INVESTMENT OPPORTUNITIES IN MOROCCOS MAIN CITIES Workshop Africa - PowerPoint PPT Presentation

INVESTMENT OPPORTUNITIES IN MOROCCO’S MAIN CITIES Workshop Africa Works 2019 Mr Jean Boissy Senior Consultant MEYS Emerging Markets Research

INDEX WORKSHOP • Short profile MEYS Emerging Markets Research • Morocco: An overview • Main market trends in Morocco • Investment opportunities in Morocco’s main cities: − Real estate developments − Social housing program − Urban logistics − Public works • Business environment in Morocco

Short profile MEYS Emerging Market Research

Established in 2010 • MEYS Emerging Markets Research is an international consultancy and advisory firm • Together with local partner Harvard Consulting an office in Casablanca (Morocco) • Clients are public organizations, SMEs and large enterprises searching for new business opportunities • in the MENA-region and West Africa Active in sectors: maritime industry, construction and real estate, agribusiness, industry, transport and • logistics

Morocco: An overview

Morocco : A strategic geographical location Europe 14 km Morocco

A short history of Morocco Morocco is part of the Maghreb (Morocco, Tunisia, Algeria, Libya, Mauritania) • 24 – 253 AD : part of Roman Empire -> Volubis (near Meknes) • Early 8 th century : arrival Arabic rule (Moussa Ibn Nasr) -> invasion of Spain • 8 th – early 19 th century : various Berber dynasties (Idrissi, Almoravid, Marinid, Wattasid, Alawi) ruled • Morocco and large parts of the Maghreb and Spain Centre of governance in Fez or Marrakech • Wattasid era Idrissi era Almoravid era

1822 – 1956 : European rule • 1956 : Morocco independent and becomes Kingdom of Morocco • Sultan Mohammed V first king of Morocco • 1961: King Hassan II (son of king Mohammed V) in power • 1975: the Green March (El Massira), 350,000 Moroccan civilians marching to the Western Sahara -> • Spain retreats, conflict with Polisario (ongoing) 1990s : liberalization of the economy, increasing cooperation with Europe • 1997 : first Parliamentary elections • 1999 - .. : King Mohammed VI succeeds his father Hassan II -> modernizing Moroccan society and • economy European rule 1956: Morocco independent King Mohammed V

Country overview Capital Rabat Population 35.4 million people (2018) Democratic and social Constitutional Institutional System Monarchy Area 710 850 km² Climate Mediterranean Rabat Time Zone GMT (GMT+1 in summer) Languages Arabic (official), French, Spanish, English Rabat: 0.6 million people Casablanca: 3.4 million people Main cities (population 2016) Marrakech: 1.4 million people Tanger: 1.1 million people 1063.3 Billion DH (2017) Casablanca GDP 96.7 Billion euro King Mohammed VI, 1999 - …. 30 509 DH (2017) GDP per capita 2 774 euro Average growth 4.4% (over the last 10 years) GDP Distribution Primary Sector 13.6% (2016) Secondary Sector 29.5% Tertiary Sector 56.8% Inflation Rate 0.7% (2017) Marrakech Source: HCP

Strong macro-economic drivers during last twenty years Morocco now 6th economy of Africa GDP (million US$), 2016 Nigeria South Africa Average GDP Growth rate (%) Egypt Algeria 10 Angola Sustained GDP Morocco 4,7 4,8 3,6 5 2,8 Sudan growth Kenya Ethiopia 0 Tanzania 2000 - 2004 2005-2009 2010 - 2017 1995 - 1999 Libya Ghana Tunisia Average Inflation rate (%) DRC Côte d'Ivoire 10 Cameroon Controlled Uganda Zambia 2,7 5 2,2 1,2 inflation 1,6 Zimbabwe Botswana 0 Senegal Mali 2000 - 2004 2005-2009 2010 - 2017 1995 - 1999 Gabon Mauritius Burkina Faso Unemployment Rate (%) Chad Urban National Madagascar Relatively low 40 Namibia 22,0 Mozambique 13,9 14,2 12,7 Equatorial Guinea unemployment 20 10,2 8,2 Benin Guinea 0 Rwanda 2010 1999 2017 Congo Niger South Sudan FDI Stock ( in Billion MAD) Eritrea 750 Malawi 590,0 Mauritania 500 Togo Rising FDI 319,0 Swaziland 192,0 Sierra Leone 250 123,0 Burundi Liberia 0 2017 2005 2008 2012 Lesotho Djibouti CAR Cabo Verde Gross Public Debt (% of GDP) Seychelles Somalia Control of Public 100 73,7 Comoros 65,1 54,6 Guinea-Bissau Debt 50 Gambia Sao Tome and Principe 0 - 100.000 200.000 300.000 400.000 500.000 2007 2000 2017 Source: IMF, HCP, Office des Changes, UNCTAD Source: UNCTAD

