ISSN 2330-717X

The Tale Of Morocco In ECOWAS – Analysis

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On January 31, 2017, Morocco officially returned to the African Union (AU) after thirty-three years of absence. The late King Hassan II made the decision to withdraw from the organization after the Sahrawi Arab Democratic Republic (SADR) was recognized as a full member state of the Pan-African organization although Morocco considers Western Sahara as its “Southern Provinces”.

Mohammed VI, who succeeded his father in July 1999, seemed to understand that the absence of the kingdom at any meeting of the AU was done to the detriment of both its strategy against the Algerian lobby and the Polisario and its ambitious strategy to make Morocco the main economic propeller of West Africa and, perhaps, of the continent as a whole.

It is in this context that Morocco applied for membership of the Economic Community of West African States (ECOWAS), just three weeks after it returned to the AU. Meeting in Monrovia, Liberia, in June 2017, the Heads of State and Government of the ECOWAS gave their agreement in principle to the integration of the Kingdom of Morocco, which already has the status of “sovereign observer” in the regional organization, pending the results of a first impact study. The final decision was eventually postponed indefinitely.

Location of the Economic Community of West African States (ECOWAS). Credit: Wikipedia Commons.
Location of the Economic Community of West African States (ECOWAS). Credit: Wikipedia Commons.

Much has been said and written about the Moroccan bid, the supporters praising the benefits of such an integration while opponents point out its somewhat obvious fouls. The idea, enlightened for some, absurd for others, deserves to be analyzed through another lens than that of geography, arguments that we find, here and there, under the pen of critics opposed to such a membership (granted, Morocco does not belong to the Western regional economic community as defined by the African Economic Commission; however, its name in Arabic (Maghreb / مغرب does mean “the West”…)

In this article, we propose to explore Morocco’s relations with its West African neighbors, to determine the ins and outs of such a membership and to ponder the opportunities and threats associated with it, bearing in mind that, despite the existence of regional, continental or international organizations, it remains a fact that every state, without exception, always pursues objectives that must ensure its national interests.

Morocco-West Africa: What Relations?

The political, cultural and commercial ties that bind Morocco to its West African neighbors are known to anyone versed in the history of the continent. Although the European Union (EU) remains Morocco’s main trading partner[1], the Kingdom has greatly intensified its diplomatic and economic relations with West Africa in recent years.

The trading dynamics do remain relatively low[2] when compared with those of other regions of the world. However, Morocco has expressed its firm intention to reverse this trend by signing trade agreements with many sub-Saharan African countries[3] and trade has dramatically increased in the past years (i.e.: + 13 per cent in 2014 according to the African Development Bank). In addition, many infrastructure projects between Morocco and West African countries are currently under way and demonstrate a mutual willingness to strengthen diplomatic and trade relations[4].

Why Is Morocco Turning To Africa?

After several years spent trying to strengthen relations with the EU and the United States through the signing of free trade agreements, Morocco eventually understood that it had chosen the wrong strategy and perhaps the wrong partners to ensure the growth of its economy. Indeed, after the integration of some former Republics of the Soviet Union into the EU, Morocco was no longer the privileged destination for delocalization of European companies. Similarly, at the beginning of the century, Morocco began facing increasing competition from low-cost textile producers in Southeast Asia. Its economy was also significantly affected by the 2007 economic crisis because of its excessive dependence on tourism, trade, remittances and foreign direct investment (FDI) from the economies of Southern Europe.

Morocco thus came to the logical conclusion that it needed to find other partners to ensure its growth. When turning to sub-Saharan Africa, Morocco aspires to reduce its dependence on Europe and to offer its companies the opportunity to compete in new emerging markets. By intensifying its relations with its sub-Saharan partners while maintaining cordial relations with Europe and the US, the Kingdom of Morocco also aspires to eventually become the main hub between Europe, America and Africa and thereby strengthen the competitivity of its main industries: transportation, financial services[5] and agrochemicals.

And it seems that this strategy is already bearing fruit: in 2018, the Africa Investment Index ranked Morocco first on the list of the most attractive countries for FDI directed to the continent, ahead of South Africa, sixth on the list.

Not only does Morocco attract the most FDI but it is also the second-largest investor on the continent behind South Africa, a position it has acquired in just a few years. By joining the ECOWAS, Morocco would not only carve out a place of choice to counter the diplomatic influence of Algeria and the Polisario Front in the Western Sahara conflict but would also offer its companies easy access to abundant natural resources, cheap labor and a market of no fewer than 320 million consumers whose socio-economic needs are too poorly met.

