Investment Opportunities and Offer of
Morocco1st Japan-Africa Business Forum
Wednesday 11th July, 2014
Tokyo

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Morocco Overview

Capital

Rabat

GDP

Institutional System

Democratic and social Constitutional
Monarchy

GDP per capita

Area

710 850 km²

N° of inhabitants

32.5 million

Time Zone

GMT (GMT+1 in summer)

Languages

Arabic and Amazigh (official)
French, Spanish, English

2

Source: Haut Commissariat au Plan et Office des Changes

835 Billion MAD (2013)
US$ 100 Billion
25 681 MAD/ inhabitant (2013)
US$ 3 500

Average growth

4.9% (over the last 5 years)

GDP Distribution(2012)

Primary Sector

12.7%

Secondary Sector

28.1%
59.2%

Inflation Rate

Tertiary Sector
1.9% (2013)

Promising relations between Morocco and Japan

Promotion andinvestment protection
agreement

Triangular cooperation
between Morocco, Japanand Africa~ 60 years of Road maintenance Drinking water Merchant navy Health Fisheries Port management
 Electricity

3

dimplomatic
relations
between
Morocco andJapan+
Double taxationagreement agreement

To be signed by this year

Japanese investments in Morocco
35

Japanese
Comapnies in
6 different
cities in
Morocco+ 27 000

employees

1stCountryemployer in
Morocco4

Sectorsof investment

Automotive
Trading
Agri-business
EnergyMain japanese companies
present in Morocco

Contents
I

Morocco: An attractive country for investors

II

Morocco’s value propositionIII

Key sectors of investment

IV

Moroccan- African vision5

A Stable Political Environment
A continuing drive for openness and democratisation

 A monarchy established in the year 788 (12 centuries ago)
 The Constitutional Council reviews the constitutionality of all laws
 In July 2011, a referendum established a new Constitution, guaranteeing:• Human rights• The legality of the State and its institutions• Individual and collective liberty

Morocco, most stable country
in North Africa in 2012
According toThe Association
For International Affairs

6• Improved moral standards in public life
• The plurality of the Moroccan identity

Morocco, most pacifist
country in North Africa in2013
According to Global Peace Index 2013

Morocco, most democratic
country in Arab region in 2013
According to the Egyptian center
Ibn Khaldoun

Strong Macroeconomic Drivers
GDP Growth(average 2001-2013)

Inflation(average2001-2013)

FDI Growth*(average 2011-2013)

Unemployment rate
(End 2013)

4,8%
1,8%
40%
9,5%

#2

African Country of the
future 2013-2014

in Africa

S&P affirms Morocco's rating
BBB-/A-3 with a stable perspective
May 2014

Fitch Ratings maintains
Investment Grade2012-2013

International Monetary FundMay 2014

Besides being a model of stability,
Morocco ensures highly promisingprospects as a center of economic
influence for the MENA region

7* Flux Net des IDE entrant
Sources: Haut Commissariat au Plan, Office des Changes; Bank Al Maghrib; Banque MondialeEasiness of doing business
More thanNo restrictions
100 protection
to capital forforeignnon-residents
investment
Plus de 50
agreements
conventions deand double
non double
taxation
imposition+pr
otection del’investisseme
nt
Morocco gained 8 positions in global ranking of “Doing Business 2014”Free
repatriation of
profits andcapital for nonresidents

1

2

3

3

Morocco is "the most improved" country in business regulations in 2011(+21 positions)8Morocco: a country open to foreign investors

Over the last decade, Morocco has engaged in a policy which seeks tomake foreign investment as a strategic support for economic andsocial growth and to consolidate the attractiveness of the Kingdom
vis-à-vis foreign investors.

