19 Jun Interview with H.E. Mohcine Jazouli, Minister of Investment, Convergence and Evaluation of Public Policies, Kingdom of Morocco
Morocco has put in place the “Morocco’s Offer” initiative in a bid to improve national competitiveness. Could you explain the underlying objectives of “Morocco’s Offer?”
The publication of the circular “Morocco Offer” for green hydrogen is part of the implementation of the royal vision. Morocco aims to strategically position itself in this new sector with high potential and this circular contains all the elements to promote the attraction of numerous investments while securing the interests of the Moroccan state. It represents a real turning point for the Moroccan economy, marking a starting point of an open and transparent process for the selection of investors interested in developing projects related to green hydrogen and its derivatives in Morocco.
Above all, the program defines what the Moroccan hydrogen offer is. It includes the entire green hydrogen value chain, from the production of renewable energies to all derivative products, such as ammonia, e-methanol or any other product based on hydrogen or ammonia, such as green steel and other types of green components.
When it comes to green hydrogen, it’s important to have land available. A total area of 1 million hectares has already been identified. For the first phase, 300,000 hectares of land, divided into plots of 10,000 to 30,000 hectares, will be made available for green hydrogen projects.
The third pillar is a fast-track approach for investors, enabling us to negotiate directly with them and give them a fast-track process for their investment project. It means total transparency in the decision-making process and appropriate governance, with committees to both prepare and ratify decisions. An incentive regime for hydrogen sector investors exists through specific support mechanisms outlined in the new investment charter. Other benefits, including tax and customs incentives, are provided for by current legislation.
Morocco enjoys undeniable advantages that enhance its competitiveness in the hydrogen sector: available renewable energy resources with excellent intermittency between solar and wind; existing and ongoing infrastructure developments, a young and skilled human capital, institutional and political stability and proximity to the European market which is expected to import 10 million tons of green hydrogen by 2030. The challenge for the Moroccan state remains to generate jobs and added value, with industrial integration around the hydrogen sector remaining crucial.
What are the main public policies and reforms implemented in Morocco in recent years to attract investors and stimulate foreign direct investment (FDI)?
FDI in Morocco is doing well, amounting to over 3% of GDP. For more than two years we’ve been doing roadshows all over the world, attracting investors in different sectors. Whereas in the past FDI used to be originating from one or two source countries and mainly focusing on the real estate sector, today we are diversifying, with source countries ranging from Europe of course, but also the United States, the Middle East and Asia. These investors today are investing in electric mobility projects, in renewable energy projects or in other sectors that we call Morocco’s new global businesses. The industry sector has become the largest sector, representing 30% of FDI, we’ve diversified both investment sources and sectors, and we’re backing this up with reform.
We have our investment charter, but we’re also working on improving further our business climate. Several international reports and indices highlight Morocco as a preferred destination for FDI. In March, Standard & Poor’s, while maintaining Morocco’s sovereign debt rating at BB+/B, upgraded the outlook associated with this rating from stable to positive, due to the improvement of socio-economic and budgetary reforms.
On the ground, we’ve really improved the business climate and our competitiveness, which is based on our strong logistical infrastructure, on our skilled workforce and, above all, on our low-cost green energy. As a result, we’ve improved our attractiveness and FDI is doing very well. That’s important, because it’s the confidence of international operators that further strengthens the confidence of domestic operators.
Under the leadership of His Majesty King Mohammed VI, may God assist him, Morocco has undertaken numerous reforms to improve the business environment and has successfully completed large-scale projects such as industrial zones, payment deadlines, simplification of administrative procedures and decentralization and digitalization of the regions and territories. This has gradually earned Morocco the trust of international investors, making it prominent on global radars.
How has the business climate evolved over the last 10 years?
Under the enlightened leadership of His Majesty King Mohammed VI, may God assist him, we have a National Commission for the Business Environment, chaired by the Head of Government, which has defined a multi-year roadmap with very clear objectives in terms of concentration, simplification and use of digital tools. In fact we are even able to allow for the digital inception of businesses in Morocco. All this is making a major contribution to improving the country’s business climate.
The political, macroeconomic, and social stability of the country allows investors to plan for the long term. Morocco is now an island of stability in a sea of instability. Secondly, the kingdom has adopted an extremely incentivizing policy for private investment through a national investment charter. Beyond the numerous financial incentives, it also offers the assurance of having a partner state, placing private investment at the heart of economic development and job creation, it amplifies investors’ confidence in Morocco as a destination. The country provides access to over 2.5 billion consumers. With over 50 free trade agreements, it is one of the world’s most open economies, and among the few countries in the world with free trade agreements with both the European Union and the United States. It has world-class infrastructure and a geographical position that brings these markets closer in terms of time and cost. In addition to a qualified and available human capital, it is among the very few countries where green energy is more competitive than fossil fuel energy, thanks to its abundance of sun, wind and land resources, making it a truly globally competitive platform.
