Morocco provides access to a large market of customers owing to its strategic location, free trade agreements (FTAs) and a world class infrastructure. It is situated only 14 km from the European coasts and is also at the crossroads of the main international exchange routes, linking the United States of America, Europe, the Middle-East and Africa. It has entered into multiple free trade agreements which give companies an access to a market of 55 countries representing a billion consumers and over 60% of the world's GDP.

1. 6
Source: "The Global Competitiveness Report 2016–2017". 2016. World Economic Forum.
https://www.weforum.org/reports/the-global-competitiveness-report-2016-2017-1/.
Morocco
1.1 Country overview
1.1.1 Morocco: An attractive investment destination in North Africa
Morocco provides access to a large market of customers owing
to its strategic location, free trade agreements (FTAs) and a
world class infrastructure. It is situated only 14 km
7
from the
European coasts and is also at the crossroads of the main
international exchange routes, linking the United States of
America, Europe, the Middle-East and Africa. It has entered into
multiple free trade agreements which give companies an access
to a market of 55 countries representing a billion consumers and
over 60% of the world's GDP
8
. It is the
first country in North Africa to benefit
from the advanced status in its relations
with the European Union
9
. In addition to
the European Union, Morocco has FTAs
with the USA, Turkey and Arab
Mediterranean countries. Several new
FTAs are under discussion that will give
a further boost to Morocco's exports.
These include FTAs with UEMOA
10
(Benin, Burkina Faso, Cote d'Ivoire,
Guinea Bissau, Mali, Niger, Senegal and
Togo) countries, CEMA
11
(Gabon,
Cameroon, the Central African Republic,
Chad, the Republic of the Congo and
Equatorial Guinea) countries and
Canada
12
.
Morocco has a world class infrastructure
that complements its strategic location.
Morocco was ranked 50
th 13
among 138
countries in the quality of overall
infrastructure sub-index in 2016 by the
World Economic Forum. Morocco's high
ranking resulted from the presence of
good quality ports, airports and roads.
For example, Tanger-Med, a cargo port
located about 40 km
14
east of Tangier is
one of the largest ports on the
Mediterranean and in Africa by capacity.
Morocco’s market access, highly competitive ecosystem and resilient economic growth
witnessed over last 10 years have helped it become a prominent investment destination in
the region.
Source: "Invest In Morocco - 7 Top Reasons". 2016. Invest.Gov.Ma.
http://www.invest.gov.ma/?lang=en&Id=3

2. 7
Morocco was ranked 38
th
among 138 countries
15
in the quality of ports ranking in 2016 by the World
Economic Forum. The highway network has grown rapidly from 1416 km in 2012 to 1800 km in 2015;
the government plans a target of 3000 km by the end of 2030
16
. The quality of roads rank in 2016 for
Morocco was 55 among 138 countries by the World Economic Forum
17
. Morocco is also able to
connect with all the major cities and economic platforms in the world through its 17 international
airports. It has telecommunications infrastructure which meets international standards. The mobile
subscription per 100 people stood at a high of 131 in 2014, with a total of 43 million clients
18
.
Morocco has a highly competitive ecosystem for
many industries and offers a relatively easy
environment for doing business. The
Government has been successful in creating
industrial ecosystems in sectors like automotive
and aerospace by supporting business groups
through tax incentives and financial support. In
the World Bank ease of doing business rankings
2017, Morocco ranked 68
th
out of 190 countries
and is positioned at the forefront of North African
countries
19
. Morocco stands third in Africa just
behind Mauritius and Rwanda ranking 49 and
56, respectively and ahead of the other
economies like South Africa ranking 74 and
Somalia ranking 190.
Key improvements have been made in the
starting a business, construction permits, getting
credit, protecting minority investors and trading
across borders sub-indices from 2016 to 2017.
The biggest improvement has been made in
trading across borders through new regulations
that have reduced the documentation required
for export. In addition, a single window system
which further eased process and reduced border
compliance time for importing has been
developed. Morocco's regulations for starting a
business are much better compared to Middle
East and North African (MENA) countries. It
takes 4 procedures and 9.5 days to start a
company in Morocco while it takes 7.8
procedures and 8.7 days on an average in
MENA countries. Also, the cost of starting a
business in Morocco is 7.9% of income per
capita which is much lower than the MENA
average of 26.3% of income per capita
20
.
Morocco allows 100% foreign ownership
allowance in all the sectors except oil and gas,
electricity and transport
21
.
The country is highly cost competitive which
helps in further improving its manufacturing
attractiveness. The minimum wage/month is 265
USD/month as compared to ~1600 USD/month
Source: "Invest In Morocco - 7 Top Reasons". 2016. Invest.Gov.Ma.
http://www.invest.gov.ma/?lang=en&Id=3.
Source: "Minimum Wages." 2017 Euromonitor International.
http://www.portal.euromonitor.com/portal/analysis/tab
Source: "Doing Business in Morocco". 2017 www.doingbusiness.org
http://www.doingbusiness.org/Reports/SubnationalReports/~/media/WB
G/doingbusiness/documents/profiles/country/MAR.pdf