In 2013, Morocco was the first recipient of FDI in North Africa
In terms of FDI restrictiveness, Morocco is ranked amongst

the most open countries in the region, 3rd in Africa*

9 * OECD

Ambitious Sectoral Strategies
INDUSTRY: Performant Ecosystem Strategy 2020

AGRICULTURE: GREEN MOROCCO PLAN 2020

• Industrial GDP to reach 23% of global GDP Launched in 2008
• Creation of 500 000 jobs

Launched in 2014

• Creation of Industrial Development Fund:$2.5 Bn• Allocation of 1 000 hectars of land for
rent

TOURISM: 2020 VISION
Launched in 2010

• 20 million tourists in 2020

LOGISTICS PLAN 2016
Launched in 2010

• Tourism GDP: from US$6 billion in 2010 to
US$17 billion in 2020

Launched in 2009 (Solar) and in 2010 (Wind)

Launched in 200910

• Turnover in export: US$1.5 billion• Generalized access to broadband• Encourage IT use by SMEs
• Development of government e-services• Capacity: 2 000 MW of solar power + 2 000
MW of wind power
Launched in 2012

• To improve the country’s logisticalcompetitiveness• To reduce logistical costs from 20% to 15% ofGDP• An integrated national network of 70 multiflow logistical zones

IT: MAROC NUMERIC• Renewable energy >40% of national
production by 2020

PHARMACEUTICAL PLAN 2020

• US$10 billion in additional GDP fromagriculture• US$15 billion in public and private investments• 200 000 new beds

ENERGY: MOROCCAN SOLAR PLAN 2020

• To modernise the agricultural sector

CHEMICAL PLAN 2020
Launched in 2012

• Turnover: US$18 billion• Direct job creation: 12 500• GDP contribution: US$ 5.5 billion• Indirect job creation: 45 000• Job creation: 43 000

Modern Infrastructure

Airports• 16 international airports• Casablanca is #1 Europe-Africa hub

Tramways• Rabat and Casablanca• €1 billion

Ports:• Morocco has two coastlines(Mediterranean and Atlantic)• More than 95% of trade in Morocco
go through the seaway.
• Morocco has 38 ports of which 18
are devoted to foreign trade.

Tangier Med port:• Ideal port platform to serve
Europe and West African countries

Highways• 2015: it connects all the big cities of
Morocco (approximately 1800Km of
highways)

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Railway Network• First high-speed train in Africa(Tangier-Casablanca) in
December 2015 –€1.8 billion

22 Integrated Industrial Parks (P2Is)« Plug & Play »TANGER FREE ZONETANGER AUTOMOTIVE CITYATLANTIC FREE ZONETECHNOPOLISTANGERTETOUANKENITRARABATCASANEARSHORECASABLANCAFES
MEKNESTETOUAN SHOREOUJDA SHORE

BERKANEOUJDA

CLEANTECHFES SHORE

NOUASSEURAEROSPACE CITYMARRAKECH

AGROPOLISAGADIRLAAYOUNEMARRAKECH SHOREDAKHLAOFFSHORING P2I
GENERAL P2I

12AERONAUTICS P2I
AUTOMOBILE P2I

RENEWABLE
ENERGY P2I
AGRICULTURAL
P2I

Contents
I

Morocco: An Attractive Country For Investors

II

Value PropositionIII

Key sectors of investment

IV

Moroccan- African vision13

A Strategic Geographical Location
EUROPEAMERICAS

9 miles

MIDDLE EASTTANGER MED

AFRICA

MOROCCO

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Logistics Hub of international stature

Connections to 120 ports in 56 countries, with 40 services
Index of maritime
connectivity in Morocco

33

77

83

84

23

18

18

19

80

2004 2005 2006 2007 2008 2009 2010 2011 2012

Current capacity of 3.5 million containers (8.5 millions in 2015)
2 container terminals
2.5 million TEUs * in 2013
Ambition: To be included in the World Top 15

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At The Crossroads Of The Continents

7h
10d
NEW YORK

5h

3h
2d

3h

PARIS

3.5h
3d
FRANKFURT

3h
2d

1h
1d

ROME

MADRID

4h
5d
ACCRA

3h
4d
DAKAR

10h
25d
SAO PAULO

Flight duration
Sea/land route

16 Sources: Royal Air Maroc; COMANAV

4h
4d

CAIRO

Morocco: an unparalleled connection between Europe, theMiddle East, and Africa
Number of international
passengers:
Steadily growing

