Morocco July 2019


Morocco Monthly Briefing July 2019



Morocco 25 July 2019

Moroccans will celebrate the 20th anniversary of the enthronement of King Mohammed VI (1999-present) this month as optimism over the country’s economic and social outlook grows, and the country begins to benefits from its continent-leading infrastructure developments. Morocco and the European Union (EU) launch the Euro-Moroccan Partnership for Shared Prosperity, promising to improve cohesion and relaunch talks on a free trade agreement, as well as the prospect of Morocco’s integration into several new EU programmes and agencies. The House of Councillors approves a law governing Sharia-compliant insurance, known as Takaful, which will expand the country’s small but growing Islamic finance sector if it passes parliament’s second chamber in the coming weeks.


King Mohammed VI’s 20th anniversary: 20 years of progress

Moroccans will celebrate the 20th anniversary of the enthronement of King Mohammed VI (1999-present) on 30 July, during which period the country has transformed into a development exemplar for the rest of the continent – albeit an unconventional one. The king’s political, economic and social reforms have significantly improved the investment climate and boosted economic development.1 King Mohammed VI and Moroccan citizens will reflect positively on the past two decades and will have great optimism looking to the future.

Morocco currently stands as the fifth largest economic power on the continent. Gross domestic product (GDP) has risen from $41.6 billion in 1999 to $121.4 billion in 2019, and per capita income has more than doubled, from $1,490 to $ 3,360 over the same period. The International Monetary Fund (IMF) expects Morocco’s economic growth to continue upwards with real GDP growth of 4.5% in 2024 (almost 1% above the world average).2

The country’s success is in large part attributed to King Mohammed VI’s decisive decision making. South Africa-based news outlet Daily Maverick’s Greg Mills recently praised various policy areas that the king has worked on:3

“This has included moves to better balance gender rights, roll out social housing on a massive scale, modernise government, and improve the country’s foreign relations, not least through a big diplomatic and economic push into Africa.”4

Continent- and world-leading infrastructure is one of the most notable signs of the country’s progress over the past two decades – for which some credit must be given to King Mohammed VI. As Mills notes:5

“The lesson of Morocco’s contemporary success at delivering and then using efficiently, big infrastructure assets, is down to a combination of leadership, vision and delivery.”6

Major infrastructure projects include the Al-Boraq railway, Africa’s only high-speed rail network that runs between Casablanca and Tangier; the Tangier Med port, Africa’s largest port complex that is capable of handling 9 million containers annually; and, the Noor 1 solar power complex, the world's largest concentrated solar power plant that produces 580 megawatts of power at peak.

Morocco’s soft power has grown substantially and now acts as a significant international player. The country contributes to the African Union and United Nations’ peacekeeping and security missions. The Mohammed VI Foundation of African Ulemas was set up to develop religious tolerance in Africa. It is now a strong advocate of regional development in Africa though the framework of South-South cooperation. More than 1,500 cooperation agreements have been signed with more than thirty other African countries. Morocco has become one of the most influential African investors in West Africa and the second largest African investor on the continent. Telecommunications company Maroc Telecom, a subsidiary of United Arab Emirates-headquartered Etisalat, is present in over ten African countries, and three Moroccan banks, Attijariwafa Bank (AwB), Banque Marocaine du Commerce Exterieur (BMCE) (Moroccan Bank of Foreign Trade) and Banque Centrale Populaire (BP) (Central People’s Bank), are present in more than thirty countries in Africa.7

Foreign minister’s EU visit a huge success

Morocco and the European Union (EU) launched the Euro-Moroccan Partnership for Shared Prosperity on 27 June. The joint political declaration aims to improve cohesion and relaunch talks on a free trade agreement, as well as the prospect of Morocco’s integration into several new EU programmes and agencies.8 Morocco will hope that the renewed momentum for cooperation between the two sides will carry on until November’s EU-Africa Business Summit in Marrakech.

The declaration came at the end of the 14th meeting of the EU-Morocco Association Council, led by Morocco’s foreign minister, Nasser Bourita, and the EU’s foreign affairs chief, Federica Mogherini. Bourita hailed the “relaunch” of relations with the EU during his visit to Brussels (Belgium), saying he expects it will pave the way for improved cooperation.9 Morocco is also thought to have its eye on some of the EU's new development-related private finance initiatives.10 Bourita will be pleased with the outcome of his red-carpet visit, primarily because Morocco has “invested much time and cash on Brussels-based PR firms over the past 18 months to reinvigorate its relations with the EU.”11 Negotiations over the details of the agreements are expected to start immediately and to dominate the next 18 months.

Bourita said it was necessary to relaunch the partnership because of “difficulties” in recent years.12

“This was partly due to the fact that in recent years the EU seemed busier with its own internal issues…we hope that this new joint declaration agreed with the EU today will give fresh impetus to the relationship.”13

Bourita’s comment concerning their weak relations misses some critical points. Relations have been strained by the EU’s backing of a controversial fisheries and agriculture deal in February, which would see EU vessels trawling off the Western Saharan coast and jeopardise ongoing United Nations (UN)-sponsored peace talks between the Polisario Front and Morocco (see ARC Briefing Morocco March 2019). Also, Moroccan officials argue that the country’s current trade deal with the EU favours the latter, and they point to Morocco’s $783m trade deficit to the EU as evidence.14 Moroccan exports to the EU have stood at around 60% of the country's total exports for about a decade. Morocco and the EU have also clashed over illegal immigration. The West Mediterranean has become the key transit route to Europe in 2018 and early 2019.

