At the opening of the work of the Government Council last week, Mr. Akhannouch emphasized the strengthening of investment dynamics and job creation, for sustainable economic growth.
Certainly, the head of government speaks about the country’s overall investment, which is the subject of the government’s new policy according to which private investment must increase in power to alleviate public investment. But what about the current situation of overall investment in Morocco, to measure the path to be taken and the government’s task to which Mr. Akhanouch refers?
The first observation concerns the figures for state investment expenditure, which in the monthly bulletin of public finance statistics for July 2024 stand at 59 billion dirhams and continue to grow from year to year, in this case by 11.3%, going from 53.2 billion dirhams in July 2023 to 59.2 billion dirhams in July 2024.
As for total investment in Morocco, the only figures available are those of the High Commission for Planning, HCP, according to which, in 2023, these amounted to 371.9 billion dirhams with an increase of +4.8% compared to the year 2022, taking into account an average annual economic growth rate of +2.5% between 2019 and 2023. With the precision that these 371 billion dirhams of investment are mainly distributed between the construction and public works sector with 52.4% and industry with 34.1%.
In 2023, FDI revenues reached 181 billion dirhams, an increase of 55% over the period 2000-2023, thus confirming Morocco’s attractiveness for international investors since the industrial acceleration plan which placed them at the center of its strategy and the policy of boosting AMDIE since 2019.
Also, for private investments as a whole, the statistical evaluation is not exhaustive. Despite the efforts made by the HCP, only investments that benefit from state support or tax measures are identifiable. Those that are not eligible remain under the radar and are difficult to value.
This is also a problem that the new Ministry of Investment is addressing by creating an investment observatory that should soon be operational, with the aim of making a broader and more accurate inventory of investments undertaken and carried out in Morocco, thanks to agreements signed with the banking sector, the DGI, customs, OMPIC, etc.
This initiative will therefore make it possible to better understand the contribution of the private sector in terms of investment at the national level and to put into perspective the significant share of public investments.
Furthermore, with regard to private investment in Morocco, it should be noted that it is at the heart of the State’s policy in terms of improving the economic environment and therefore the business climate.
The new development model has designed the outlines, the implementation of which is underway. One of these aspects is none other than the major tax reform underway, which results in a reduction of the IS from 35% to 20% for corporate profits below one million dirhams, a measure that concerns the majority of Moroccan companies, knowing that only large companies will continue with the IS rate of 35%.
The unification of VAT at 2 rates, 10 and 20%, is another example of economic consolidation. Furthermore, still to encourage Moroccan private investors, two important policies must be taken into account: that of industry for their support and that of investment financing through the Mohamed VI Fund for Investment and the Investment Charter.
Because, a new industrial policy that emphasizes the country’s economic sovereignty as a means and end, is being prepared. It will have to prioritize the satisfaction of the country’s needs, while ensuring its resilience in the event of a crisis in reference to that caused by covid 19.
To this end, a project bank has already been set up by the Ministry of Industry. These projects should result in the replacement of certain imports and create 400,000 direct jobs. The amount of investments committed by these projects should reach 110 billion dirhams which will generate 92 billion dirhams of import substitution and 85 billion dirhams of new exports, knowing that 86% of the capital committed will be Moroccan.
The State offers investors support at all levels of implementation and these projects relate to all sectors of activity: agri-food, metallurgy, chemistry and parachemistry, textile metallurgy, construction materials, electronics circular economy, leather renewable energies and shipbuilding industry, in order to create an industrial ecosystem. One of the examples targeted by the economic sovereignty strategy concerns the production of semiconductors to meet the country’s needs and export while attracting foreign investors who are many to seek them because of their global shortage.
Finally, to acknowledge this progress, Morocco has been a signatory to the OECD declaration known as PCN, guiding principles for responsible business conduct since 2009. And it is part of international benchmarks by signing international investment protection agreements.
However, the measurement of the business climate in Morocco (doing business) remains poorly understood.
Even though Bank Al Maghrib publishes the results of a business survey every quarter, the latest of which for the second quarter of 2024 announces: “In the second quarter of 2024, the general business climate in industry would have been “normal” according to 67% of companies and “unfavorable” according to 19% of them, which it details by sector of activity, these indications remain approximate.
Ultimately, investment is certainly an important tool for economic growth, but the regional economic situation conditions it favorably or not.
However, the economic health of Morocco’s European partner countries leaves something to be desired, public budgets are being restricted, announcing austerity. Despite the drop in inflation to 2%, growth is slow to resume overall. Private investors are waiting for the recovery to reassure themselves about the future because confidence is the driving force behind investment…
Afifa Dassouli
#Akhannouch #Boosting #investment #cost
– 2024-09-04 22:22:29