Direct connections to 33
European cities

Direct connections to 36 cities
in Africa and the Middle East

In millions

8.5

10.1

11.5

12

13.5

15.1 15.1

16.5

2006 2007 2008 2009 2010 2011 2012 2013

Mohammed V Airport in Casablanca: best airport in North Africa in 2012
According to the International Association of Airports

17 Sources: Office National des Aéroports & Royal Air MarocUnique Set Of Free Trade Agreements
Agreement under negotiations
with Canada
Association Agreement with European Union(1996)

Located just 14 km
from Europe

Agreement with United States ofAmerica (2005)

Agreement with Turkey (2003)

Agadir Agreement (2004)
United Arab Emirates Agreement(2003)
Arab League Agreement (1998)
Agreement under negotiations with the
Economic Community of West African
States (ECOWAS & CEMAC)

Since 2008, Morocco enjoys an Advanced Status with the EU.
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Competitive Costs

Competitive salary (average)

Exports costs*

US$ per month

Total Tax Burden**

US$ per container

1268

3662

1292
59.0%

2646

1044
293

380

488

598

Morocco

China

65.0%

Tunisia

China

France1186

512

Tunisia

Spain*Associated costs with all procedures
required to export goods

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64.0%

49.6%

750
576

62.0%

Source: World Bank 2012; Caisse Nationale de Sécurité Sociale; Doing BusinessFranceMoroccoSpain** Amount of taxes and mandatory
contributions by the company during thesecond year of activity, expressed in % ofcommercial profits

A young and qualified workforce
A young and educated population• 64% of Moroccans are aged under 34 years• 6 million young people (between 18 and 35 years old)
• An active population of 12 million• 175 000 university students• Training of 15 000 engineering graduates per year for 2015 and 25 000
for 2020• Over 100 public universities and schools• Over 200 private universities

A youth open to the world• 16 million internet users & 4,4 million Facebook users• ~10 millions of french speakers & ~6 millions of spanish speakers• Steady growth of English (Morocco ranked 45th worldwide and 2nd in North Africa, interms of English mastering *)• Strong cultural and linguistic affinity with Europe, Middle East and Africa.

20 Sources: Arab Social Media Report, Dubai School of Government; Haut Commissariat au Plan, Ministère de l’Enseignement Supérieur, Agence Nationale de Réglementation des Télécommunications* World index of english level, by « Education First » organization

An Attractive Incentive Package
Conventional Regime

Investment Promotion
Funds(IPFs)or Eligibility Conditions:• Investment ≥ US$ 24 million• Jobs created ≥ 250• Transfert of technoloy• Implementation in a priority area
• Protection of environment
 Land Assistance: A contribution up to
20% of acquisition costs
 External Infrastructures: assistanceof up to 5% of total amount ofinvestment programme Training: A contribution of up to 20%
of training costs.

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Hassan II Fund

 Eligibility Conditions:• Total investment ≥ US$ 1.2
million• Investment in goods andequipment ≥ US$ 0.6 million• Sectors: Automobile,aeronautics, nanotechnology,
microelectronics, andbiotechnology.
 Contributions are limited to a
maximum of 15% of the total
investment and US$ 3.7 million as
the following:• Land Assistance: 30% of costsof land acquisition anddevelopment.
• Equipment: 15% of costs of
new equipment (excluding
taxes and import duties).

Free zone regime
 Eligibility Conditions• 70% of sales to beachieved abroad Unlimited exemption from
customs duties
 Simplified customs procedures Corporate tax = 0% for 5 years and8.75% for 20 years
 Income tax = 0% for 5 years, then
80% tax reduction for 20 years
 Business tax exemption for 15
years Value Tax Added : unlimited
exemption for goods deliveredand services
 Registration fees: exemption acts
of incorporation and capitalincreaseContents
I

Morocco: An Attractive Country For Investors

II

Value PropositionIII

Key sectors of investment

IV

Moroccan- African vision

22

Finance: Casablanca Finance City (CFC)
A single entry point to north, west and central Africa(“greater north west africa” (GNWA))
What is CFC?