The Road To ECOWAS: Not The Expected Long, Quiet River

ECOWAS Bank for Investment and Development headquarters in Lomé, Photo Credit: Willem Heerbaart, Wikimedia Commons
ECOWAS Bank for Investment and Development headquarters in Lomé, Photo Credit: Willem Heerbaart, Wikimedia Commons

Through its numerous declarations and its lobbying activities, Morocco has demonstrated its eagerness to join the community (the kingdom even claimed that it would not hesitate to abandon the dirham to adopt the ECO, the common currency on which the ECOWAS has been working for several years[6]). Nevertheless, Morocco’s application was not welcomed smoothly. While heads of state and government have been more or less enthusiastic, representatives of civil society and some financial groups, particularly in Nigeria and Senegal, have expressed reluctance, saying that the Moroccan membership would hurt the national industries. Despite the validity of the Moroccan bid, there are undoubtedly some pitfalls, even some contradictions that we propose to analyze in the following paragraphs.

1. The Common External Tariff

The Moroccan initiative seems to be in perfect harmony with the country’s African strategy.

However, a more in-depth analysis of the situation leads us to question the work done by Moroccan analysts before embarking on the “Ecowasian” adventure. If Morocco were to join the ECOWAS, it would be compelled to accept all its rules, including the obligation to apply a common external tariff, which is meant to protect the local economies from international competition. Since 2000, Morocco has been linked to the EU by an Association Agreement establishing a free trade area between the two parties.

Since 2013, the country’s authorities have even been negotiating an EU-Morocco Deep and Comprehensive Free Trade Area. Rabat also signed a similar agreement with the United States in 2004.

However, if it were a member of the ECOWAS, Morocco would be unable to meet the requirements of its new membership while respecting the obligations imposed by the two free trade agreements mentioned above. In addition, the application of a common external tariff, and the idea of protectionism that it underlies, would contravene with the Moroccan ambition to become the main commercial hub between Europe, America and Africa.

2. New Migrants

For several years now, Morocco has been facing an unprecedented wave of migration originating from sub-Saharan Africa. Most of these economic migrants aspire to reach Europe via Ceuta or Melilla, European enclaves on African soil.

Although the Moroccan government regularized several thousands of them willing to remain in Morocco to enjoy living conditions relatively more favorable than those in their countries of origin, it is unlikely that this economic migration will be absorbed in its entirety by the Moroccan labor market, which is already struggling to offer job opportunities to its own youth (the youth unemployment rate in urban areas peaked at 42.8 per cent in 2018).

The free movement of people that would follow the integration of Morocco into the ECOWAS may therefore cause a new wave of migration and potential new social trouble.

3. Savings Outflows And Social Unrest

The majority of Moroccan FDI are directed to sub-Saharan Africa, with Mali, C√¥te d’Ivoire and Senegal being the three main beneficiaries. However, these outflows of national savings to some ECOWAS countries have as immediate corollary a decline in investment and job creation in Morocco itself at a time when the country is faced with an unprecedented unemployment crisis and embarked on ambitious local infrastructure projects.

Morocco should thus encourage FDI from ECOWAS countries to ensure a rebalancing of investment flows in the region and avoid potential social unrest that could arise from the feeling of being neglected in favor of industrial growth encouraged by Moroccan investments in foreign economies.

4. Increased Security Risks

Although there are undeniable opportunities to be seized in West Africa, Morocco would also face increased risks if it were to be admitted as a full member because of the instability of the area. More than half of the ECOWAS member states have experienced armed conflict over the past two decades.

Nigeria is currently facing serious security problems embodied by the terrorist group Boko Haram. Similarly, Mali and Niger have experienced many troubles during the past few years. In such a context, integrating a regional organization that, despite its potential, remains fragile, seems unreflective or at least premature.

Conversely, this risk stands as an opportunity for the ECOWAS. Indeed, by integrating the organization, Morocco would bring its military expertise and the equipment of its army, essential assets in times of conflict.

The Arguments Of West African Opponents: Counter-Arguments

Many West African analysts have looked into the Moroccan bid to expose its least favorable outcomes. However, we believe that many arguments, including the most often used ones, can be easily opposed.

1. The End of Customs Duties and its Financial Impact

By integrating the ECOWAS, Morocco would no longer be compelled to pay customs duties on its exports to and imports from West African countries, which would lead to a revenue shortfall for the organization, especially if we consider that Morocco exports more to West Africa than it imports from the region.