3. 8
in Germany and France. This factor has motivated companies like Renault to establish their
production units in Morocco instead of Europe. Another cost efficient factor in Morocco is the
comparatively low cost to export. The cost to export one container was 595 USD in 2015 as compared
to the average in neighboring countries of 1012.8 USD
22
.
Lastly, Morocco has seen strong economic growth over last ten years and maintained strong
macroeconomic indicators that make it an attractive investment destination. Its economic performance
has especially improved due to the fall in oil prices, increasing foreign investments and high
agricultural output.
The GDP grew at a growth rate of 4.5% in
2015 as compared to 2.4% in 2014. This
was possible because of the increase in
cereal production by 53.4% compared to
the average of the past five years. Non-
agricultural activity growth remained
modest at 3.5 percent, including tourism
and the traditional manufacturing sectors
23
.
The inflation remained low at 1.6% in
2015. The current account balance has
also continued to improve, benefiting from
low energy prices and reduced domestic
imbalances. The current account deficit fell
to 1.9 percent of GDP in 2015 driven by lower energy and food imports, and stronger automobile,
phosphate and agriculture exports
24
.Foreign direct investments into Morocco increased from 1.2 bn
USD in 2010 to 3.6 bn USD in 2015 at a CAGR of 23%
25
.
1.1.2 Policy impetus
In 2014, the Moroccan Government launched an industrial acceleration plan to implement an efficient
industrial ecosystem via integration of the value chains and consolidation of relations between big
firms and SMEs. This plan focusses on six sectors, namely- automotive, aeronautics, offshoring,
electronics, textile and leather and food processing. The plan that will extend over the 2014-2020
period is expected to generate half a million jobs in the sector and substantially increase the share of
processing industry in GDP from the current 14% to 23%
26
. The plan has seen success with the
announcement of an agreement between the authorities and PSA Peugeot Citroën to open a
production plant in Morocco
27
. Also, the Government of Morocco is implementing its “2020 energy
plan” that aims to install power plants that would generate 2000 megawatts (MW) of new electric
capacity from renewable energy. The national energy strategy seeks to increase the contribution of
renewable energies to the country’s installed power capacities to 42% by 2020 and 52% by 2030,
distributed among hydropower, wind-power, and solar-power. The total cost of the project is estimated
to be USD 13 bn, out of which USD 9 bn is allocated for solar energy
28
.Morocco introduced new
policy reforms in 2011, which instituted the position of a Prime Minister to be selected from the largest
political party in the Parliament. A number of rights, that earlier rested with the Monarch, were
transferred to the PM including the right to dissolve the Parliament. Since then the Government of
The investments are expected to further increase with the Government focusing on
increasing the contribution of manufacturing industries, promoting green energy and
improving stability through reforms
Source: "Maroc | Perspectives Economiques En Afrique". 2016. Perspectives
Economiques En Afrique. http://www.africaneconomicoutlook.org/fr/notes-
pays/maroc.

4. 9
Morocco has introduced several policy reforms to strengthen governance and improve social
outcomes for the country. Decentralization of power, education promotion and women empowerment
are some of the major reforms that have been introduced. First, decentralization of power has been
carried out and more accountability accorded to regional and local governments. This was done by
holding regional and local level elections. Candidates selected from these elections determine the
new laws relating to the regions, prefectures, provinces and municipalities and allow citizens to be
more involved in management of local affairs. The Government is promoting tertiary education by
providing free medical insurance to 260,000 public tertiary students and by 2020 the Government
plans to support up to 460,000 students in this scheme. The Taysir program is implemented under
which children receive a scholarship between 60 and 140 MAD per month if the attendance criteria in
school are met. Finally, the promotion of gender equality has continued with the establishment of a
quota system for women elected in the 2015 elections. This allowed them access to nearly half of the
seats at stake in the communal councils and one third of the total number of people elected in
regional elections were women
29
.
1.1.3 Challenges to growth
A high dependence on imports for meeting the county's energy requirements remains a major risk
facing the Moroccan economy. Over 91% of energy supplied to households and industries comes
from abroad: coal, oil and oil products from world markets and gas from Algeria
30
. Out of the total
imports, 23% of the import is of oil and gas products to produce energy
31
. As discussed above, the
government of Morocco is focusing on renewable energy to reduce its dependence on oil imports.
The persistent high unemployment rate and associated social instability remains another major risk to
Morocco's growth. Unemployment remained high at 10 percent in 2016
32
, while youth unemployment
remained high at about 23 percent
33
. The government plans to reduce the unemployment rates to 8%
by 2017 and plans to create ~200,000 jobs annually as part of a national employment strategy
34
.
Lastly, high corruption in government dealings is another risk that could potentially dissuade new
investments in the country. Morocco scored a low of 37 out of 100 in corruption perception index by
Transparency International. Moreover, the corruption perception rank fell from 88 in 2015 to 90 in
2016
35
. The government of Morocco has launched a nation-wide strategy against corruption in 2016
and has allotted a budget of 1.8 bn MAD. The strategy will focus on improving citizens' services,
increasing transparency and access to information as well as accountability of public contracts. The
program is intended to span a time frame of ten years. The government will use national and
international indicators to assess the efficiency of the strategy (mainly the corruption perceptions
index by Transparency International
36
).
Risks to Morocco's growth in the medium term remain in terms of high dependence on oil
imports for energy generation, a high unemployment rate and high corruption in
government offices

