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Mohammed Premier University

Fac
ulty of Economic and Social Legal Sciences –
Oujda
MASTER ECONOMY, FINANCE
AND DEVELOPMENT

Realized by :
ELALOUA Oumayma
Haytham
The
CHOURTI Kaouthar dynamic of investments of Moroccan
corporation on the African continent and the stakes
of development.

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Abreviations list :

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SUMMARY :

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 INTRODUCTION

Investments are likely to foster economic growth and promote job creation. The
mechanisms that are favored by different growth models may not be the same, but what is
always emphasized is the importance of investments.

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Chapter 1: General framework of
Moroccan foreign investment

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 1. History and definition of foreign investment:

Since its independence, the Kingdom of Morocco has made the choice for political
pluralism and economic liberalism, by devoting the right of ownership and freedom of
enterprise among the fundamental rights guaranteed by the Constitution.
Since the early 1980s, Morocco has adopted a policy of economic and financial
openness aimed at strengthening the liberalization of foreign trade, a greater
integration of the Moroccan economy in the world economy, and the contribution to
the consolidation of the multilateral trading system.
At this level, the correlative establishment of procedures for the deregulation
of foreign direct investments (FDI) and innovations in the field of information and
communication technologies (ICT) have caused a spectacular surge in FDI flows
around the world.
Practically, the Moroccan economy is an economy characterized by a great openness
towards the outside world, aiming the consolidation of the private sector.
Morocco enjoys political stability, a geographically strategic location, and robust
infrastructure, which have contributed to its emergence as a regional manufacturing
and export base for international companies.  Morocco actively encourages and
facilitates foreign investment, particularly in export sectors like manufacturing –
through dynamic macro-economic policies, trade liberalization, investment incentives,
and structural reforms.  Morocco’s overarching economic development plan seeks to
transform the country into a regional business hub by leveraging its unique status as a
multilingual, cosmopolitan nation situated at the tri-regional focal point of Sub-
Saharan Africa, the Middle East, and Europe. 
Actually, the Moroccan economy is characterized by its opening on the exterior
world. As a matter of fact, several agreements of Partnership or free trade were
signed.
The Government of Morocco implements strategies aimed at boosting employment,
attracting foreign investment, and raising performance and output in key revenue-
earning sectors, such as the automotive and aerospace industries. 
Following the clause 155 of  foreign investment in Morocco, which means any
transaction that constitutes a financial or a real asset in Morocco by legal foreign
persons, natural foreign persons that are resident or non-resident as well as natural
persons with Moroccan nationalities that live in Morocco.

Morocco has simplified the procedures for foreign trade, reduced protection tariffs,
eliminates non-tariff measures, improved the business and investment climate, expand
and diversify of economic and trade relations and finally, consolidates its contribution
to the multilateral trading system.
This openness is a result  of the signing of various free trade agreements with the
main economic partners, particularly the European Union, the United States, the Arab
and African countries. In addition, a set of legal texts have been promulgated or
amended to accompany these reforms.
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As a result, foreign direct investment is defined as the creation abroad of a unit with a
legal autonomy or a branch ; Also we can define  it as the acquisition of a significant
proportion of the capital giving the resident investor a right of scrutiny in the
management of the foreign company invested. 
Foreign investment in Morocco can take the following forms:

  The Establishment of compagnies;

 Participating in the capital increase of a company;
 The establishment of a branch or a representation office;
 The acquisition of financial instruments;
 Supply the current account of partners in cash or trade receivables;
 Granting of loans;
 Acquisition of real estate or rights of use regarding these properties;
 The fulfillment of construction activities and / or real estate development;

 Term deposits to a bank.

Foreign investments are typically defined as either direct or indirect. Foreign direct
investments are when investors purchase a physical asset such as a plant, factory, or
machinery in a foreign country. In contrast, foreign indirect investments are when
investors buy stakes in foreign companies that trade on their respective stock
exchanges.

Generally speaking, direct foreign investments are favored by the foreign

country over indirect foreign investments because the assets they purchase are
considered long-term. Therefore, they help boost the foreign country’s economy
over time.

Alternatively, indirect foreign investments are typically shorter-term

investments that aren’t always used for the growth and development of another
country’s economy over time.

