supply shortages, below-contract tariffs, and poor cash collection. The opportunity? Most manufacturers run their captive power plants—and they’re investing in advanced gas-fired turbines, high-efficiency production equipment, and renewable energy capacity. Households need prepaid electric meters, energy-efficient appliances, and more cost-effective standby generators.
The continent is becoming a big beneficiary of China’s large-scale investment in renewables—which are now vastly cheaper than they were just a decade ago. In Nigeria, solar, wind, and mini-hydro are rapidly filling in the gaps where grid power is unavailable. Local micro- or mini-grids can deliver power to light homes, charge phones, refrigerate medicines, preserve harvested produce, and bring the internet to schools.
In Nigeria, as elsewhere in Africa, the financial services sector is transforming. Mobile money accounts are increasingly popular, led by M-PESA in Kenya. Mobile money has boosted economic activity and brought millions into the financial services sector.
African financial technology entrepreneurs are testing innovative and potentially disruptive services. Where regulations allow, entrepreneurs and mobile operators are introduce low-cost mobile payment, investment, insurance, savings, loans, and cross-border money transfer services using the latest technology.
The most-read piece of 2019 on BRINK was this one on Nigeria and its growing economy. – December 29, 2019, by Melissa Cook – Founder and Managing Director of African Sunrise Partners LLC
The latest general elections have set the stage for Kenya’s next development chapter. The country has made significant political and economic reforms that have contributed to sustained economic growth, social development, and political stability gains over the past decade. However, its key development challenges still include poverty, inequality, youth unemployment, transparency and accountability, climate change, continued weak private sector investment, and the vulnerability of the economy to internal and external shocks
Sub-Saharan African economies are still recovering from the slowdown in 2015-16, but growth is slower than expected, according to the October 2018 issue of Africa’s Pulse, the bi-annual analysis of the state of African economies by the World Bank. The average growth rate in the region is estimated at 2.7 percent in 2018, which represents a slight increase from 2.3 percent in 2017.
Slow growth is partially a reflection of a less favorable external environment for the region. Global trade and industrial activity lost momentum, as metals and agricultural prices fell due to concerns about trade tariffs and weakening demand prospects. While oil prices are likely to be on an upward trend into 2019, metals prices may remain subdued amid muted demand, particularly in China. Financial market pressures intensified in some emerging markets and concern about their dollar-denominated debt has risen amid a stronger US dollar.
The slower pace of the recovery in Sub-Saharan Africa (0.4 percentage points lower than the April forecast) is explained by the sluggish expansion in the region’s three largest economies, Nigeria, Angola, and South Africa. Lower oil production in Angola and Nigeria offset higher oil prices, and in South Africa, weak household consumption growth was compounded by a contraction in agriculture.
Growth in the region – excluding Angola, Nigeria, and South Africa – was steady. Several oil exporters in Central Africa were helped by higher oil prices and an increase in oil production. Economic activity remained solid in the fast-growing non-resource-rich countries, such as Côte d’Ivoire, Kenya, and Rwanda, supported by agricultural production and services on the production side, and household consumption and public investment on the demand side.
Public debt remained high and continues to rise in some countries. Vulnerability to weaker currencies and rising interest rates associated with the changing composition of debt may put the region’s public debt sustainability further at risk. Other domestic risks include fiscal slippage, conflicts, and weather shocks. Consequently, policies and reforms are needed that can strengthen resilience to risks and raise medium-term potential growth.
Africa 2016: Study on the attractiveness of African countries in terms of foreign investment, 2016-2020
The study indicates that the five most attractive African countries for international investors are Ethiopia, Nigeria, Morocco, Ghana, and Senegal.
Ethiopia comes at the top of this top 5, favored by 52% of investors surveyed, Nigeria ranks in 2nd position with 44% of respondents. Morocco occupies third place with 23% while Ghana is in fourth place with 21% of respondents’ intentions. Senegal is 5th with 19% of the votes in this poll.