Main foreign investors FDI stock in Morocco by country (million dirhams*) Country 2014 2015 2016 2017 169.104,1 172.334,5 193.837,7 207.161,9 France Total FDI stock in Morocco end 2017 was 590 billion dirhams (54 billion ▪ 88.664,1 97.138,8 121.970,3 125.529,6 UAE euros) 47.382,0 48.919,2 48.731,2 50.022,2 Spain 22.488,0 26.152,7 27.462,7 29.818,0 USA Largest foreign investor in Morocco is France followed by UAE and Spain ▪ 15.532,3 15.505,7 20.131,8 21.722,4 UK 15.613,9 17.803,5 18.947,0 20.543,0 Saudi Arabia The Netherlands in the Top15 of largest foreign investors in Morocco ▪ 16.324,4 18.006,7 18.888,3 19.555,3 Switzerland 10.532,0 12.425,4 13.127,4 13.377,4 Germany 16.047,8 15.704,0 12.868,7 14.619,4 Belgium 11.533,9 11.955,1 11.799,1 11.680,1 Kuwait 7.348,3 8.399,7 10.140,4 11.426,2 The Netherlands 5.818,1 6.309,6 6.787,6 6.950,6 Italy 1.908,7 2.100,5 4.475,6 5.773,1 Singapore - - 198,0 3.665,7 Ireland 1.945,4 1.963,8 1.963,8 1.963,8 Libya India 1.380,1 1.557,8 1.636,8 1.764,8 2.418,2 1.545,9 1.504,9 1.457,9 Sweden 1.255,2 1.263,2 1.228,2 1.297,2 Tunisia 638,4 794,6 901,6 1.138,6 Portugal - - 893,8 1.117,4 South Africa 624,1 659,0 734,0 1.064,0 South Korea 561,5 561,5 603,5 639,5 Pakistan 585,3 585,3 585,3 585,3 Brazil 261,0 339,2 458,2 463,2 Japan 24.937,1 29.995,5 33.225,7 36.332,7 Other countries TOTAL +462.903,9 +492.021,3 +553.101,5 +589.669,2 Note: (*) including SFI’s (Special Financial Institutions) Source: Office des Changes

Main market trends Morocco

Low agricultural output leads to low economic growth rate Weather conditions influences agricultural productivity strongly Economic growth rate Morocco (%) 11,7 800 12 6,0 10,3 10,2 9,7 9,6 10 5,0 600 8,4 7,5 8 6,9 4,0 400 6 5,2 3,6 4 3,0 200 2 2,0 0 0 1,0 0,0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Cereal production (million tons) R-axis Rainfall (mm) L-axis Source: HCP Maroc Note: The agricultural season begins in September and ends in May of the following year Source: Ministry of Agriculture, HCP Maroc

Expectations business environment 2019 Lower expected economic growth rate in 2019 5,0 4,5 4,5 4,1 4,0 3 2,9 3,0 2,6 2,0 Expected lower inflation in 2019 compared to 2018 1,0 1,2 Inflation (%) 0,0 1,9 2013 2014 2015 2016 2017 2018 2019p 2,0 1,8 1,6 1,6 Note: (p) prognosis 1,5 Source: HCP Maroc 1,2 1,0 0,7 0,4 0,5 0,0 2013 2014 2015 2016 2017 2018 2019p Note: (p) prognosis Source: HCP Maroc

Main economic sectors Agriculture Fishery Tourism Retail Textile Construction & Real estate

GDP by main economic sector 2010 - 2016 100% 90% 38% 80% 41% 70% 4% 60% 3% 4% 3% 50% 11% 9% 7% 40% 7% 3% 3% Increasing importance of 4% 2% 30% manufacturing industry 15% 18% 20% 10% 15% 14% 0% 2010 2016 Source: HCP Maroc Agriculture & Fishery Manufacturing industry Mining Utilities Construction Trade Hotels & Restaurants Transport & Logistics Other services

Employment by main economic sector 2016 (%) 22,5 38 4,6 Agriculture largest employer 13,8 11,3 9,8 Agriculture & Fishery Industry Construction Trade Transport & Logistics Services Source: HCP Maroc

Morocco’s diverse manufacturing industry Total employment: 597 278 employees (2014) • Total turnover: 40 billion euro (2014) • Export value: 1.2 billion euro (2014) •

Great potential as international logistics hub Expanding foreign trade with Africa Total foreign trade Morocco by continent (%) 0% 1% 1% 1% 100% 80% 25% 25% 28% 28% Oceania 17% 15% 60% 19% America 20% 10% 8% 11% Asia 8% Africa 40% Europe 20% 46% 43% 47% 46% 0% 2010 2012 2014 2017 Source: Office des Changes

Increasing number of Moroccan companies investing in Africa Companies active in telecom, construction, trade, mining, finance

Investment opportunities in Morocco’s main cities

Morocco’s urban population will grow with 30% in the next 15 years By 2030 28 million people live in cities, 2/3 of total population Urban population Morocco 2000 – 2030 (% in total population) 80 68,7 70 66,2 63,5 60,8 58 60 55,2 53,3 50 40 30 20 10 0 2000 2005 2010 2015 2020 2025 2030

Urban challenges in Morocco Air pollution Urban logistics Waste management Youth unemployment Sewage systems Housing deficit Quality and quantity of public transport

Possible solutions to tackle urban challenges in Morocco’s main cities New bridge between Rabat and Salé

I. Large real estate development projects within cities Casa Anfa (building phase) New Casablanca Marina (building phase) Bank of Africa Tower, Rabat (250m) (building phase) Tanger waterfront development (including new marina) Casa Finance City (development phase)