At this level, foreign investment in the form of loans or equity is an important

source of capital for growth in developing countries. Equity investments can be
either indirect (portfolio) or direct, known as foreign direct investment (FDI).
FDI does much more than provide developing countries with financing for their
growth. It brings them new technologies, management techniques, and market
access as well. FDI may be stimulated by exploitation of proprietary technology
or natural resources or by access to markets.

2. Benefits and advantages of foreign direct:

Foreign direct investment (FDI) is made when a business takes controlling ownership
in a company, sector, individual, or entity in another country. Through FDI, foreign
companies are directly involved with day-to-day tasks from the other country,
resulting in a transfer of money, knowledge, skills, and technology.

 Economic development stimulation :

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FDI can stimulate a target country’s economic development and create a more
conducive environment for companies, the investor, and stimulate the local
community and economy.
 Easy international trade:
Countries usually have their own import tariffs, which makes trading rather difficult.
Many economic sectors usually require presence in the international makerts to ensure
sales and goals are met. FDI makes all of these international trade aspects a lot easier.

 Employment and economic boost:

FDI creates new jobs and more opportunities as investors build new companies in
foreign countries. This can lead to an increase in income and mor purchasing power to
locals, which in turn leads to an overall boost in targetted economies.

 Tax incentives:

Of course — taxes. Foreign investors receive tax incentives that are very beneficial
regardless of your selected field of business. Everybody loves a tax write-off.

 Development of resources:
The development of human capital resources is a big advantage of FDI. The skills
gained by the workforce through training increase the overall education and human
capital within a country. Countries with FDI are benefiting by developing their human
resources all while maintaining ownership.

 Resource transfer:
Foreign direct investment allows for resource transfers and the exchanges of
knowledge, technologies, and skills.

 Reduced costs:
Foreign direct investment can reduce the disparity between revenues and costs. With
such, countries will be able to make sure that production costs will be the same and
can be sold easier.

 Increased productivity:
The facilities and equipment provided by foreign investors can increase a workforce’s
productivity in the target country.

3. Reasons and objectives of foreign investment 

Africa has become an important growth hub and an attractive destination for FDI over
the past two decades. Also is, in fact, second in terms of rapid growth after South East
Asia. 

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In the last decade Morocco has turned towards Africa, launching a number of business
and diplomatic initiatives that have developed trade and created much-needed
employment for its population.
While African countries are highly diverse, overall, African economic growth is
supported by some improvement in economic fundamentals and resilience to crises in
several African countries. This dynamic trend is mainly due to the recovery of the
global economy and domestic demand in African countries. Although natural
resources and raw materials are still major factors in Africa's growth, their importance
has declined significantly as endogenous factors, including consumer demand, now
play a more important role. 
In fact, growth has been driven in recent years, particularly by private consumption, in
relation to the expansion of the middle class and demographic strength; and by
investments mainly driven by the improvement of the business environment in several
countries and the dynamics of public spending (mainly infrastructure and wages).
 The negative contribution of net exports is explained by the sensitivity to commodity
price cycles and the slowness of the process of improving the profile of African
exports.
While Moroccan trade links to Europe are decades old, the capacity of Moroccan
businesses to compete with European firms is limited. However, the fast-growing
economies of West Africa offer big opportunities for Moroccan companies.
West Africa and Morocco’s trade links stretch far back into history, given
geographical proximity and the wide use of the French language.
But it was not until the last decade that Morocco ramped up its Africa investment
strategy, with its monarch, King Mohammed VI, leading the way with a number of
diplomatic and business initiatives. This renewed focus on the continent, along with a
business-friendly regulatory environment and developing transport links, has led
many commentators to describe the country as a “gateway to Africa”.
In order to build a financial hub, the government created Casablanca Finance City
(CFC) with a mandate to tout the country as a regional financial hub and to act as a
bridge between the economies of the north and south. 
A big challenge for the domestic economy is how to make fiscal policy more
equitable, due to gaping discrepancies between potential and actual revenue
collection, says Mzali from Oxford Business Group. 
Over the years Morocco has tried to diversify its economy by investing heavily into
developing all kinds of incentives and mechanisms to attract investment, in order to
help diversify and develop all sectors,” she explains.
As a result the government set up free-trade areas, many of which have tax
exemptions.
However, this has contributed to distortions in the system – less than 1% of
companies pay some 80% of corporation tax. The idea it’s to make the system fairer
to get more people to engage with it. 