Financing African growth by 2020: perception of international investors
Despite the slowdown in African economies due to the fall in oil and raw materials, the optimism displayed by these donors, foreign to the continent, can be explained by the improvement in the business climate, the structuring of free zone exchanges, the development of inter-African trade relations, demographic dynamism and the emergence of the middle classes, underlines the study.
Ethiopia owes its place to average annual growth that exceeds 8% and massive investments in infrastructure, while Nigeria is gaining the confidence of investors for the enormous challenge of diversifying the economy that awaits it; Morocco for an economy driven by an export-oriented manufacturing industry and the multiplication of free trade agreements.
If Ghana’s political stability and major regional road and port projects have not left investors indifferent, in Senegal, it is rather the favorable effects of the gradual transformation of its economy thanks to the development of the financial and telecommunications sectors. and new technologies, and the diversification of the economy which are highlighted.
This study was carried out among 55 international investors operating in Africa, including Bank of America, BNP Paribas, Edmond de Rothschild, Proparco, Qatar National Bank, Rothschild & Cie, Standard Bank, Goldman Sachs, HSBC, Merril Lynch, Attijariwafa Bank.
Source: “ Financing African growth by 2020: perception of international investors ” by Havas Horizons firm and Choiseul Institute, study on the attractiveness of African countries in terms of foreign investment, 2016-2020.
Foreign Direct Investment in Africa 2016
Investment from the Asia-Pacific region in Africa hit an all-time high in 2016, accounting for more than a fifth of foreign direct investment (FDI) projects and more than half of capital investment, reveals the study on the attractiveness of Africa, made public at the beginning of this month by the audit firm Ernst & Young. Last year, China and Japan competed with Western Europe and the United States to strengthen their influence on the African continent.
With 13.5% of FDI projects on the continent, the United States continues to be the leading investor in Africa in terms of number of projects. In 2016, American companies financed 91 projects, down 5.2%, creating 11,430 jobs. South Africa (28 projects) followed by Morocco (14 projects), Egypt (13 projects) and Kenya (11 projects) continues to be the preferred target of American donors. By sector, almost 25% of US FDI was invested in Technology, media, and telecommunications, down 11.5% compared to 2015.
Unlike the United Kingdom, which saw its share of FDI projects decrease by almost 47% in 2016, France progressed in the ranking, becoming the second largest investor in terms of number of projects. France invested in 81 projects in 2016, up 39.7% compared to 2015, with capitalization valued at $2.1 billion and 8,087 new jobs created.
The study highlights that Brexit, which took place at the end of June 2016, and the resulting uncertainty, appeared to have had an immediate impact on British investment in Africa.
Morocco remains the favorite destination for French investments, attracting 27.2% of FDI projects, followed by South Africa (12.4%), Ivory Coast (12.4%) and Tunisia ( 8.6%).
1. South Africa (139 projects) 2. Morocco (81 projects) 3. Egypt (79 projects) 4. Nigeria (51 projects) 5. Kenya (40 projects) 6. Ivory Coast (34 projects) 7. Ghana (28 projects) 8. Tanzania (22 projects)
Weak oil prices and harmful ongoing macroeconomic effects from the commodity bust saw flows contract in major host African economies.
“The beginnings of a commodity price recovery, as well as advances in inter-regional cooperation through the signing of the African Continental Free Trade Area agreement, could encourage stronger FDI flows to Africa in 2018, provided the global policy environment remains supportive,” UNCTAD Director, Division on Investment and Enterprise, James Zhan said.
FDI flows to North Africa were down 4% to $13 billion. Investment in Egypt was down, but the country continued to be the largest recipient in Africa. FDI in Morocco was up 23% to $2.7 billion, including as a result of sizeable investments in the automotive sector.
