Morocco’s ambitious investments in Sub-Saharan Africa full of risks and rewards

Morocco’s ambitious investments in Sub-Saharan Africa full of risks and rewards

Morocco is consolidating its foothold in Sub-Saharan Africa by diversifying its investments and pushing for closer ties with the most dynamic economies in the region.

Shortly after Morocco re-joined the African Union (AU) on 30th January, King Mohammed VI embarked on a nearly two-month tour of five sub-Saharan African nations, culminating with the signature of over 50 bilateral agreements. Morocco has become the second largest investor on the continent behind South Africa in only a few years. After developing its presence in francophone West Africa, Morocco is now increasingly looking east for its investments.

A report published by the think tank OCP Policy Center shows that 66% of Morocco’s direct foreign investments went to Sub-Saharan Africa over the 2008-2013 period, up to 85% today according to data from the African Development Bank. While banking remains Morocco’s first area of investment, other business sectors, ranging from energy to chemicals, are also gaining prominence. Morocco is likely to maintain its focus on Sub-Saharan Africa as it seeks to reduce its reliance on trade with the EU in the context of enduring slow growth the Eurozone.

Morocco’s success on the continent

As the most stable country in North Africa, Morocco ranks among the top three recipients of Foreign Direct Investments (FDIs) on the continent. The country is also banking on the growth prospects of Sub-Saharan Africa to stimulate its own economy. Libya’s economy has virtually stalled as a result of political conflict. Algeria’s reliance on oil production and difficulties related to falling oil prices are limiting the country’s involvement south of the Sahara, while Tunisia still grapples with internal political turmoil. This situation has allowed Morocco to emerge as the first investor in Sub-Saharan Africa among North African nations.

Improving political relations with the rest of the continent are also creating favourable conditions for Morocco’s ambitious investment programme. Having re-joined the AU, Morocco is now seeking membership of the Economic Community of West African states, thereby signalling its renewed commitment to the African continent. The economic slowdown of the Eurozone, Morocco’s first trade partner, is a further incentive for the country to further expand its footprint in Africa.

Morocco’s linguistic and religious similarities with the francophone states of West Africa have allowed it to develop its presence in the region, particularly through its dynamic banking sector. Three Moroccan banks – Attijariwafa Bank (AWB), Groupe Banque Centrale Populaire (BCP) and Banque Marocaine du Commerce Extérieur (BMCE) – control much of the West African banking market and act as facilitators for Moroccan investments. Attijariwafa Bank, for example, operates in 13 Sub-Saharan countries and BMCE has a network of 19 franchises in the region.

Morocco has diversified its investments

West Africa remains the preferred destination for Moroccan investments, but Moroccan companies are increasingly investing in Central and Eastern Africa. In recent months, the country signed 22 cooperation agreements with Tanzania and close to 20 bilateral agreements. The launch of an African Business Connect forum in Tanzania in early April, bringing together 300 Moroccan and Tanzanian companies, reflected Morocco’s ambition to unlock investment opportunities in Eastern Africa.

While banking stills lead the charge, Morocco is also venturing into new business sectors. In February, the leading phosphate exporter Office Cherifien des Phosphates (OCP) signed a deal with Guinea to supply the country with phosphate fertilisers and with Ethiopia for the building of a $3.7 billion plant. The national phone company Maroc Telecom is reinforcing its presence in Sub-Saharan Africa and now operates in 11 countries, while the insurer Saham Finances has invested heavily in Mauritius, Rwanda, Nigeria and Angola.

In addition, Morocco is hoping to export its expertise in sectors where demand is expected to grow across the region, particularly renewable energies and green infrastructure projects. The recent success of the Marchica Lagoon redevelopment in the Ivory Coast, a 15-year-long project which includes the establishment of several tourist and urban centers, has established Morocco as a key player in sustainable infrastructure projects.


Morocco’s investment in Sub-Saharan Africa has been an undeniable success. The King’s annual diplomatic tour reflects the monarchy’s proactive role in fostering closer ties with Sub-Saharan Africa. Meanwhile, the country’s relations with Europe have deteriorated. Negotiations about a trade deal with the EU have stalled as a result of enduring disagreements over the status of the Western Sahara. The Arab Maghreb Union (AMU) has failed to foster close trade relations between its members, encouraging Morocco to look at Sub-Saharan Africa as a primary area of investment at the expense.

There are, however, challenges to Morocco’s involvement in the region. While Morocco’s investments are on the rise, trade with Sub-Saharan Africa only represents about 3% of its total trade flow. Morocco is not the only country banking on Sub-Saharan Africa’s attractive growth prospects and will have to face growing competition from emerging external partners and investors, including China, India and Europe. Morocco’s difficulty to fully adapt its exports to the needs of the local market and the lack of transport infrastructure across the region are also obstacles to its ambitions.

By re-joining the AU and seeking to promote inter-regional trade, Morocco has nonetheless signalled its desire to address those challenges and open a new chapter in its relations with Sub-Saharan Africa.

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