Euro Crisis Forces Morocco To Look For New Markets

By Siham Ali

Morocco just concluded a flurry of trade deals with the European Union. Given Europe’s recent financial hurdles, however, Morocco may start vying for new markets.

Morocco’s free trade zone with the EU for industrial products became effective on Thursday (March 1st), less than a fortnight after Morocco and the European Union approved an historic trade deal lifting agricultural and fish export tariffs.

The 27-member bloc also remains the kingdom’s biggest trading partner (59%), well ahead of Asia (21%) and America (13.5%), and Prime Minister Abdelilah Benkirane has vowed to maintain the long-standing partnership.

Benkirane also recognises the need for diversification.

Minister for Moroccans Living Abroad (MRE) Abdellatif Maazouz said in January that the euro crisis would pose a threat to Morocco over the coming years but warned against being overly pessimistic.

“It also offers opportunities if we can boost our export market shares, foreign investment and tourism in our traditional markets while also exploring new nearby markets, including the Middle East and sub-Saharan Africa,” he said.

Entering other markets is essential for Morocco, according to economist Hicham Madouji. The country needs to look for new export markets as the European economies, which are Morocco’s biggest export customers, have yet to recover from the crisis, he added.

“The Maghreb is affected by the repercussions, though in contrasting ways. According to some analyses, the shockwaves will be felt more strongly in Morocco and Tunisia than in the oil-producing countries, Algeria and Libya,” General Confederation of Moroccan Companies (CGEM) chief Mohamed Horani said on February 2nd.

The kingdom should make the most of its geographic location by opening up to other countries in the Mediterranean and the Gulf, he said, but at the same time open up more towards America and Africa.

Dynamic sectors such as banking, finance and telecoms offer real potential for all Moroccan companies. Moroccan firms are making their presence felt across Africa, and several banks have assumed a high profile in a number of African nations. This has helped to burnish Morocco’s image as a retail banking leader, argued the CGEM head.

If Morocco is to make inroads in both established and emerging markets, it needs to diversify its exports. According to the CGEM, the products offered by Moroccan manufacturers are still poorly diversified by comparison with the opportunities offered by foreign markets. Morocco exports 42 products per million inhabitants, as compared with 130 for Tunisia and 160 for Malaysia, according to the World Bank.