5. 10
1.1.4 Analysis of high potential industries
In 2015, Morocco had a GDP of USD 113 bn with services contributing the largest share at 56%,
followed by industry at 29% and agriculture at 15%. Morocco has been one of the most prominent
destinations in Africa for FDI and received a FDI of USD 3.6 bn during 2014-15.
The automotive industry generated USD 2.74 bn in exports constituting more than 10% of total
exports out of Morocco. Production of vehicles in Morocco is growing rapidly at a CAGR of 42%
between 2011 and 2015 with new OEMs and suppliers expanding local operations in the country. The
government is aggressively encouraging cluster based development and new investments in this
sector. It allows 100% foreign equity ownership in all ventures in this sector. The government offers
several investment incentives including state contribution to certain expenses and exemption from
customs and VAT (based on applicability). The automotive sector was one of the largest receivers of
FDI over last 5 years among all other industries. Investor sentiment is strong, especially among the
European car-makers.
Based on the strategic importance, investment potential and government promotion intensity
of different sectors of Morocco's economy, we analyzed 3 sectors that are particularly
interesting for foreign investors – Automotive, Renewable energy, Agriculture and Agro-
processing
Source: "Morocco". 2017 IMF
https://www.imf.org/external/pubs/ft/scr/2017/cr16265.pdf
Source: e.V., Transparency. 2017. "Research - CPI -
Overview". Transparency.Org.
http://www.transparency.org/research/cpi/overview.
76
78
82
84
86
92
80
88
0
90
74
’11
85
80
’09 ’15
88
’14
80
’13
91
’12’10
90
89
’08’06 16
88
’07
79
72
80
9.0
10.0
0.0
9.5
9.9
’’12’’06 16
10.0
’’07
9.1
’’08
9.0
9.7
9.1
’’10 15
9.8
9.6
’’13 ’’14’’11
9.2
’’09
8.9
9.9
Morocco corruption perception rank Morocco unemployment rate
Source: "Undata | About Us". 2016. Data.Un.Org. http://data.un.org/CountryProfile.aspx

6. 11
Source: "Morocco automotive cluster". 2015 Iberglobal
www.iberglobal.com/files/2016/morocco_automotive_cluster_2015.pdf
.
Source: "Production Statistics | OICA". 2016. Oica.Net.
http://www.oica.net/category/production-statistics/.
The renewable energy sector in Morocco contributes ~30% of total installed power generation
capacity. The country has a high annual power generation potential of ~8000 TWh from wind and
~2600 KWh/m
2
from solar. 100% foreign equity ownership is permitted in the sector and government
plans to double the installed capacity by 2020 to 6000 MW with an investment of USD 13 bn, majorly
in solar and wind related generation. The Moroccan government has identified 7 wind plant locations
and 5 solar plant locations to be developed by 2020.
Agriculture and agro-industry in Morocco constitutes 19% of the national GDP and employs over 4
million people, about 40% of the nation's workforce. Morocco launched the Green Morocco Plan in
2008 to improve the business environment in this sector by enabling modernization of the agricultural
sector and better access to land. Lacking sufficient funding in the past, the sector has recently
undergone a shift in policies to encourage investments. For example, the European Bank for
Reconstruction and Development (EBRD) has invested over €1 bn in 26 projects since 2012.
1.2 Automotive sector
1.2.1 Sector Overview
Production of vehicles increased at a CAGR of 42% growing from 59,500 vehicles in 2011 to 345,100
vehicles in 2016. Over 90% of the total production in 2015 comprised of personal vehicles while
commercial vehicles comprised only ~10%
37
. Currently Renault is the only major OEM in Morocco
which is leveraging the presence of an ecosystem of 200 suppliers. Renault operates two facilities in
Morocco. One is situated to the east of Casablanca (opened in 1966), and the second is situated in
Tangiers (opened in 2012). The Tangier plant and the Casablanca facility have a production capacity
of 400,000
38
and 80,000
39
vehicles respectively. Most of the production is exported to Europe.
In 2015, the automotive sector contributed USD 2.74 bn (10.2%) to the total exports from Morocco.
Europe is the biggest export destination for Morocco due to its close proximity and contributes 80% to
the total exports value. In Europe, France, Italy and Spain are the main export destinations having
28%, 10% and 10% share, respectively
40
. Turkey is also a big export destination with a total share of
Automotive is one of the fastest growing sectors in Morocco with production of vehicles in Morocco
increasing exponentially over the last few years.

