AS AFRICA’S FIFTH-LARGEST ECONOMY, with a GDP per capita of over USD3,000, Morocco is no economic minnow. Over the past 32 years, megaprojects and initiatives such as the Tangier-Casablanca High-Speed […]
AS AFRICA’S FIFTH-LARGEST ECONOMY, with a GDP per capita of over USD3,000, Morocco is no economic minnow. Over the past 32 years, megaprojects and initiatives such as the Tangier-Casablanca High-Speed Rail Line, the Casablanca Marina, the Noor-Ouarzazate complex, Tanger Med, the Mahdiyya Renewable Energy City, the Moroccan Rural Electrification Program, and the National Initiative for Human Development have transformed Morocco’s urban centers and rural areas alike. Modern infrastructure development has been central to this transformation. And while the economy has somewhat slowed down in recent years, the construction industry continues to experience a period of boom, supported by national infrastructure plans. In fact, Moroccan construction companies have maintained steady growth in the face of several local and international issues. The government invested more than USD15 billion in infrastructure between 2010 and 2015, and as of mid-2018, there were more than 200 active construction projects with a combined value of USD49.8 billion. When it comes to transport, it is no secret that Morocco has one of the best road networks in the region. Over the past few decades, the government has built more than 2,000km of modern roads and connected almost all the major cities via expressways. The Ministry of Equipment, Transport, Logistics, and Water aims to build an additional 3,400km of roads and 2,100km of highways by 2030 at an expected cost of USD9.6 billion.
Investments of even higher scale are being directed to the railway network. The USD2.4-billion Tangier-Casablanca high-speed line was inaugurated in 2019, and a 225-km extension to Marrakesh is currently in the works. Overall, under the 2040 Rail Strategy, Morocco will allocate USD37.5 billion to improvement projects, extension projects for conventional rail lines, extension projects for the highspeed rail network, and new public transportation system in Casablanca, Rabat, Agadir, Fes, Marrakesh, and Tangier. Overall, growth in the construction sector has been supported by the government’s new PPP regulation, which continues to attract FDI in energy and transport infrastructure projects. The new PPP policy has affected the sector both in terms of consumption and the volume of projects involving international engineering and construction firms. According to Fitch forecasts, the value of the construction industry is expected to increase between 2018 and 2022 on the back of programs such as Rabat City of Light, Tangier-Metropolis, Moroccan Capital of Culture, the urban development Plan of Greater Casablanca, the Meknes-Errachida highway, and the Mahdiyya Renewable Energy City.
Although investment opportunities are spread across numerous sectors, the portfolio of energy projects is one of the largest in terms of value, totaling USD6.4 billion. This is in line with the government’s plan to diversify its energy production capabilities and generate 52% of installed capacity from renewable resources. So far, the plan has had significant success thanks to the 580-MW Noor-Ouarzazate solar complex, which saves 760,000 tons of CO2 emissions. Once fully complete, it will be the world’s second-largest solar plant after Solar Star in California. The main reason why Morocco has been able to successfully build modern infrastructure is a solid regulatory climate, which boosts investor confidence. In terms of governance and procedures, Morocco outperforms emerging markets as well as its fellow African nations. Notably, the country ranks third regionally for the speed of construction in Fitch’s infrastructure Risk/Reward Index. This plays a significant role in attracting international companies such as Alstom, Bouygues, and Abengoa. The latter was chosen by the Moroccan National Electricity and Drinking water Office (ONEE) in July 2019 to construct the world’s largest sea water desalination plant, work for which will commence in 2021. The plant is expected to produce 450,000cbm of desalinated water per day and irrigate 15,000ha of rural land.
Morocco’s construction industry is expected to be valued at USD18 billion in 2021, according to Timetric’s Construction Intelligence Center (CIC). And while the government should be commended for the way it has attracted investment and carried out modern infrastructure projects, it should not start patting itself on the back until all Moroccans have access to the kind of transport, education, and healthcare available in major cities.
Special Report: Mallorca launch event
The Business Year: Mexico 2022 Launch Event - Closing Speech
The Business Year: Mexico 2022 Launch Event - Panel 2