Could you give us an overview of investment policies and incentives, and in particular explain the Moroccan Agency for Investment and Export Development’s (AMDIE) role in this context?
The new investment charter is the main tool. It’s a colossal piece of work since the old charter dated back to 1995. It was this new government which, in 2022, at the request of His Majesty the King, may God assist him, brought out a new investment charter. Our new charter is based on three major pillars. The first pillar relates to incentives and investment incentives; the second pillar relates to the business climate, the third pillar relates to investment governance. Its objective is to maximize the impact of investment, particularly in terms of creating stable jobs, equitable territorial development, prioritizing sectors vital to the national economy and sustainable development.
The governance of investment today has been unified around the Head of Government, with the creation of the Ministry of Investment on the one hand, with the attachment of AMDIE and of the regional investment centers to this Ministry. This creates a holistic approach to investment to really boost investment. AMDIE plays a key role in presenting the Moroccan offer. Road shows are organized all over the world under the label ‘Morocco Now’, to present Morocco’s appeal to investors. We’ve been to Europe, Asia, the United States and the Middle East. We’ve been all over the world, and we’ve had very good feedback.
We have put in place incentives to support investors by granting them bonuses of up to 30% of the investment amount, depending on a number of criteria such as employment, female employment, environmental care and other sectorial or territorial criteria, since we want investments to be equitably distributed throughout the kingdom. The most important criterion is job creation, for which strong incentives are awarded. These schemes work: after one year, 87 projects were approved with an investment amount of MAD 152 billion ($15.3 million) and the objective of creating more than 70,000 direct and indirect jobs. We have multiplied by five the amount of investment projects that under these schemes, and by seven the number of jobs created. There’s a real momentum, and today we have investors from all over the world, including Morocco, who are coming forward to launch investment projects.
In addition to our traditional partners, we’ve opened up and broadened the spectrum to Asian countries in particular, who are the world leaders in electric mobility and who have come to invest massively in Morocco, seeing Morocco as a solution to the problem of decarbonization in Europe and the United States. Today, we even have joint Chinese-German companies setting up in Morocco to invest in electric mobility projects. Morocco is really seen as a solution thanks to renewable energies, thanks to electric mobility projects and in particular, given Europe’s willingness to decarbonize its economy by 2030, both through electric mobility and green hydrogen.
What are your ministry’s investment objectives over the next 10 years? What are the main investment opportunities, or the sectors you would like to develop in particular?
Certain sectors have been consolidated, such as textiles and agribusiness. Other sectors, such as the automotive and aeronautical industries have really taken off and today we are pushing new sectors such as electric mobility, which is a natural continuity of the automobile industry, but with this new dimension of decarbonization. Morocco has taken up the challenge and is in the process of successfully transforming its automotive sector into an electric mobility sector, for which investments are already being made. This is a major bet we’re making and we’re coming out with our Maroc Green Hydrogen offer, which is immediately operational. We have projects that will very quickly be effective in this area.
My objectives are those set by His Majesty the King, namely to generate MAD 550 billion ($55 billion) in private investment and 500,000 jobs between 2022 and 2026. It’s a clear quantitative objective for which there are a certain number of quantitative and qualitative objectives and sub-objectives, as well as a holistic investment governance including the Head of Government, the Ministry, the CRIs and AMDIE. After two initial years that have fulfilled their promises, the challenge for 2024 will be to continue to implement investment projects on the ground to create the job opportunities our country needs.
What would be your key final message for the readers of Newsweek?
Morocco is truly exceptional. Morocco is a country at the crossroads of Africa, Europe and the Mediterranean. It’s a country with a secular history spanning 13 centuries, and a promising future, certainly with its population of nearly 40 million, but above all with its potential consumer base of over 2 billion, thanks to the free trade agreements signed with different partners. Morocco is truly a land of investment thanks to all the advantages it offers and all the qualities it possesses. It has clear stability, thanks to Royal vision and a large consumer base. It has a young, talented, and qualified population to fill and respond to major investment projects and world-class infrastructure, with the added advantage of low-cost renewable energies that are highly competitive with Europe and elsewhere. There is this Morocco momentum that many investors have understood and grasped. I invite all those who haven’t yet grasped it yet to come and do so.