talking about Africa. People in the know are saying its the place to invest,
and the emerging market of the future. It has a working age population that
will outnumber China and Indias by 2030, massive infrastructure needs and
abundant natural resources.
are also abundant pitfalls that foreign firms can fall prey to - not least the
fact that it is made up of 53 countries, each with its own legal system. There
are numerous questions around how to tap these fragmented markets that hold so
much potential. No country seems more attuned to this fact and how to exploit
it - than Morocco.
heritage is certainly unique. It is a hybrid of Arabic and western values, 40
years of French occupation have left it with a more liberal outlook than other
Islamic countries. But it also has strong ties with other African countries,
through nine double taxation treaties, 17 investment promotion and protection
agreements and seven financial cooperation agreements. In the last two decades
Morocco has made sweeping reforms to its financial markets, as a result of
which its banking and insurance sectors are in much better shape than many
other countries in the region.
Here Hicham Zegrary opens up about the opportunities, and challenges,
presented by investment in the region.
Why do you
think Morocco should be North Africas financial centre?
has a huge financial centre and Egypt, at least before the Arab Spring, was the
regional finance hub in the east of Africa. But North and West Africa have no
financial hub to act as a regional international business centre.
In the last
two decades Morocco has made huge reforms to its financial markets. As a result
of these, we now have very strong banking and insurance systems. Our banks have
headquarters in some of the sub-Saharan countries and we have a very strong
historical relationship with these countries, particularly the French-speaking
countries, Senegal, Gabon and Cameroon. So the idea was proposed to establish
Morocco as the new regional centre for North-West Africa.
bank in Africa outside South Africa is Moroccos Attijariwafa Bank. Thanks to
quick growth outside of its home market into countries such as Burkina Faso,
Côte dIvoire, Mali, Mauritania, Tunisia and Senegal it is now the biggest
lender in West Africa and the Maghreb.
a history of favouring French companies. Will other international companies be
able to compete on a level playing field?
France has a
strong relationship with Morocco. But our official language is Arabic. In the
administration we speak both Arabic and French, but more business is conducted
in French than Arabic. And France is now the first investor in Morocco.
gaining independence, however, Morocco has made great efforts to liberalise its
economy and financial sector. We also have a good relationship with other European
countries, especially Spain and Italy. In northern Morocco people speak Spanish
and we also have a strong historical relationship with Spain.
making big efforts to look outside of its usual European relationship and
recently a Moroccan trade delegation travelled to Saudi Arabia to drum up
business. Although the CFC was not involved in this, an increasing number of
countries from this region, especially Saudi Arabia, Qatar, Bahrain and the
UAE, want to do business in Morocco.
with other countries in the region we have political stability. After September
11 2001, Arab investors in the Middle East found it
difficult to invest in the US. As a result they looked for somewhere they could
put their money that would be easier and without the cultural problems that
followed these terrorist attacks. Morocco offered them a good alternative as a
peaceful, relatively open country with a liberalised economy.
practical advice would you give to companies looking to invest in Africa?
regions fragmented market, made up of countries with different legal systems, is
a big issue. And its why companies should first open activities in Casablanca
and use the CFC as a stepping stone. We think that Casablanca is a safe
platform that companies can use to open and do business with countries with
legal systems that are not as well established as Moroccos is now.
working with the Ministry of Foreign Affairs and the Ministry of the Economy
and Finance to have legal conventions, such as a Double Taxation Convention and
conventions to protect foreign investors. Morocco has signed a lot of these
with African countries. We are looking to enhance those conventions, those
relationships between international law, our central banks and other key actors
in the African sub-Saharan countries.
Is there an
issue with the perceived north-south divide and the fact that people seem to
see Morocco as having stronger ties to the Middle East than Africa?
business relationship with the African sub-Saharan countries is not as good as
our political and relationship historically has been. But we are now looking to
strengthen these ties.
We began in
2000 with the banks, by doing business with these countries, opening
subsidiaries and hiring people from sub-Saharan Africa to work in the banks
headquarters in Casablanca.
So yes, the
general view has been that we are more of a European than an African country
because of our links with Europe. But we are making efforts to build bridges
with Africa now.
do you think the Eurozone crisis will have on investment in the region?
For us its
a big opportunity because we know that the major companies in the financial
sector are looking for opportunities in other parts of the world, beyond Europe
and the US. These opportunities are not only in the Brics [Brazil, Russia,
India, China], but Africa as well, which are geographically not far for the
CFC we meet European clients in the financial sector and they say to us that
Morocco - and Africa in general - will be the major player to do business with
this century. After the economic and the sub-prime crises its very
difficult to do business in Europe. When we see the annual GDP [gross domestic
product] of Spain, Italy, Greece, even Germany, and we compare it to other
countries in Africa, the difference is striking.
questions are people coming to you with about investing in Africa, especially
using Morocco as a gateway to the rest of Africa?
A lot of
investors dont know about Africa and Morocco. For investors even those from
France with whom we have a strong relationship Morocco is a part of the
Maghreb region and because of the Arab Spring their appetite to invest has
But we have
made a big effort to show the world that Morocco is a very specific country in
this region. We are a modernised and open country. We have got through the Arab
Spring smoothly and our King introduced reforms in the constitution of July
2011. We have also democratically elected a new Government which
is very involved in financial market
reform and generally supports
know more about Morocco they will see that they can invest from Europe or from
North America or China directly into Africa.