Bourita stressed the importance of tackling migration and asylum issues in Brussels. He said his country was particularly well placed to play a vital role in addressing the issue and called for greater cooperation.

“We want the borders to remain safe, open and fluid but they must be closed to those who wish to exploit them for their own gain. People have to realise that migration is here to stay. Migration is a natural human movement but must be respected. We must promote legal migration but do all we can to combat illegal migration and human trafficking.”15

The EU wants to reach migration deals with Middle Eastern and North African countries, such as Morocco, Egypt, Tunisia, and Libya and has suggested building migrant reception centres in these countries to hold asylum seekers.16Spain, one of Morocco’s main EU allies, pledged to provide $33.6m to Morocco on 19 July to help curb illegal immigration into Europe.17 Morocco hosted last December's UN Migration Summit, at which countries formally signed the non-binding 'global compact' on migration.

Sharia-compliant insurance will boost the financial sector

The House of Councillors approved a law governing Sharia-compliant insurance, known as Takaful, on 9 July, which will expand the country’s small but growing Islamic finance sector.18 Insurance companies will be able to launch Takaful subsidiaries once the bill passes through the 395-member House of Representatives, Morocco’s second chamber of parliament, which is expected to happen in the coming weeks.19

Sharia insurance differs from conventional insurance, primarily in that it operates based on solidarity and mutual assistance.20 Members of Takaful companies all contribute financially to a fund to provide mutual assistance, unlike conventional insurance companies, which rely on each member paying a premium for coverage.

Morocco is the most advanced country in North Africa in developing Islamic finance. The country has allowed five Islamic banks and three shop fronts to offer Sharia-compliant banking services in the country since early 2017.21 While the sector is still growing, it now provides sharia-compliant financing for real estate, automobile and equipment purchases. Morocco-based BTI Bank general manager Mohamed Maarouf told World Finance magazine:

“The Moroccan model is unique in many regards, and has been designed with both local and international markets in mind.”22

Moroccan Association for Participatory Finance Professionals president Said Amaghdir said Takaful would equip Moroccan Islamic banks with life and general insurance mechanisms.23 He added that Islamic banks have so far issued uninsured real estate and car loans, known as Mourabaha, for a total of 6 billion Moroccan Dirhams (MAD) ($626m).

The World Takaful Report 2016 valued the global Takaful industry at $33 billion in 2014.24 In the same year, over 300 Takaful companies operated worldwide. Gross Takaful contribution was estimated to be around $14 billion. The market is highly concentrated in the Gulf Cooperation Council (GCC) and South East Asia regions, with Saudi Arabia and Malaysia as the predominant markets. The report states:

“Takaful forms an essential element of the Islamic financial ecosystem, and it is seen to be spreading out of its core markets, albeit at a small pace.”25

The first Takaful company, the Islamic Insurance Company of Sudan, was established in 1979.26 In 1985, Saudi Arabia-based Grand Council of Islamic Scholars passed a resolution stating that conventional insurance is not acceptable under Sharia law. By the mid-1990s, seven companies were in operation in several Muslim countries, including Jordan, Saudi Arabia, and Bahrain.

ARC Briefing keeps you:

  • Up to date
  • In the know
  • Ahead of events!

Receive subscription information on your countries of interest or call: +44 20 7078 4080


1. [Source, analyst, London]

2. [World Economic Outlook, International Monetary Fund, April 2019]

3. [Daily Maverick, 18 Jul 2019]

4. [Daily Maverick, 18 Jul 2019]

5. [Source, analyst, London]

6. [Daily Maverick, 18 Jul 2019]

7. [The Arab Weekly, 27 Jan 2019]

8. [Africa Confidential, 12 July 2019]

9. [Morocco World News, 27 Jun 2019]

10. [Africa Confidential, 12 July 2019]

11. [Africa Confidential, 12 July 2019]

12. [Morocco World News, 27 Jun 2019]

13. [Morocco World News, 27 Jun 2019]

14. [Africa Confidential, 12 July 2019]

15. [The Parliament, 28 Jun 2019]

16. [The Parliament, 28 Jun 2019]

17. [El Pais, 19 Jul 2019]

18. [Reuters, 10 Jul 2019]

19. [Source, analyst, London]

20. [Morocco World News, 13 Jul 2019]

21. [Morocco World News, 13 Jul 2019]

22. [World Finance, 23 Jun 2019]

23. [Said Amaghdir quoted in Reuters, 10 Jul 2019]

24. [Unless otherwise noted: World Takaful Report, Middle East Global Advisors, 2016]

25. [World Takaful Report, Middle East Global Advisors, 2016]

26. [Morocco World News, 13 Jul 2019]