It seems the drive to diversify the economy is not only being promoted in countries like Nigeria, due to the slump in oil prices, as Morocco is looking to extend its economic reliance beyond agriculture. The country’s Industry Minister, Moulay Hafid Elalamy has said French car maker, Renault, which operates the largest car factory in North Africa, is about to invest 10 billion dirhams ($1.04 billion) in Morocco to build an “industry ecosystem.”
It basically means that Renault will upgrade its production capacity from 32 percent to 62 percent in the country. Reuters reports that Morocco expects its auto industry exports to reach 100 billion dirhams a year by 2020 and this move will definitely speed up that process. However, Renault is not the only automobile company exploring its potential in the production of automobiles in the country.
According to the industry minister, Renault has made it possible for other companies to come and invest in the country by making component parts. “Renault ecosystem means that around Renault plants in Tangier and Casablanca, many other companies are coming to invest and make the parts that will shape a Renault car,” he said.
Aside from raising the country’s economy, the minister is also optimistic that the investment will create about 50,000 job opportunities for the country’s citizens, which answers the question of where the people at the grassroots fall into all these. “This strategic project alone will give Morocco 50,000 new jobs,” Elalamy maintained.
Morocco, which prides itself as an export base for Europe, the Middle East and Africa, is currently upping the ante for all other African countries in terms of foreign direct investments (FDIs) as they continue to host various projects. They do this regardless of challenges met by a lot of its counterparts over terrorism and low or non-existent economic structures. For instance, in February 2016, the government head, Abdelilah Benkirane, said Morocco’s foreign direct investments (FDIs) recorded a 15 percent increase yearly between 2010 and 2015, moving from 13.3 billion dirhams to 31.1 billion dirhams. That is to say the country attracted 31 percent of FDIs in North Africa in 2014 compared to only 12 percent in 2010.
Although Morocco has a few strong points like a favorable legal framework and assistance measures for foreign investors and a favourble geographic location, as Europe is not to far away from it, only 3 hours apart. There have been challenges bordered on the fact that Morocco is still quite dependent on agriculture and is particularly vulnerable to the prices of hydrocarbons.
Regardless of these challenges, it is clear that Morocco has no intention of slowing down its economic growth through FDIs. According to Financial Times, the country recorded a high percentage of FDIs in 2014, including $2bn investment in its renewable energy sector by Shanghai Electric, which planned to establish five photovoltaic power generation facilities in the country.