7. 12
14% of exports. The share of France in exports is increasing rapidly from 21% in 2013 to 28% in
2015. Morocco imported vehicles (both commercial and personal) worth 1.59 bn USD out of total
imports of 36.7 bn USD in 2015. Germany was the biggest origin of import and it contributed 25% of
total vehicles imported.
In the domestic market, vehicle sales (both commercial and personal) have grown at a modest CAGR
of 4% from 112,100 vehicles in 2011 to 163,110 vehicles in 2016. There was an increase of 25% from
2015 sales, which was the previous record. Sales were mostly dominated by personal vehicles which
had a share of 93.3% in 2016. Renault and Dacia owed by Renault Maroc is the market leader with a
2016 market share of 38%
41
. It manufactures Dokker, Dokker Van, Lodgy and Sandero models in the
Tangier plant and Logan, Sandero and Sandero Stepway models in the Casablanca plant. The rest of
the market is dominated by imported cars such as Volkswagen, Hyundai and Peugeot contributed,
and 7%, respectively, in terms of 2014 market share
42
.
1.2.2 Growth Outlook and drivers
Morocco expects auto industry exports to reach an annual MAD 100 bn (USD 10 bn) by 2020 from
MAD 27.66 bn (USD 2.74 bn) in 2015 as a result of PSA Peugeot Citroen starting production at its
new USD 630 mn factory. In 2019 production of the Peugeot plant will be 90,000 vehicles and it is
expected to rise to 200,000 as sales pick up. The percentage of locally sourced parts is expected to
increase to 80% in 2020 from 40% in 2015 with more suppliers coming in
43
.
More new players are expected to start production in Morocco in the near future. Volkswagen
announced in 2015 that it is planning to open a factory in Tangier to supply cars to the Middle East
and North African market. Negotiations are currently going on between Volkswagen’s top
management and the Moroccan government
44
. Yangtse Automobile, a Chinese electric car company,
announced in 2016 that it would invest USD 0.1 bn in Morocco. It plans to build a factory in Tangier,
specializing in electric cars to be made available for sale domestically and abroad
45
.
The growth outlook is expected to be positive with new international players planning to
enter the market
Source: "In 2014 the car market in Morocco rose
1%", Focus 2 Move. 2015.
http://focus2move.com/car-market-in-morocco/
Source: "OEC - Morocco (MAR) Exports, Imports,
And Trade Partners". 2016. Atlas.Media.Mit.Edu.
http://atlas.media.mit.edu/en/profile/country/mar/.

8. 13
Foreign investment opportunities are available for local production of parts as well as for
complete vehicle production
Growth in the automotive sector of
Morocco is driven by its strategic location,
government support, presence of strong
support industries and the domestic
market.
The proximity to Europe benefits the
automotive sector as 72% of vehicles
produced in Morocco are exported to
Europe. The production facilities can be
located close to the Tanger-Med port
which reduces the overall transportation
cost.
The Moroccan government incentivizes local manufacturing in the automotive sector by providing tax
incentives, financial support and training. The government has established free zones for automotive
companies that provide corporate tax exemption for the first five years followed by a cap of 8.75%.
Exemption on custom duties on imported goods and products is also provided. The Government
provides financial support to private players. For example; it funds the investment up to 10% of the
total investment which includes an upper limit of 30% on cost of buying the land, 2000 MAD/m
2
on
cost of construction and 10% on cost of new capital goods. In addition, the Government plans to
introduce four new vocational training institutes for the Automotive Industry in the automotive clusters
of Tangier and Casablanca. Direct aid for training in these institutes can be up to MAD 65,000 per
person and these institutes would be governed as a public private partnership. The government is
also pushing for manufacturing of remaining components such as exhaust systems, powered axles,
and wheels and tires within the country.
A conducive ecosystem exists for the automotive industry. Morocco already has over 200 suppliers
supplying components to OEMs. Among these, prominent investments include Japan’s Denso and
France’s Inergy Automotive Systems who have invested USD 12.7 mn and USD 6.4 mn, respectively,
for setting up operations in Tangier. Delphi Automotive expanded the capacity of its Tangier plant in
2011, creating over 1200 new jobs. Spanish company Proinsur also invested around USD 2.1 mn in a
2500 sq.m factory in Tangier that specializes in plastic injection and automotive parts
46
. The five
strongest components of Morocco in the automotive industry are automotive wiring, vehicle interior
and seats, metal pressing, automotive batteries and motors and transmission
47
.
Lastly, Morocco’s domestic market offers interesting, medium-term opportunities for car producers.
Valued at USD 1.59 bn, the market remains relatively underdeveloped for its population size, with an
average of 130,000
48
units sold each year amidst a population of 32.3 mn
49
people as compared to
around 16,000,000
50
units sold each year amidst a population of 509.6 mn
51
people in the European
Union. Currently, the price of cars in Morocco is around the same as that in Europe while the GDP per
capita is much lower. As a result, a significant portion of the Moroccan population still cannot afford
cars. There is a potential for OEMs to manufacture affordable car models locally and leverage and
grow with the domestic market
52
.
1.2.3 Foreign investment opportunities
Source: "Morocco Sees $10 Billion From Auto Industry Exports By 2020". 2016.
Reuters. http://www.reuters.com/article/us-morocco-economy-autos-
idUSKCN0SS14Q20151103.
2.74