Lingering effects from the commodity bust weighed on FDI in sub-Saharan Africa, with inflows declining by 28%, to $28.5 billion. FDI flows to Central Africa decreased by 22% to $5.7 billion. FDI to West Africa fell by 11% to $11.3 billion, due to Nigeria’s economy remaining depressed. FDI to Nigeria fell 21% to $3.5 billion.
East Africa, the fastest-growing region in Africa, received $7.6 billion in FDI in 2017, a 3% decline from 2016. Ethiopia absorbed nearly half of this amount, with $3.6 billion (down 10%), and is now the second largest recipient of FDI in Africa. Kenya saw FDI increase to $672 million, up 71%, due to strong domestic demand and inflows in information and communication technology sectors.
In Southern Africa, FDI declined by 66% to $3.8 billion. FDI to South Africa fell 41% to $1.3 billion, due to an underperforming commodity sector and political uncertainty. FDI into Angola turned negative once again (down to -$2.3 billion from $4.1 billion in 2016) as foreign affiliates in the country transferred funds abroad through intra-company loans. In contrast, FDI in Zambia increased, supported by more investment in copper.
Multinational enterprises (MNEs) from developed economies (such as the United States, United Kingdom, and France) still hold the most extensive FDI stock in Africa. At the same time, developing-economy investors from China and South Africa, followed by Singapore, India, and Hong Kong (China), are among the top 10 investors in Africa.
FDI outflows from Africa increased by 8% to $12.1 billion, reflecting a significant increase in outward FDI by South African firms (up 64% to $7.4 billion) and Moroccan firms (up 66% to $960 million). Outward FDI by Nigerian firms, in contrast, remained flat at $1.3 billion, focused almost exclusively on Africa.
FDI inflows to Africa are forecast to increase by about 20% in 2018 to $50 billion. The projection is underpinned by the expectations of a continued modest recovery in commodity prices and strengthened inter-regional economic cooperation. Yet Africa’s commodity dependence will cause FDI to remain cyclical.
Source: UNCTAD, World Investment Report 2018. Note: Numbers presented in this figure are based on the FDI stock data of partner countries.
UNCTAD/PRESS/PR/2018/018 – Geneva, Switzerland, (06 June 2018)
Africa 2017: Foreign Direct Investment in decline
June 8, 2018 / 1:29 p.m.
Foreign direct investment (FDI) flows to Africa stood at $41.5 billion in 2017, representing a decline of 21% compared to 2016, according to the 2018 edition of the Conference Report on Trade and Development (UNCTAD) on Investment in the World.
This decline is mainly explained by the weakness of oil prices and the negative consequences of the poor performance of the raw materials sector on the macroeconomic level.
The drop in FDI is more marked in the sub-regions of the continent where the economies are dependent on raw materials: Southern Africa (-66%), Central Africa (-22%), and West Africa (-11%). %), North Africa (-4%), East Africa (-3%). Ethiopia, a leading destination for outsourcing in the textile, leather, and footwear sector thanks to wages ten times lower than those in China, attracted $3.6 billion, or around half of the flow of FDI to East Africa.
In Kenya, FDI amounted to $672 million, an increase of 71%, due to strong domestic demand and investments in the information and communication technology sectors. Morocco attracted 2.7 billion dollars (+23% compared to 2016), thanks in particular to the multiplication of establishments in the automotive industry sector.
FDI recorded on the continent during the past year remains mainly driven by multinational firms from developed economies such as the United States, the United Kingdom, and France. The UNCTAD report, however, highlights that investors from several developing economies, including China, South Africa, Singapore, India, and Hong Kong (China), are among the top 10 investors in Africa.
Another notable fact: the amount of African investments on the continent increased by 8%, to reach 12.1 billion dollars, thanks in particular to the aggressive expansion strategies of South African and Moroccan companies.
For 2018, FDI flows to Africa are expected to increase by around 20% to reach $50 billion, driven in part by expectations of a modest recovery in commodity prices and strengthened interregional economic cooperation that the signing of the Continental Free Trade Agreement will favor.
Said Cherkaoui 24 