However, this shortfall, although obvious, would be offset by the financial contribution of Morocco: members of the organization must contribute 0.5 per cent of the value of their imports to the organization’s budget. At a time when Nigeria is facing an economic recession due to the decline in oil prices, such a financial contribution would obviously be welcome.

2. A Reshuffle in the Game of Influence

Nigeria, Ghana, Côte d’Ivoire and Senegal are the main economic, and hence political, locomotives of the regional organization. Morocco, with a GDP of more than USD 100 billion, would be ranked second on the list of the most influential states behind Nigeria, which has been losing ground since the collapse of oil prices, and potentially reshuffle the cards in the game of regional influence. The kingdom would thus bring about a certain rebalancing of forces if one considers that Nigeria alone represents half of the population of the organization and half of its wealth.

3. The Destabilization of West African Industries

Some economists, opponents to the Moroccan membership, argue that the accession of Morocco could harm the nascent West African industries. According to them, the kingdom, which already imports more than half of its goods from the EU at preferential rates, would take advantage of its membership to flood West African markets with European industrial products. According to the Nigerian economist Falana, the EU would thus gain access through its Moroccan partner to the West African markets, which it has been trying to conquer for several years through the always-postponed signature of a partnership agreement with the ECOWAS.

However, such a scenario is, we believe, rather unlikely. Why? Morocco is bound to the EU by an association agreement establishing a free trade area. However, if it were to integrate the ECOWAS, the kingdom would have to agree to the common external rate mentioned above. Its obligations under such an association agreement and those that would stem from its ECOWAS membership are mutually exclusive. Morocco should either leave the association agreement, which seems unlikely, or negotiate specific derogations from the ECOWAS, which seems unlikely too. Rabat would therefore need to consent to certain concessions.

Conclusion

Although the Moroccan bid is often presented as a one-way street where the kingdom reaps all benefits while the West African states lose everything to their Northern neighbor, we have shown that there are both opportunities and risks for all parties in the “ECOWASION”. However, before being fully admitted into the organization, Morocco will have to resolve the many contradictions that would result from its integration and, so far, few Moroccan analysts have explored these issues head on. The accession of the kingdom to the organization is a critical question whose numerous repercussions will not only impact the economies but also the entire populations on both sides of the Sahara. The Moroccan membership should therefore be subjected to a national debate involving all stakeholders in order to devise a common vision that would benefit all parties and minimize, if not annihilate, any risk of regional implosion.

About the author:

*Jihan Chara is a former political adviser on the Middle East and North Africa to the European People’s Party (EPP). After a work experience at the BBC, she started writing more extensively on issues pertaining to the Middle East and Africa. She holds a double Masters in Arabic Studies and Business Administration.

Notes:
[1] In 2017, 64.6 per cent of Moroccan exports went to the Old Continent while the EU accounted for 56.5 per cent of its imports.
[2] The trading volume does not exceed USD 1 billion while the GDP of the area is set at USD 675 billion. In 2014, sub-Saharan Africa accounted for only 6 per cent of Moroccan exports and less than 1 per cent of its imports. The trade balance is therefore in favor of Morocco.
[3] Despite the agreements, tariffs applied to imported products from non-Mediterranean African countries are higher than those applied to products from North America, Europe or the United States, whatever the category of goods.
[4] These include the investments of Maroc-Telecom, which operates in several sub-Saharan countries through its subsidiaries (Mauritel in Mauritania, Onatel in Burkina Faso, Gabon-Telecom in Gabon and Sotelma in Mali); Nigeria and Morocco have agreed on a gas pipeline project to bring Nigerian gas to Morocco and Europe while Casa Finance City was devised to serve as a financial hub to attract international private investment directed to Africa as a whole.
[5] Three Moroccan banks (i.e.: Attijariwafa Bank (AWB) with its 13 sub-Saharan subsidiaries, Groupe Banque Centrale Populaire (BCP) and the Banque marocaine pour le commerce extérieur (BMCE) and its 19 subsidiaries on the continent) are already well established on many West African markets and act to facilitate Moroccan investments in the region.
[6] However, Marcel De Souza, President of the ECOWAS Economic Community Commission, announced in late 2017 that the common currency would not be put into circulation in 2020 as initially planned, saying that the integration work, despite significant progress in macroeconomic convergence, remains insufficient.


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