9. 14
The Government targets to increase the percentage of locally sourced parts from 40% in 2015 to 80%
in 2020
53
. The Moroccan automotive supply chain doesn’t manufacture some important parts like
exhaust systems, suspension systems, powered axles, wheels and tires
54
. Hence, there is an
opportunity for suppliers to come in and manufacture missing components while utilizing the tax
incentives and financial support provided by the Government. Renault together with a partner group of
suppliers is planning to invest USD 1.0 bn to boost Renault's local sourcing of components. This is
projected to generate revenue of around USD 2 bn
55
.
Currently, Renault is the only major OEM present in Morocco. Investment opportunities exist for more
OEMs to manufacture cars locally and leverage Morocco's existing ecosystem, government
incentives, strategic location for exports and the domestic market. For example, PSA Peugeot plans
to invest USD 0.6 bn in Morocco and begin production of vehicles by 2019
56
. Either of the routes –
CKD (completely knocked down), SKD (semi knocked down) or CBU (completely built unit) can be
adopted by players for entering the market.
1.3 Renewable Energy Sector
1.3.1 Sector Overview
In 2015, Morocco had a total power generating
capacity of 8158 MW out of which 28% was based
on renewable sources. Hydro based power plants
contributed to 16% of the total capacity while wind
and solar power plants contributed 10% and 2% to
the total capacity, respectively
57
. The installed
renewable power generation capacity has
increased at a CAGR of 6% between 2010 and
2015. The net imports of electricity have increased
at CAGR of 9% between 2011 and 2014; however
the growth trend reversed in 2015 with the net
import of electricity falling by 18% between 2014
and 2015
58
.
Morocco is leading the way for Africa in renewable energy. Morocco is one among
Africa's solar leaders and is considered a role model for renewable energy policy making.
Morocco also houses Africa's largest windfarm. Morocco ranks seventh in 2016 climate
change performance index, the only non-European nation in the top 20.
Source: Site Web Officiel De L'onee - Branche Electricit". 2016.
One.Org.Ma. http://www.one.org.ma
Source: Source: Site Web Officiel De L'onee - Branche Electricit".
2016. One.Org.Ma. http://www.one.org.ma
Source: Site Web Officiel De L'onee - Branche Electricit". 2016. One.Org.Ma.
http://www.one.org.ma

10. 15
The renewable energy sector's growth in Morocco is driven by Government support and
the potential of wind energy and solar energy in Morocco
On average Morocco fulfills 16% of its electricity needs from imports for which it has to spend over
USD 3 bn in a year on average on fuel and electricity imports
59
. The local production is also
completely supported by imported fossil fuels. This dependence on imports adversely affects the
country's trade balance and can be subverted by developing renewable sources of energy.
A number of wind power plant and solar power plant projects are already installed. Currently, Engie, a
French company, is operating a 300 MW wind farm in Tarfaya, Morocco. The estimated cost of the
project was more than USD 450 mn
60
and the project was completed in 2015. In solar energy, ACWA
power is leveraging its technological expertise to build the largest Concentrated Solar Power plant in
the world. The total investment for the implementation of the project is estimated to be USD 2.1 bn
61
and it was inaugurated in February 2016, which when fully operational by 2018 would power 1.1 mn
homes. The funding for the project is led by the Moroccan Agency for Solar energy jointly contributed
by the African Development Bank, Climate Investment Funds through the World Bank and European
financing institutions such as Kreditanstalt Fur Wiederaufbau (Kfw), Germany and French Agency for
Development
62
.
1.3.2 Growth Outlook and Drivers
The Moroccan Government is encouraging development of renewable energy sources in the country
and is incentivizing new projects with favorable policies. The renewable energy sector is completely
open for foreign investment and doesn’t have any restrictions on the share of ownership,
management, etc. The private production of renewable energy is governed by the 'The Renewable
Energy Law' which permits electricity to be produced and exported by private entities. However, the
supply of electricity must still be undertaken through the national electricity network. To support
project financing, the Government has created an
energy investment company for developing
renewable energy with a capital of USD 0.1 bn. Also,
the Government has introduced specialized courses
in solar and wind energy in the major engineering
schools and universities to increase technical
talent
63
.
The regions of Essaouira, Tangier and Tetouan have
wind speeds of 9.5 to 11 m/s at 40 m height and the
regions of Tarfaya, Dakhla, Laayoune and Taza
have a wind speed of 7.5 to 9.5 m/s at 40 m height.
Owing to such high wind speeds, Morocco has a
total potential of 8000 TWh/year of power from wind
energy
64
. Also, Morocco has more than 3000
hours/year of sunshine which enables the country to
potentially generate 2600 KWh/m
2
/year on an
average
65
.
Morocco aims to increase the total installed renewable capacity in the country from 2764 MW in 2015
to 6000 MW in 2020 in order to reduce its dependence on imported energy resources. It plans to
increase the renewable share in power generation to 42% in the total electricity generation capacity
Energy Insight: Morocco Solar, Wind & Hydro Projects 2016". 2016.
Energyinsight.Info.
http://www.energyinsight.info/conference_morocco_solar_wind_hyd
ro.html