An international financial hub for GNWA

A comprehensive and sustainable ecosystemA specific status including an attractive tax framework

Advantages?
 Total exemption from corporate tax for companies during the first 5 years of operation and 8.75% thereafter.
For regional and international office: Taxed at a reduced rate of 10% (corporate tax)
 Specific taxation rate of 20% for wage income (income tax) Exemption acts of incorporation and capital increase

Why choosing CFC?
 Opportunity to belong to one single investment region with critical mass
 Proximity to clients, assets and information
 Benefit from high-standard financial services
 Attractive cost base23

Consumer Goods and Retail
A promising and old-fashioned sector in which Morocco has
developed the necessary know-how
Opportunities:
 Retail contributes to 11% of GDP and employs about 1.2 million people/12.8% of the labor force in Morocco Internet retailing became a fully-fledged retailing channel in the country starting 2012 Morocco is positioning itself as a platform for shopping
 Implementation of 600 supermarkets and hypermarkets by 2020
 8% annual growth

Sector highlights:
 Domestic companies remained the leaders in retailing in Morocco during 2012-2013 in terms of value sales
 Construction of the most significant retail park in Morocco- the Zenata eco city in Casablanca, the first of its kind in
Africa.

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Automotive
Over the last years, Morocco has built a dynamic
Automotive ecosystem
Opportunities:
Morocco's Automotive cluster offers opportunity to serve 4 main strategic Automotive markets for OEM
EU : 14M vehicles p.a.
North Africa and Middle East : 2.6M in 2012 – 3.7M by 2020
West Africa : 150k in 2012 – 210k by 2020... and potentially NAFTA, given Free-Trade Agreements and logistics (5 days of shipping to USA)... as well as for OES
Serve European OEM and OES thanks to localization : 1 day to Spain, 2 days to France, 3 days to Germany/ Italy
Serve Moroccan OEM and OES looking for local sourcing
Serve MENA and West-African automotive aftermarket... and potentially serve NAFTA market (OEM, OES and IAM)

Sector highlights:

Renault developed a major production center in the north area of MoroccoRenault's Mega plant will boost local production to reach about ~500 000 units by 201525

Aerospace
Over the past 10 years, Morocco has emerged as asignificant industrial platform for the Aerospace industry
Opportunities:
The Moroccan aerospace platform is now entering a second phase of its development through a unique value proposition:Well trained Human ResourcesHigh productivity and quality standardsCompetitive costs

Dedicated and upscale TechnoparkAttractive set of Government incentives

Stable country, both politically and economically

Sector highlights:Bombardier's assembly unit: $200 M investment, 850 direct and 4000 indirect employees by 2020



$1 Bn export sales, 10 000 employees and ~106 companies in 2013

A network of ~90 Suppliers operating in critical parts of the value chain

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Electronics
Due to its high skilled manpower and proximity to
the EU, Morocco is positioned as a leading
destination for electronics
Opportunities:
 220M€ of additional GDP between 2009 and 2015
 Potential 9,000 jobs by 2015 (200 winners in management, 1,400 engineers, 2,700 technicians and 4,700 operators)
 Market growth of specialty electronics maintained since 2004 (+7%)
 The existence of a new type of subcontractors more integrated
 Development of more and more products with high added value

Sector highlights:
The Electronics sector includes two branches: General public Electronics (upstream electronic equipment, white goods, brown goods, etc)
 Specialty/integrated Electronics

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Contents
I

Morocco: An Attractive Country For Investors

II

Value PropositionIII

Key sectors of investment

IV

Moroccan- African vision28

African economic potentialities• By 2050, Africa's economy would beclose to 10 times bigger than it is today.
• Six of the world’s ten fastest-growing
economies in the world over the last
decade were in Africa. It is expected to
be seven by 2020.
• The economy in the Sahel region is
growing by more than 5% annually.
• There is a rise of a consumer society,which increases demand, boosts local
production and amplifies middle class.
 In 2014, 106 million Africans should have anannual income of over $ 5,000*

