According to the heads of the Moroccan Financial Pole, the efficiency of capital investment for emerging markets in the flow of foreign exchange and the improvement of the business climate means that interest in attracting investment from private equity firms is growing in the Maghreb country, especially after the entry into force of the New Investment Charter in 2023.
- Morocco’s Financial Pole advocates capital investments
- Equity investment, a remedy for the financing shortage
- Morocco’s strategic position attracts global companies
- Growing Asian interest
- The new Investment Charter
- Investors supported by the state
The action is to attract private equity firms and then direct them towards companies that have promising growth potential, in order to help them progress. These are buyout and merger entities that are developed in order to raise capital primarily through an initial public offering; while the ultimate goal is to buy the target companies or merge into them.
According to financial experts, the number of companies registered in the Financial Pole approached 215, providing approximately 7,000 jobs in different sectors and sharing interests in African markets.
In this way, the target company is able to integrate more quickly into the stock markets. Given the effectiveness of this operation, the focus will be on attracting private equity firms during the current year and will remain operational for the years to come.
Morocco’s geographical position makes it a strong financial centre, as the North African country is ideally located at the crossroads between Europe, the Middle East and Africa, without losing sight of its proximity to the United States.
Morocco’s Financial Pole advocates capital investments
Morocco’s financial hub, ranked as Africa’s leading financial centre, continues to attract private equity firms from several countries with the start of the second phase of its expansion.
The 100 hectares of the first fully developed section is currently being developed. And to meet anticipated demand, the second phase of development of the pole area includes an expansion of approximately 14 hectares to be ready by 2026.
The Morocco Financial Pole was founded in 2010 in Casablanca and succeeded in attracting several financial companies and regional headquarters, in addition to multinational companies, service providers and holding companies.
Through the Finance Pole, Morocco facilitates administrative procedures for the stabilisation and arrival of people, provides free movement of capital and offers alternative methods of dispute resolution through the International Centre for Mediation and Arbitration in Casablanca (CIMAC).
It is worth mentioning that Casablanca Finance City (CFC) is a Moroccan public initiative aimed at making Casablanca a major African financial centre.
Equity investment, a remedy for the financing shortage
According to data from the Moroccan Association of Equity Investors, equity investment by Moroccan companies has recently reached approximately USD 100 million, a figure that is expected to increase in the coming years.
The relocation of business equity investment would solve the problems of the vulnerability of companies’ own money, a situation that is mainly due to difficulties in accessing finance.
In the view of government officials and the local economic community, this equity investment is an important step towards entering the stock market and boosting the financial market.
Morocco’s strategic position attracts global companies
Morocco relies on its unique geographical position to be a strong financial centre. In this respect, the president of the Financial Pole always affirms that “the country is ideally located at the crossroads between Europe, the Middle East and Africa, as well as close to America”.
The North African country’s financial situation is also linked to partnership agreements with some 19 African countries that provide access to all information on growth and investment opportunities.
China, Japan and South Korea are seen to be at the forefront of Asian companies, as well as European companies led by Spanish companies in the renewable energy sector, without losing sight of companies from the two Americas.
Growing Asian interest
Figures on new investments reveal Asian interest in Morocco, with a quarter of the projects approved last year coming from Japan and China, mainly concentrated in renewable energy and electric vehicles. China’s $9.5 billion investment wave is invading Morocco’s automotive industry.
The Alawi kingdom has become a preferred destination for foreign investors because it is one of the most competitive countries in the world. Chinese companies themselves are investing in the country because the cost here is lower than their own.
Another factor related to the post-COVID phase and the war in Ukraine influences this decision; especially when key markets such as the European Union and the United States of America were trying to bring their supply chains closer together. This made Morocco stand out compared to other investment destinations.
The new Investment Charter
Morocco’s new investment pact attracted investment projects worth 150 billion DH ($15 billion) a year after its adoption, supporting the achievement of its main goal of increasing the share of private investment in the Kingdom from one-third to two-thirds by 2035.
The new charter came into force in March last year and offers subsidies of up to 30% of the total investment amount under certain conditions, including the creation of increased employment opportunities, especially for women, investment in high value-added sectors, and outside major cities.
According to Moroccan officials, the results of the Investment Charter have been visible on the ground, even exceeding the expected figures.
From 1 March 2023 to 1 March 2024, the National Investment Commission (NIC) approved investment projects providing 70,000 direct and indirect jobs, and most projects are expected to be operational in an average of three years.
Prior to the adoption of the new Investment Charter, the annual investment rate ranged from 30 billion DH to 11,000 jobs. This means that investment in the first year of the New Investment Pact increased 5 times compared to the average before 2022.
Investors supported by the state
Approved investment projects received subsidies of approximately 2 billion dirhams. A figure that reflects the considerable effort of the state in difficult economic conditions and conveys the underlying message that “the state is with the investors”.
Industry is the most important sector for attracting investment under the New Charter. Within this sector, the automotive industry, especially electricity, is the most representative industry. Investments also included other sectors such as renewable energy, seawater desalination, tourism, education, health and culture.
Morocco relies mainly on mobilising local investors’ own investments, which has already been achieved, as more than 70% of the projects approved during the first year came from Moroccan investors.
Morocco’s priority is to support investment of any size, and its role continues beyond project implementation through ongoing maintenance in the expectation of seeing the fruit of these investments from this year to 2026.