11. 16
by 2020. The plan envisages equal contribution from each energy source, i.e., 2 GW of capacity from
solar, wind and hydro. Solar capacity will witness the highest growth from 160 MW to 2000 MW,
followed by wind. The hydro capacity is expected to grow at a modest 2%. The total cost of the project
is estimated to be USD 13 bn, out of which USD 9 bn is allocated for solar energy
66
.
1.3.3 Foreign Investment Opportunities
The government's target for installed renewable capacity 2020 provides opportunities to build, own
and operate power plants based on both solar and wind energy.
The government facilitates concessional debt financing and also assures access to the transmission
grid. The government has already finalized locations for these plants. Five solar power plants are
planned to be built, whose location has been decided based on the average annual sunlight. Out of
these five, three would have a capacity of 500 MW and the other two will have 400 MW and 100 MW
respectively. A total investment of USD 9 bn would be required and an annual production capacity of
2000 MW is expected by 2020. Seven wind power plants have also been planned in the regions with
high wind speeds. Four out of the seven projects would have a capacity of more than 100 MW while
three projects would have a capacity of more than 200 MW. An investment of USD 3.5 bn is required
to set up the wind power plants
67
.
The second set of opportunities exist in supporting the value chain by manufacturing of equipment
and components for renewable power generation which includes solar water heaters, crystalline
photovoltaic modules, mirrors, rotor blades and power equipment like inverters and transformers.
Opportunity also exists in import and supply of the above mentioned products in the local markets.
Source: Energy Insight: Morocco Solar, Wind & Hydro
Projects 2016". 2016. Energyinsight.Info.
http://www.energyinsight.info/conference_morocco_solar_wi
nd_hydro.html.
Source: Energy Insight: Morocco Solar, Wind & Hydro
Projects 2016". 2016. Energyinsight.Info.
http://www.energyinsight.info/conference_morocco_solar_wi
nd_hydro.html.
Foreign investment opportunities exist in development of power plants, supporting the
value chain and serving the technical training market in renewable energy

12. 17
The agriculture sector plays a crucial role in the Moroccan economy and has received a
lot of support from government programs in the recent past
The third set of opportunities exists in the technical training market for setting up power plants and
maintaining them. The government predicts the need of a minimum of 17,900 technicians and 5300
engineers by 2020
68
.
1.4 Agriculture and Agro-processing
1.4.1 Sector Overview
The agriculture and agro-processing sector plays a major role in the Moroccan economy contributing
about 17% to the national GDP, divided between agriculture (13%) and agro-industry (4%). The
sector employs ~40% of the country's labor force (over 4 mn people) including about 100,000 people
in the agro-processing industry
69
.
Production value from the agricultural sector has grown at a CAGR of 4% from 16.2 bn USD in 2010
to 18.3 bn in 2013. The growth has slowed down over the last few years due to lack of proper
irrigation and uncertain climatic conditions.
70
The major agricultural products of Morocco include barley, wheat, citrus fruits, grapes, vegetables,
olives, livestock and wine.
Crops and cereals accounted for approximately 49% of the total production value of the sector in
2013. Livestock products made up the remaining ~51% of the output value. The agricultural sub-
segment with the highest growth is cereals. Morocco generates sufficient food for domestic
consumption, with the exception of a few products such as sugar, tea and coffee, which need to be
imported.
Citrus and tomatoes are the key agricultural
produce accounting for around 54% share of the
sector’s overall exports between 2007 and 2013,
according to a report released by the Ministry of
Economy and Finance in July 2014. Europe
imported about 92% of Morocco's exported fresh
goods in the same time period, led by France
(40%)
71
.
Exports of processed goods have increased in
terms of value over the past decade due in large
part to higher food costs in the market. However,
volumes have remained more or less flat,
accounting for around 12% of total industrial
exports and mainly constitute canned goods and
olive oil.
Source: "Value of Agricultural Production- Food and Agricultural
Organisation- United Nations". 2016.
http://www.fao.org/faostat/en/#data/QV

13. 18
The agriculture sector in Morocco offers numerous opportunities in both organic and
inorganic farming. The opportunities range from farming the land to supplying the equipment
1.4.2 Growth outlook and drivers
Given the importance of the sector, the government has always promoted the sector. However, in
2008 it launched an ambitious plan 'Plan Maroc Vert (PMV)', meaning Green Morocco Plan, in order
to extensively promote the sector.
The plan aims to reform the agriculture sector in the kingdom with multiple
programs, dealing with upgradation of irrigation infrastructure, promotion
of fertilizers and trade facilitation. The plan aspires to contribute MAD 174
bn to the GDP by creating 1.15 mn jobs and tripling the median rural
income by 2020.
72
As a consequence of this plan, the sector is forecasted
to grow at a CAGR of 4% from USD 107 bn in 2014 to USD 158 bn in
2024.
For developing irrigation infrastructure, the government has launched the
National Irrigation Water Saving Program (PNEEI), under the PMV. PNEEI
aims to replace surface irrigation by drip irrigation on nearly 550,000 ha by
2020 and 700,000 ha by 2024 in order to save water. For achieving the
target, the government is subsidizing drip irrigation equipment, procurement of seeds and plants of
adapted crops
73
for farmers. An amount of USD 4.5 bn has been earmarked for PNEEI.
Farmers in Morocco utilize low amounts of fertilizers as compared to farmers in developed countries.
The average fertilizer use in Morocco is about 4 times less as compared to the likes of France. Hence,
the government is promoting use of fertilizers and aims to increase fertilizer usage by 78% from 9 mn
MT/year to 16 mn MT/year.
74
Lastly, the government is making efforts to diversify its export markets away from Europe, which
accounts for 63% of agricultural exports. The kingdom has already signed FTAs with the US, the EU,
Arab countries and Turkey. Several more FTAs, including the one with Canada and UEMOA are in
progress.
1.4.3 Foreign Investment Opportunities
Farming in general is lucrative in Morocco because of the availability of cheap labor and the ease of
leasing the land. By 2014, up to 100,000 hectares of land had been leased and another 600,000
hectares should be leased by 2020.
75
Morocco has strengths in agricultural production that promote the emergence of organic farming. The
land and the climate are suitable for the production of off-season products for EU markets. The
The sector is positioned to grow as the government is making continuous efforts for
improving overall productivity by investing in infrastructure upgradation projects, by
promoting use of fertilizers and by expanding export markets
Source: "USDA ERS - Publications".
2014. Ers.Usda.Gov.
https://www.ers.usda.gov/publications/

