Everybodys 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.
But there 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.
Moroccos 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
South Africa 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
Morocco has a history of favouring French companies. Will other
international companies be able to compete on a level playing
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
Since 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
Morocco is 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.
In comparison 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.
What practical advice would you give to companies looking to
invest in Africa?
Tackling the 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.
We are 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
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?
Yes our 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
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
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
What impact 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 European countries.
Within 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
What questions are people coming to you with about investing in
Africa, especially using Morocco as a gateway to the rest of
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
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 CFC.
If investors know more about Morocco they will see that they
can invest from Europe or from North America or China directly