Morocco turns to hi-tech manufacturing
Electric vehicles, aerospace and pharmaceuticals are at the heart of Morocco’s bid to become a high-tech hub positioned for European markets.
Making the most of its geographical position on the edge of Europe, Morocco’s economic success over many years had been built on low-cost manufacturing of food, textiles and other lower cost goods that benefited from trade deals with the European Union.
Now, however, the focus has switched to higher value, higher tech sectors, such as pharmaceuticals, aerospace and the automotive sector, with Moroccan companies working with international partners to build integrated supply chains.
The Moroccan economy recovered strongly last year, achieving growth of 7.4%, in comparison with the 6.3% contraction recorded in 2020, largely as the result of strong growth in the manufacturing and agricultural sectors.
Growth this year is likely to be a more modest 3.1%, according to Renaissance Capital, as the global economy remains weak in the face of the prolonged Covid-19 pandemic, the Russian invasion of Ukraine and the associated effects on global demand and supply chains. The manufacturing sector accounts for 14% of GDP, slightly ahead of agriculture with 13%.
Manufacturers have long been attracted to the country by its location, with lower labour costs encouraging companies to set up processing and manufacturing plants specifically to target European markets. Over the past decade, improvements in national infrastructure have complemented this geographical advantage.
In particular, the new port of Tanger Med, with annual handling capacity of 9m TEU/year, is now the biggest container port in Africa by far, larger than competitors on the other side of the Mediterranean Sea in Spain (a TEU, or 20-foot equivalent unit, is the standard size of a shipping container).
The port has encouraged export-orientated businesses to set up operations in and around Tangier, while improved road and rail infrastructure within Morocco has made it easier for manufacturers across the country to make use of the facility.
Automotive sector boosts exports
The automotive sector was one of the first advanced manufacturing industries to take off in Morocco and has quickly become one of its success stories. It is the most important export sector, generating $8.1bn in exports in 2020, although this was $900m lower than in the previous year.
National production capacity now exceeds 700,000 vehicles a year, with many exported to Western Europe. Exports reached 358,745 units in 2021, up 18% on 2020, with Renault and Stellantis the biggest investors.
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SOURCE : AFRICAN.BUSINESS