Investment Incentives to Promote Economic Development in Morocco (OBG)

According to the Oxford Business Group (OBG), Morocco’s new investment incentives are expected to boost economic development.

The incentives being referred to include financial reforms, efforts to improve infrastructure and an increasing emphasis on sustainable energy.

While numerous countries in the region experienced decreases in Foreign Direct Investment (FDI) between 2010 and 2015, Morocco saw an increase of 11%, reaching MAD 39 billion (€3.6bn), OBG noted. It added that the Moroccan government is also looking to capitalise on, and attract, additional FDI through a new investment law which was introduced in July.

The new legislation, which replaces a previous law implemented in 1995, creates free zones in each of the country’s 12 regions, recognises indirect exporter status and creates incentives for export-oriented and industrial companies. It also restructures investment promotion activities under the centralised Moroccan Agency for Investment Development and Export, OBG underlined.

Efforts to boost investment have garnered significant interest, OBG experts pointed out. Immediately after the new law was implemented, Morocco signed 30 contracts totaling MAD 7.5 billion (€688.7m) in investments with internationally based countries. UK-based automotive manufacturer Delphi and Canadian manufacturer Linamar are two of the companies involved in these agreements. Other countries involved include Brazil, China, India and Russia. The new investment law complements efforts to enhance the stock exchange and introduce new banking products targeting previously unbanked groups, OBG said in its analysis.

In late June, the government carried out its first privatisation through the capital markets, floating a 40% stake in state-owned port operator Marsa Maroc on the Casablanca Stock Exchange.

The initial public offering, Morocco’s largest in eight years and the only one of the year, was part of a wider effort to modernise the stock exchange and boost liquidity. It was valued at MAD 1.94 billion (€177.9m), of which MAD 600 million (€55m) came from individual investors.

According to OBG, these developments follow the creation of the Moroccan Capital Market Authority (Autorité Marocaine du Marches des Capitaux, AMMC) in February. The new body took over regulation of the stock market from the Securities Ethics Council, which had operated under the Ministry of Economy and Finance.

In the banking sector, the Moroccan authorities announced plans to introduce both Islamic banking and mobile-to-mobile payments to extend banking coverage to the previously unbanked, OBG noted.

The Oxford Business Group is a global publishing, research and consultancy firm, which publishes economic articles on the markets of the Middle East, Africa, Asia, Latin America and the Caribbean.

Source :Morocco World News