Morocco set to benefit from Post-Coronavirus European investment relocation

The advent of the coronavirus pandemic has exposed European manufacturers to the risk of over-reliance on China’s supply where many firms were tempted by low production costs and skills. Morocco Stands to benefit from this restructuring, building on its competitive assets, infrastructure, competitive wages and skilled workforce, the Oxford Business Group and a DW report recently said.

 

“There is a shift under way that is redesigning how industrial centers are distributed throughout the world. Over the years, the competitiveness of China saw companies worldwide cede a share of their production to their Asian counterpart. However, this dependency is increasingly being scrutinized by the US and countries across Europe,” Moroccan industry minister Moulay Hafid Alamy told the Oxford Business Group.

Morocco positions itself as “a complementary manufacturing platform” and throughout the years, it has demonstrated itself as a “strategic partner” for world industry giants such as Boeing, he said.

“Our strategy is to continue to boost the competitiveness of Morocco and establish a carbon-free industrial base with domestic renewable energy generation,” he added.

As major EU industrial countries seek to boost autonomy and bring supply chain closer to home, Morocco stands as one of the most if not the most competitive country in the southern neighborhood.

Only China and India outperform Morocco, Alamy said, adding that the kingdom is bringing its competitiveness level closer to that of India.

Morocco has opted for environment friendly policies. It stands as a “frontrunner and the EU tries to chip in on that,” Guillaume Van Der Loo of Brussels-based think tank Center for European Policy Studies told German broadcaster Deutsche Welle (DW).

“The idea that the European Commission has already expressed about diversifying supply chains could be beneficial for Morocco and that could accelerate negotiations on the new trade agreement,” he said.

Stability

“Morocco is very well positioned because of its proximity, because it’s part of EU’s regional trade agreements, its rules of origin are kind of integrated with those of the EU,” UNCTAD’s Alessandro Nicita told DW.

As an island of stability in a turbulent North Africa, Morocco is set to build on its free trade deals and vibrant market economy to attract more investments.

“Its burgeoning economic and commercial links, especially with the EU, massive investment in infrastructure, and incentives such as tax breaks and free plots of land have seen it emerge as a leader in attracting foreign direct investment in Africa, with France leading most of the investment in 2018,” DW said in its article titled “China’s economic loss could be Morocco’s gain”.

The North African country has for decades launched an industrial cluster strategy luring aeronautical, automotive and pharmaceutical industry giants.

“Morocco could see increased investment into Renault’s local supply chain as the OEM looks to restructure its operations to focus on its core markets (such as Europe and Africa-Middle East), which places Morocco’s automotive industry in a strong position to capitalize on this restructuring plan due to its proximity and trade ties with Europe, Africa and the Middle East,” DW cited an analyst as saying.

Besides, the country’s larger and cheaper labor force is expected to give it an edge over central and eastern European (CEE) countries.