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Chapter 2: Analysis of the development of
Moroccan enterprises in Africa.

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Moroccan investments abroad in Africa

Moroccan private investments in Africa are starting to gain momentum, especially

since these markets are fully open to Moroccan firms and Morocco enjoys a positive
image in Africa. However, Moroccan investments in sub-Saharan Africa remain
limited,
Moroccan investments in Africa are directed towards the sectors of banks and
financial organizations, telecommunications, cement works, mines, transport and
housing, through equity investments in local companies and the setting up of
subsidiaries.
1. Investment sectors :

 Financial sector :
As regards banking and financial investments, Attijariwafa bank and BMCE Bank are
the first groups to have conquered the international market, in particular the African
market.
Attijariwafa bank is present in Tunisia, Senegal (purchase of 66.67% of the capital of
the Senegalese bank) and Mali (acquisition of 51% of the shares of the Banque
Internationale du Mali for nearly 60 million euros).
In 2009, the operator strengthened its Presence in sub-Saharan Africa with the
acquisition of 5 Crédit Agricole subsidiaries in Côte d'Ivoire, Senegal, Gabon and
Congo (the acquisition of the French bank's subsidiary in Cameroon is underway
finalization).
On the other hand, Attijariwafa bank organized on April 29 and 30, 2010 in
Casablanca the first edition of the Africa Development Forum “African Davos”.
BMCE Bank, was the first Moroccan bank to invest abroad, is present in ten African
countries, In 2007, BMCE acquired a 35% stake in the capital of Bank of Africa, the
3rd largest banking group in the Economic and Monetary Union in Africa)
 Secteur de Télécommunication :
Telecommunications occupy 25% of total FDI outstanding Moroccans in Africa.,
Maroc Telecom is the majority shareholder of the Mauritanian operator MAURITELl,
holds 51% of the capital of the Burkinabe operator ONATEL.

 Secteur de Holding : 
With a 13.8% share of Moroccan FDI, the holding companies sector occupies the 3rd
position, the case of the Ynna holding group, which has multiple activities in Tunisia,
Ivory Coast and Egypt. This group is expected to invest in other African countries
such as Mali (projects to build a cotton spinning, grinding and cement production
plant),  and Gabon, Burkina…

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The cement industry remains a stimulating sector for Moroccan companies to invest
internationally. In this context, LAFARGE Morocco has made major investments in
Egypt with the Greek group TITAN.
 Mining industry

In the mining and energy sector, ONA, through its mining subsidiary Managem, owns
several mineral deposits in Africa (Guinea, Mali, Burkina Faso and Niger).
 Energy sector :
In the energy sector, ONE won a 25-year electrification project for rural areas in
northern Senegal. The subsidiary signed with the Gabonese government, on May 13,
2010, an operating agreement for the Bakoudou gold mine, which requires an
investment of 32 million dollars.
 Transport sector : 
In terms of transport, Royal Air Morocco has signed a memorandum of
understanding with the Central African Economic and Monetary Community
(CEMAC) on the creation of a sub-regional airline, called Air CEMAC.
This dynamic completes the policy of liberalizing the air transport sector and opening
up the Moroccan skies and reinforces the will of the public authorities to make
Morocco a privileged passage between Africa on the one hand, and Europe, Asia.
and the Middle East, on the other hand.
Infrastructure sector
For the infrastructure sector, the CCGT group has carried out a project in Guinea for
the development of an agricultural perimeter for a budget of 70 million dirhams.
In Senegal, the group won one of the largest public projects in the country, namely,
the construction of a 230 km road.
ONEP won in 2007 the international call for tenders for the management by leasing
of the Cameroon National Water Company (SNEC).

2. Diversification of Moroccan investments in Africa

geographical and sectors

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 3. Practical case :

Illustrative case of : Maroc Telecom

 PRESENTATION OF MAROC TELECOM :
Maroc Telecom or IAM is the leading telecommunications company in Morocco. 
Privatized by the Kingdom of Morocco from 2001, it is a global telecommunications
operator in Morocco, leader in all of its business segments, Fixed, Mobile and
Internet. 
Maroc Telecom has been listed simultaneously in Casablanca, Paris since December
2004, its reference shareholders are the Vivendi group (53%), and the Kingdom of
Morocco (30%).
 FIRST QUARTER 2010 CONSOLIDATED RESULTS :
 4.3% increase in turnover to 7.4 billion dirhams.
 Growth of the Group's customer base by 14% in one year to 22.4 million.

