Morocco Flexes Economic Muscles As It Seeks AU Reinstatement
Slowly and steadily, Morocco has been establishing itself as a major economic force in sub-Saharan Africa, even as it eyes gaining readmission into the African Union (AU), which it left decades ago.
Last July, King Mohammed VI of Morocco informed African leaders attending the AU summit in Kigali, Rwanda, of his country’s wish to return to the fold, saying, “Morocco should not remain outside its African institutional family, and it should regain its natural, rightful place within the AU.”
Two months later the kingdom formally submitted a request to re-join the continental body, thus starting a process that may lead to its readmission at the next AU summit in Addis Ababa in January 2017.
Morocco left the former Organisation of African Unity (AU’s predecessor) in 1984, to protest the seating of the Polisario Front as representatives of the Sahrawi Arab Democratic Republic (SADR), a former Spanish colony west of the Sahara that Morocco considers part of its territory. SADR disputes Morocco’s position, and 30 years later the dispute remains unresolved.
In explaining Morocco’s current decision to join the AU, the king said, “When a body is sick, it is treated more effectively from the inside than from the outside.”
The kingdom has expanded its economic ties with many countries on the continent, mainly through trade and investments since it left the AU. It now seeks to return to the fold, boost these ties and settle the unresolved Western Sahara matter.
“We are Arabs, but we are also Berbers and Maghrebi,” Brahim Fassi Fihri, the president and founder of Institut Amadeus, a Morocco-based think tank, told Africa Renewal.
He was referring to the multicultural identity of his country, which is made up of mostly Berber and Maghrebi ethnic groups. He maintains that the decision by Morocco to leave the regional body three decades ago was a “strategic mistake.” Still, “Africa is our natural home,” he said. “We may have left an organization, but we could never have left the continent.”
As a sign of its political solidarity with Africa, Morocco’s national carrier, Royal Air Maroc, maintained its regular schedule to West Africa at the height of the Ebola epidemic two years ago, when all international air carriers, with the exception of Belgium-based SN Brussels, suspended flights to the affected countries of Guinea, Liberia and Sierra Leone over contagion fears.
The decision was based on humanitarian grounds, not commercial—out of brotherly solidarity “reflecting the kingdom's constant commitment to Africa,” the airline’s spokesman told Agence France-presse (AFP) at that time.
The airline has expanded its network across the continent. Over the past decade, it has increased its flights to African destinations from 14 in 2007 to 32 in 2016.
To some extent the story of the national carrier is a telling testament to its expansive economic ambition on the continent.
Over the 10-year period starting in 2004, Morocco’s trade with the rest of the continent grew by an annual average of 13% ($3.7 billion) in 2014, 42% of which was with sub-Saharan Africa. This represented just 6.4% of the kingdom’s overall trade globally during the same period, according to a government report titled Morocco-Africa Relationship: Ambition for a New Frontier.
First investor in West Africa
Yet the most remarkable change was Morocco’s direct investments in the continent. In 2015 it invested $600 million, with neighbouring Mali getting the lion’s share, followed by Côte d’Ivoire, Burkina Faso, Senegal and Gabon, according to the World Investment Report 2016, a publication of the United Nations Conference on Trade and Development (UNCTAD).
Over the decade ending in 2016, Morocco’s investment in sub-Saharan Africa represented 85% of its overall foreign direct investment (FDI) stocks, according to data from the country’s finance ministry and the African Development Bank.
“Moroccans became a more prominent investor on the continent, initiating 13 intra-African investments—its highest in over a decade,” reckoned a 2015 survey report by Ernst & Young, a global financial consultancy firm.
The reason behind the growing interest in sub-Saharan Africa, says Ernst & Young, was that “Moroccan companies are looking towards sub-Saharan Africa as their country becomes a platform for exporting to other African countries.”
Morocco’s investments are mostly concentrated in banking and telecommunications sectors, which in 2013 accounted for 88% of its FDI stocks in sub-Saharan Africa.
The country’s leading bank, the Attijariwafa Bank Group, and part of the kingdom’s holding company Société nationale d’investissement (SNI), with 7.4 million customers and more than 16,000 employees, operates in 10 sub-Saharan African countries: Cameroon, Republic of Congo, Côte d’Ivoire, Gabon, Guinea-Bissau, Mali, Mauritania, Niger, Senegal, and Togo.
The Banque Marocaine du Commerce Extérieur (BMCE) group has a network of 18 country operations, mostly in West, Central and East Africa through Bank of Africa, its subsidiary. Maroc Telecom, the leading national telephone company, operates in 11 African countries, such as Burkina Faso and Mali, under different names, including Moov in francophone West Africa.
Beyond these traditional sectors, Moroccan companies have also ventured into insurance. The Saham Insurance Group, for one, began operations in 10 African countries in 2010, and continues to expand across the continent, most recently with the acquisition in 2015 of Continental Reinsurance Plc of Nigeria.
For many years West African countries and to some extent Central African countries were the preferred destinations of Morocco’s investment in sub-Saharan Africa. In his letter to the AU, the king explained that “the important involvement of Moroccan operators and their strong engagement in the areas of banking, insurance, air transport, telecommunications and housing are such that the kingdom is now the number one investor in West Africa.” He added, “My country is already the second largest investor on the continent and our ambition is to be ranked first.”
Last October the king travelled to East Africa and Ethiopia, as Rwanda and Tanzania prepared to sign business deals. “The Moroccans’ current visit to East Africa marks a serious intent to enter the region and widen their interests in Africa,” The New Times in Rwanda reckoned.
To some observers the reasons behind Morocco’s foray into the continent are purely economic. “Several Moroccan companies are betting their growth on sub-Saharan Africa,” says Mr. Fihri. He told Africa Renewal that Moroccans, just like Americans, Europeans and Asians, are interested in Africa because it is “a continent with huge growth potential.”
In September 2015, Abdelmalek Alaoui, a Moroccan editorialist and political analyst, wrote in La Tribune, a French weekly financial newspaper, “Well ahead of other investors [before the latest rush on the continent], Morocco was able to see potential where others could only think of risks.”
However, other analysts like Amine Dafir argue that Morocco’s growing economic interest on the continent was designed to shore up influence it may have lost by withdrawing from the AU.
Supporting Morocco in its application to rejoin the AU is a group of 28 African countries, representing more than the half of the votes (27) required for admission. The pro-admission countries penned a letter to the AU requesting the suspension of SADR’s membership until issues surrounding the legality of its existence are resolved by the United Nations Security Council. “Our demand is grounded in international laws,” says Macky Sall, the Senegalese president, whose country is one of the signatories.
Over the last three years, the king of Morocco, often travelling with a large entourage of businessmen, has visited several African countries, including Côte d’Ivoire, Gabon, Guinea-Bissau, Mali and Senegal. Besides being the most vocal supporters of the kingdom, these countries are also the top five destinations of Morocco’s FDI in sub-Saharan Africa.
In November, the king hosted a gathering of 30 African leaders in the margins of the climate change summit in the Moroccan city of Marrakesh, to “coordinate [African countries’] positions and speak with one voice to defend them,” a senior Moroccan diplomat told the AFP, a French news agency. The AFP pointed out that hosting the summit was a diplomatic coup for the kingdom as it sought to reassert its influence in Africa.
As Morocco pursues moves to have its AU membership reinstated, Jawad Kerdoudi, the head of the Moroccan Institute of International Relations, sees these efforts as a “diplomatic victory born out of a deliberate and actions-driven strategy”.