Morocco: Vietnam’s big partner in Africa

26/03/2021 1673

What are the main characteristics of the Moroccan market of interest to investors? What are the Moroccan market policies that can convince investors?

The attractively of Morocco make it the 2nd FDI destination in Africa for several reasons:

As you should know, Morocco stands out as a model of political stability in its region, thanks to the structural reforms undergone under the leadership of His Majesty the King.

Its stable macroeconomic performances and its exceptional geographic position make Morocco a regional production and investment hub open on the African, North Atlantic, Arab-Mediterranean and European spaces, representing a market of over one billion consumers. The proximity of these markets and the availability of a qualified workforce are factors that favor choosing Morocco as an investment destination.

In addition, the rate of the market opening is at 62% and the legal framework regulating FDIs which grants the same incentives given to domestic investors are yet another stimulus, mainly the possibility to repatriate profits, dividends and capital investments. Also, the time required to set up a business is among the shortest in Africa. Besides, the country offers a world class infrastructure, highways, ports and airports, as well as a high performance communication and telecommunication systems.

Moreover, Morocco adopted sectoral plans that have reinforced its FDIs attractiveness, including the “Industrial Acceleration Plan” aiming at speeding up the development pace of the industrial sectors, mainly the automotive, aeronautics and electronics industries ; the “Development Plan” of the textile and clothing sector in which Morocco has become co-contractor ; the “Vision 2020” of the tourism industry, an important engine of economic and social development in Morocco ; the “National Energy Strategy” which aims at reaching 52% renewable energy by 2030 ; the “Halieutis Plan” for the sustainable exploitation of fishery resources ; the “Digital Morocco” project to place Morocco at the top 3 countries in the MENA region in terms of Datacom infrastructure and IT business environment through the training of 30.000 digital experts by the year 2020.

Finally, Morocco has signed a wide range of preferential and Free Trade Agreements giving access to a market of over one billion potential consumers.

What are the similarities between the Moroccan and Vietnamese markets? What are the cooperation possibilities between the two countries to strengthen bilateral trade?

Morocco and Vietnam have an enormous potential to spur increased trade, thanks to the positive evolution of their bilateral relations over the past years, especially after the successful visits to Vietnam by the Secretary of State Ms Mounia Boucetta in April 2018, and by the President of the House of Representatives M. Habib El Malki in December 2017, as well as the visits to Morocco of High Level Vietnamese officials, including the President of the National Assembly of Vietnam Ms Nguyen Thi Kim Ngan, in March 2019, and the Secretary of the CPV M. Vo Van Thuong, in June 2019.

The geopolitical similarities between Morocco and Vietnam, respectively as entry gates to Africa and Europe and to South-East Asia, the new dynamic enjoyed by their emerging economies, their sustained economic growth and their policies of diversification of trade partners and of human resources capacity strengthening are all factors allowing for further cooperation and coordination in the future.

In order to meet the aspirations of the two countries at more trade and economic partnerships, there is a need to adopt a new approach favoring direct interaction between the Vietnamese and Moroccan economic stakeholders. The establishment of a Morocco-Vietnam Business Council would contribute to spur trade and economic exchange between the two countries.

A Trade Agreement was signed recently between the Ministry of Industry and Trade of Vietnam and the Ministry of Industry, Investment, Trade and Digital Economy of Morocco in order to promote cooperation in numerous fields of shared interest, mainly renewable energy, textile, clothing, electronic and mechanical industries, chemical industry and fertilizers production.

Another MOU between the two Ministries in charge of commerce was also signed recently, establishing a sub-committee on trade and industrial cooperation with the mission of promoting bilateral trade and supporting the SMEs through the implementation of measures identified to this end. The organization of Business Fora and the promotion of tourism and cultural exchanges should favor more mutual understanding as well as a growth and diversification of bilateral trade.

Which Vietnamese products can potentially be exported to Morocco and What Moroccan products can potentially be exported to Vietnam?

The identified products with high potential for export include coffee, pepper, dates, olives, seafood, textile and clothing, shoes, fibers, mobile phones and components, electronic equipment, pharmaceutical products and phosphates.

The exchange of experiences, joint ventures and technology transfers remain a must for an increase of trade through a strengthened bilateral cooperation.

Can Morocco become a cooperation bridge between Vietnam and other Arab and African countries?

Morocco has always pleaded for the development of a regional Arab cooperation and initiated the Agadir Agreement, a Free Trade Agreement that brings together Morocco, Tunisia, Egypt and Jordan.

Signed in 2001, this Agreement seeks to increase trade between the signatories, to boost economic growth and attract more FDIs. Since its signature, this Agreement helped Morocco increase its exports to the other signatories by 50%.

Morocco is also bound by a multidimensional strategic partnership with GCC countries. This partnership has given a real impulse to the development and diversification of relations between the two parties. In this regard, the share of the GCC countries in FDIs has increased from 11.8 to 27%, and from 5 to 8.7% in tourism revenues.

Regarding Africa, Morocco has placed its home continent at the top of its development priorities.

Under the guidance of His Majesty The King, Morocco adopts a strategic diplomatic approach with the main objective to develop partnership models with various African countries based on the concepts of co-development, South-South solidarity, and a strong social and human dimension.

Thanks to this Royal Vision, Morocco is today the 1st investor in West Africa and the 2nd investor at the continental level.

Morocco enjoys a substantial multiform presence in Africa in vital sectors such as banking, insurance, energy, telecommunications, etc.

Also, Morocco undertakes various partnerships and capacity development actions in priority areas such as water, sanitation, customs, airports management, etc.

The impressive growth rate and the growing demand in Africa have made it a competition field between the numerous powers seeking to gain a foothold in this continent. Morocco and Vietnam can work together in Africa, including trough joint-ventures projects, trilateral technical and economic cooperation, just like the current initiatives carried out by Morocco with other Asian countries such as Japan, China and South Korea.