Despite the many instabilities that are affecting the majority of its neighbours, including some European ones, Morocco is fast becoming one of the best emerging markets for investment. Over the last decade, Morocco has witnessed an accelerated process of political, economic and social reforms, and its steady economic growth and strategic geographic position make it an investment opportunity well worth considering.
One of the country’s main attractions is its stable economy. Despite a decade of difficulties, including the global financial crisis, the 2011 Arab uprisings and prolonged weakness among its European trading partners, Morocco has maintained economic stability;
It was the only Arab country exposed to the Arab spring that qualified for a precautionary credit line from the IMF, a testament to its stability. Economic growth has averaged 4.9% in the past five years, while inflation has stayed below 2%, and in the World Bank’s 2012 Doing Business Report Morocco climbed 21 places to 94th, in the world, the highest improvement of any country.
As a testament to the country’s economic potential, several multinational companies have moved all or part of their production to Morocco. In 2012, Renault opened the biggest car factory in North Frica in Melloussa, a town near Tangier, producing cars under the Dacia brand for emerging markets. Similarly, in February 2013, Bombardier Aerospace announced that it was shifting production of components such as flight controls for its CRJ series airliner to a transitional facility at the Mohammed V International Aiport in Nouaceur, near Casablanca. Other international corporations including Delphi, Dell and GDF Suez have followed suit and undertaken major investments in Morocco. Reasons for this include the low minimum wage in Morocco, set at around $1.25USD an hour and banking benefits encouraging companies to do business in Morocco, including a relaxation of the strict convertibility regime of the Dirham for foreign investors.
Redevelopment and tourism
Morocco as a whole has undergone a huge redevelopment in the last decade, largely started by King Mohammed’s Vision 2020. This aims to double the size of the tourism sector and transform Morocco into one of the world’s top 20 tourism destinations by 2020. Two of its main ports, Agadir and Tangier, have already undergone major redevelopment; in March it was announced that this will continue with the Wessal Casablanca port project. This has been backed by five key shareholders that include the Moroccan Fund for Tourism Development and four sovereign wealth funds; as well as hugely enlarging and modernizing the port, the development will also focus on cultivating tourism, including improvements to passenger cruise terminal facilities and seafront upgrade work.
In 2008 Morocco invested nearly £9bn in improving its infrastructure, and now has one of the best road systems in North Africa.
Traditionally, Marrakech has been the place for foreign property investment. However, Agadir’s redevelopment makes it an up-and-coming place to buy, as well as the benefits of being on the coast; similarly, new apartments are springing up in the surfing town of Taghazout.
In 2007, the Government of Morocco entered into a development agreement to develop Chbika, an integrated self-sufficient tourist destination in the south of Morocco. Among the planned components are 8 hotels with a capacity of 2,500 guest rooms, 1,166 apartments and 685 villas, and atmospheric riads.
Property investment in Morocco has great financial benefits; Morocco is one of the only countries that you can still expect to get between 15% and 25% return on investment and property prices are up to 50% lower than that of other European resorts. There is also 0% annual property tax for your first five years; Morocco is clearly starting to become a very attractive tourist destination and therefore a sound place for property investment.
By Miranda Wadham