14. 19
persistence of traditional agriculture has allowed the conservation of farmers' expertise on "natural"
(low input) production.
In all Moroccan regions, especially in the High Atlas, local varieties have been conserved in a
dynamic way by farmers since centuries. Farmers have been able to select varieties resistant to
diseases and pests and adapted to local environmental conditions. Self-seeds reproduction on farms
has remained predominant in these areas.
In addition to the above, the agriculture sector in Morocco also provides opportunities for supplying
equipment, fertilizers and providing logistics services.
The government's focus on increasing water efficiency by replacing surface irrigation with drip
irrigation and on promoting the use fertilizers provides ample opportunities for private players. Private
players can supply drip irrigation equipment, seeds and plants of the crops modified for drip irrigation
and fertilizers.
Furthermore, opening up of the distant markets for exports because of FTAs drives opportunities for
providing logistics services at large scale.
1.5 Examples of successful companies
1.5.1 Renault
Renault is a French multinational automobile
manufacturer established in 1899. It has a presence in
128 countries and had a total sales volume of 3.18
mn vehicles in 2016. The company produces a range of
cars and vans, and in the past has manufactured
trucks, tractors, tanks and buses/coaches. Renault
entered Morocco in 2003 by buying a 26% stake in
the Somaca production unit. Currently Renault has
80% ownership of the plant. In In 2012, Renault
opened another production unit in Tangiers
76
.
Renault's investment into Morocco has helped attract
over 30 auto component suppliers to set up
manufacturing operations in Morocco, including
players like Delphi, Yazaki, Visteon, Valeo, Inergy
and Faurecia. In 2015, Renault employed a staff of
9,653 people in Morocco and produced 288,053
vehicles.
Renault chose Morocco for setting up its operations because of several reasons like market access,
tax incentives and cheap labour.
Renault opened its second production unit very
close to the Tanger-Med port. Tanger-Med was
especially important to Renault’s USD 1 bn
investment, since the French manufacturer’s production in Morocco is intended for export. A rail track
connects the factory directly to Renault’s terminal at the port and helps it to reduce transportation
costs. Also because of the Free Trade Agreement with Europe the vehicles made by Renault in
Morocco can be imported into Europe without being subject to any import duty
78
. This effectively
makes it part of Renault’s EU production network
"We are in a perfect location at the gates of
Europe.
77
”
- Jean-François Gal,
Director of the Renault factory
Source: "Morocco automotive cluster". 2015 Iberglobal
www.iberglobal.com/files/2016/morocco_automotive_cluster
_2015.pdf

15. 20
Secondly, Renault's manufacturing plant is located in the Tanger Free Zone (TFZ), which holds the
status of a Special Economic Zone (SEZ). The TFZ is one of the two established Integrated Industrial
Platforms (P2Is) that were specifically designed to benefit automotive manufacturing. Renault in
Morocco was able to enjoy a five-year corporate tax exemption, value-added tax exemptions on
imports and exports, the removal of restrictions in capital convertibility and repatriation, simplified
customs procedures and free transactions in foreign currencies.
Lastly, the cost of labour is much lower in Morocco than in
Europe; not just lower than that in France, but also much lower
than that borne by Dacia in Romania or Renault in Turkey.
Dacia’s monthly labour cost in Romania is, on average, USD
1,200, slightly above Renault’s Turkish cost of USD 983 a
month. By contrast, the average Moroccan monthly labour cost
is just USD 372. The difference in wages is even more dramatic
when compared with France where the average wage is more
than six times higher than in Morocco in an automobile factory
80
.
The cost advantage which Morocco offers has also played a key
role in the geography of Dacia's production, specifically the
decision to move a large part of Sandero manufacturing from
Romania to Morocco. Most of the Sandero production for
Europe now takes place in North Africa, with capacity freed up
for the Romanian plant to focus on the higher-value Duster SUV
and the Logan MCV, including production of right-hand drive
models for the UK
81
.
1.5.2 Bombardier
Bombardier entered Morocco in 2013 and
has been very successful. Bombardier is a
Canadian multinational aerospace and
transportation company. It employs more
than 70,900 people and has manufacturing,
engineering and service facilities in 27
countries.
In 2013, Bombardier started manufacturing
wing flaps and ailerons for its C-series and
CRJ series aircrafts. It has invested USD
200 mn till now and employed 100 people
by 2014. The company is expanding rapidly
and plans to increase the number of
employees to 850 by 2020
82
.
Bombardier chose Morocco because of the tax incentives, cultural advantage, technical
knowledgeable resources and existing clusters.
Its manufacturing plant is located near the airport in the Casablanca zone that offers a range of
financial incentives, such as no taxes for five years, tax rates of 8.75 per cent for an additional 20
years and 17.5 per cent thereafter
83
.
"The decision to install the
Renault Project at Tanger Med
in Morocco was based on
several factors such as a rapidly
growing equipment rate and an
attractive domestic market,
geographical proximity to
several European and African
countries and opportunities
offered by the Agadir Agreement
and the solid wage and fiscal
competitiveness
79
".
- Jacques Chauvet
Leader, Management Committee
Euromed Region, Renault
Source: Presse, Revue. 2014. "Bombardier: A New Aerospace Factory
in Morocco Is Necessary". http://www.aeronautique.ma/Bombardier-A-
new-aerospace-factory-in-Morocco-is-necessary_a2318.html.

