Emerging Markets – Opportunities & Threats: Morocco
by Sterling J. Scott, Marketing Communications Coordinator, MHI | @mhi_sterling
Opportunities
Morocco and the European Union just wrapped up five days of trade talks on the proposed Deep and Comprehensive Free Trade Agreement (DCFTA). Morocco’s economy grew almost 5% on average from 208 through 2012 and foreign direct investment increased 3% from 2011 to 2012.
The country is also experiencing healthy population and GDP per capita growth, making it a more attractive destination for investment with the growing consumer population. The growing consumer population will continue to drive demand for products especially from Europe.
With this growing demand, there will be mounting pressure on companies to meet it. Furthermore, it’s position as the closest African country to Europe makes it an important country for transporting goods into West Africa.
The United States and Morocco have a long-standing free trade agreement.
Threats
Morocco is very reliant on oil imports to supply around 97% of the country’s energy needs. The country’s economy is very sensitive to fluctuations in oil prices.
National leadership is developing plans to increase renewable energy use; however, it is a long-term initiative that has yet to manifest itself in infrastructure development.
Corruption also presents a problem in Morocco, mainly affecting pubic procurement where bribery and favoritism are not uncommon.
Conclusion
Morocco’s large and growing market as well as position as the gateway between Europe and Africa present great opportunities for firms interesting in entering this market. Furthermore, the country has the infrastructure to handle greater development in regard to transportation, energy, and telecommunications.
Morocco is primed for greater growth and a position as one of the world’s next great emerging markets. Companies interested in investing in Morocco should have the analytics capabilities to respond to fluctuations in oil prices and detect supply chain risk.
More information on supply chain trends, recommended strategy, and innovations that drive supply chains are available in the 2014 MHI Annual Industry Report which can be downloaded at www.mhi.org.