 REVIEW OF GROUP ACTIVITIES : 2010 

MOROCCO :  The activities in Morocco generated during the first three months of
the financial year, a net turnover of 6,095 million dirhams and an operating profit of
2,898 million dirhams, compared to 2009 with the efforts made on marketing and
communication.
In Morocco, the gross turnover of the 1st quarter of 2010 of the Mobile activity
recorded a growth of 3.6% to 4,537 million dirhams As of March 31, 2010, the
Mobile fleet stood at 15.578 million, up 6.5% compared to the end of March 2009. 
The Fixed-line and Internet activities in Morocco achieved during the 1st quarter of
2010 a gross turnover of 2,193 million dirhams, As of March 31, 2010, the ADSL
fleet reached 474,000 lines, up 1% compared to the end of 2009 
MAURITANIE : During the 1st quarter of 2010, all activities in Mauritania
generated a net turnover of 282 million dirhams, an increase of 3.3%. Thanks to the
good performance of Mobile activities.  Mauritel's operating income for the 1st
quarter 2010 stood at 85 million dirhams, at the end of March 2010, the customer base
stood at 1473 million for Mobile, 43,000 for Fixed and nearly 7000 for Internet.
BURKINA FASO: During the 1st quarter of 2010, all activities in Burkina Faso
generated turnover of 461 million dirhams, up from 13.2% and an operating result of
nearly 168 million dirhams, thanks to the very good performance of both Mobile
activities. At the end of March 2010, the parks of the Onatel group were established at
1.812 million for Mobile, 153,000 for Landline and 24,000 for Internet.

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Attijari wafabank :

Is a Moroccan banking and financial group the 4th on the African continent and leader
in Morocco, It has 7million customers and 17,000 employees in more than 23
countries. it is the first network in Africa with 3,534 branches in 2015.
In addition to the banking activity, the group operates through subsidiaries
specializing in all financial fields: insurance, mortgage, consumer credit, leasing, and
asset management.
Attijariwafa bank is based in Morocco and operates in 13 countries in Africa:
 NORTH AFRICA :
Morocco: Attijariwafa bank
Tunisia: Attijari bank
Mauritania: Attijari bank
Egypt: Attijariwafa bank Egypt
 WEST AFRICA : 
Senegal: CBAO group - Attijariwafa bank - Senegal Credit (CDS)
Niger:  CBAO group - Attijariwafa bank
Ivory Coast: Ivorian Bank Company
Burkina Faso: CBAO group - Attijariwafa bank
Mali: International Bank for Mali (BIM S.A)
 CENTRAL AFRICA :
 Cameroon: Commercial Bank Company

Gabon: Gabonese Bank Union

Congo: Congo Credit

GENERAL PRESENTATION: NORTH AFRICA 

 
 MOROCCO :
Group transactional banking: 
Supports economic players in their financial operations in
Morocco and internationally.
Group Corporate and Investment Banking:
The partner of Large Businesses and the essential financier of
major projects both in Morocco and in sub-Saharan Africa.
Retail Banking Businesses:

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An African platform that generates business between companies, investors and
support structures.

- 4930 AGENCIES
- 1400 AUTOMATIC WINDOWS 

 TUNISIA : 

Investment financing
E-banking solutions: 
For fast and secure transaction processing: Attijari Real Time, Attijari Cash
Management, Attijari Online Trade.
Specialized subsidiaries operating in all areas of finance: leasing, asset management,
stock market intermediation, venture capital, life insurance and advice.

 207 AGENCIES
 883,829 CLIENTS

 MAURITANIA
Flow management:
 Transfers, electronic payment (visa, GIMTEL, TPE…)
Remote payments: 
Web Banking - SMS Banking - (SUIMOI & AVIZO).
Islamic finance products: 
Murabaha.

 MALI :

Financing of operating:
Campaign credit, market financing, commitments by signature
Financing of the company's investments:
Medium term credit, long term credit, leasing.
International trade finance

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Conclusion

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