16. 21
Morocco has a similar culture to Europe (especially France) where a lot of plants of Bombardier were
already located before it expanded to Morocco.
Also, Bombardier is headquartered in Canada
where French is the second most spoken
language after English and Morocco is a French
speaking country. Turkey was an alternate
consideration but was disregarded due to its
language barriers.
The Institut des Métiers de l’Aéronautique (IMA)
is located in the Casablanca zone where students are trained in aeronautics engineering. Hence,
Bombardier has been hiring employees trained by IMA to make simple structures, including flight
controls, for its CRJ Regional Jets.
Lastly, Morocco already has a developed cluster of aeronautics companies. The aeronautics sector in
Morocco currently employs about 8,000 people, according to the Moroccan Aerospace Industries
Association. It is concentrated in the Casablanca region, near the industrial park at the Nouaceur
airport and has attracted more than 100 aerospace companies
85
. Tunisia was also considered but
disregarded due to lack of a developed cluster.
1.5.3 Market entry into Moroccan Agriculture sector via acquisition
Sofiproteol (Avril Group) is a global agro-
industrial group based in Paris, France. The
group has a wide range of interests in the agro-
industry with a focus on agro-processing and
renewables. The group started expanding their
global operations in 2008 with a focus on West
African and Eastern European markets.
Lesieur Cristal was an agro-industrial firm
founded in 1940 based out of Casablanca,
Morocco. The company primarily dealt in oil
and soap products. The company faced a
difficult year in 2011 due to a surge in the price
of raw materials that led to a decline in the
company's profits.
Avril group acquired Lesieur Cristal in July 2011, in the midst of their challenging financial year. The
company managed a rapid increase in its profits despite an unfavourable macroeconomic situation as
well as inflationary pressures on the price of raw materials.
Danone, a French multi-national food processing corporation, wanted to expand its presence on the
African continent. Dairy products were Danone's primary focus goods for the African market.
"It is a logical move for us to market our aircraft in
Africa where we expect they will significantly
contribute to the growth of the sector. Our
investment in Morocco shows our dedication to
the continent’s economic development which is so
intricately linked to regional aviation
84
.”
- Ray Jones,
Senior Vice President,
Bombardier Commercial
Source: "Infinancials - Lesieur Cristal SA". 2016.
http://www.infinancials.com/Eurofin/control/company?view=snapshot
&company_id=30032KM&nbrdm=9340.

17. 22
Centrale Laitiere was founded in 1953 as a
franchise of Danone, however, SNI, the investment
group backed by Morocco's royal family, also held
significant stakes in the company. Centrale Laitiere
had a share of nearly 60% in the Moroccan fresh
dairy market. In 2012, Danone spent USD 347 mn
raising its stake in Centrale Latiere up to 90.9%
increasing their investment in African food-
processing market
87
.
Post-acquisition, Centrale Laitiere achieved a 3.6% rise in sales to 7.01 bn dirhams in sales in the
year 2013.
Biscuiterie Industrielle du Moghreb (BIMO) is a food-processing company that makes biscuits and
chocolates. Founded in 1981, BIMO had annual sales of ~830 mn dirhams in 2011. In 2013,
American food-processing conglomerate Kraft Foods, acquired a 50% stake from the local investment
holding National Investment Co. (SNI, controlled by the country's royal family) to increase its stake to
100% in the Moroccan food company. The takeover was a strategic move by Kraft foods as a part of
its plans to grow into developing countries in the Middle East and Africa.
88
1.6 Key takeaways
Morocco is projected to grow at a high rate and continues to be a prominent investment destination.
Its market access, competitive ecosystem and stable economy are the key factors for making it an
attractive investment opportunity. The automotive, renewable energy and agricultural sectors are ripe
with investment opportunities. We have identified four key lessons from the pioneers who have
successfully invested in Morocco that new investors can profit from and that are crucial for ensuring
success in the country:
• Setting up an export hub for the European market
• Maintaining cost competitiveness through scale, scope and replication
• Leveraging Government's incentive schemes like tax incentives and financial support
• Using the existing ecosystem by developing strong connection with local supply base
"This operation is part of Danone's
internationalization strategy in fast growing
emerging markets. In this respect, Morocco is
of particular interest for Danone as it is stable,
booming and features an economic
environment conducive to investment
86
"
- Franck Riboud,
CEO, Danone Group

18. 82
Contact
Study Author:
Dr. Wilfried G. Aulbur
Managing Partner India,
Member of Supervisory Board
Roland Berger
Phone: +91 99 206 30131
E-mail: Wilfried.aulbur@rolandberger.com