The true size of Africa embraces China, the US, India, Eastern Europe and themost important Western European countries
29 * Bloomberg

Africa’s attractiveness

8th

8th

5th

2nd

2011

2012

2013

2014

Africa’s relative attractiveness is on the rise: a way above Asia andWestern Europe and slightly behind North America*
Africa’s attractiveness rises significantly when investors get establishedin the African market*

30*: EY’s Africa’s attractiveness ReportToday, major international companies quest for the"African opportunity"
Telco

Consumer
Goods

Electronics

Consumer
Goods

Electronics

Automotive

Facility in# African
countries
invested

16

13

Commercial
representationin everycountry

1 South Africa
21

6

3%

3%

Commercial
representationin everycountry

12%9%% Africa
Sales onTotal Sales

7%

African countries combined represent a GDP of 3.1T$,comparable to GDP of India (3.3T$) or Russia (2.2T)

Source : World bank statistics, Company websites

3%Tomorrow, African challengers will invest even morein the continent
40 fast-growing "African Challengers" with global aspirations
Algeria - 2

Tunisia – 2

Sonatrach
CevitalGroupe ElloumiGroupe Poulina

Egypt – 7
Orascom Telecom
Orascom Construction Industries
Egyptair Holdings
Al Ezz GroupEl Sewedy Cables
EFG Hermes
CIB

Morocco - 7
Office Cherifien Des Phosphates
Groupe ONA
Saham Group
Maroc Telecom
Royal Air Maroc
Attijariwafa Bank
BMCESouth Africa – 18

Togo - 1
Ecobank

Nigeria – 2
DangoteUnited Bank for Africa

Angola - 2
Sonangol
Banco Africano de Investimentos

Anglo American
Sasol
The Bidvest GroupMTN Group
Shoprite Holdings
Vodacom Group
Imperial Holdings
Barloworld
Steinhoff International
Sappi
Datatec
Sab Miller
Murray & Roberts Holding
Naspers
AltronAspen Pharmacare HoldingStandard Bank GroupOld MutualCompetitive companies
investing heavily in Africa• Out of the 40, 32
companies are already atleast regional players• African challengers stayinside the continent in twothirds of all cross-borderdeals

Need for a coordinated approach to support
investments of African Challengers

65

Moroccan companies, large footstep in Africa
ICT & Media

MiningBanking

Insurance

Construction
and Real Estate

Telecom

Pharmaceutical

Alegria Tunisia
Libya

Mauritania
SenegalGuineaLiberia

Mali
Burkina
Faso

Benin
Ivory Coast
Ghana

Niger
Djibouti
Nigeria
Cameroun

Equatorial Guinea
Gabon

Ethiopia

Central African
Republic

Congo

RDC

UgandaKenya
BurundiTanzania

AngolaMadagascar

Air transportMoroccan geostratergic vision towards Africa

King Mohamed VI meeting Malian President (up)and SenegalianPresident (down)• Morocco, under the vision of its King, is keen tostrengthen its position as an African leader. This is marked
by the various visits of His Majesty to different Africancountries.
• 7% of Morocco’s exports in 2012 were to the markets of
the Sahel-Saharan states, aiming to raise the ratio up to
20% in 2018.
• With its $800 millions of investments, Morocco is thesecond African investor in the continent after South
Africa.
• In a decade, nearly 5,000 bilateral agreements have beensigned and entered into force. 40 joint commissions havebeen established in the same period.
• Morocco is considered as a platform for foreigncompanies to project their activities in sub-Saharan Africa
due to: Deep knowledge of African markets
 Very frequent airline connections
 A strong Moroccan banking sector present in Africa

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Thank you for your attention&
Welcome to the 4th Japan-Arab Forum in Morocco

Ali Zaki, Business Development Associate- Americas & Asia
azaki@invest.gov.ma

www.invest.gov.ma

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