Economy

UNCTAD: Foreign Direct Investment in Morocco Fell by 29% in 2016

Chaima Lahsini

Rabat - Morocco failed to retain foreign capital in 2016, says a United Nations report. The country was ranked fourth in the top five African countries receiving foreign direct investment (FDI).

FDI flows to Morocco have declined from 29 percent in 2016 to USD 2.3 billion after reaching USD 3.2 billion in 2015, according to the United Nations Conference For Trade and Investment (UNCTAD)’s 2017 report on investment in the world.

The report released on Thursday explains that this decline in investment is mainly due to the decline of European demand in Morocco, which negatively affected FDI flux oriented towards the exporting sectors of the country.  

The level of European FDI to Morocco, although modest, could make a strong contribution to the economic take-off of the Kingdom, which also pursues an investment policy abroad that mainly targets countries in sub-Saharan Africa, notes the UNCTAD report.

Morocco therefore received less FDI in 2016, but it is still one of the most important investors in Africa.

The UNCTAD cites Attijariwafa bank’s acquisition of the Egyptian subsidiary of Barclays for USD 500 million. “Intra-African FDI has remained at very high levels in the previous year. They are led, among others, by countries like Morocco,” the report said.

Two other transactions are also presented as examples in the UNCTAD document. Sanlam (South Africa) which acquired 30 percent of Saham Finances for USD 375 million. The other operation concerns the investment of the OCP group in Ethiopia, which involves the construction of a fertilizer plant for USD 3.7 billion.

Morocco has promulgated a new investment law that centralizes investment promotion activities in the Moroccan Investment and Export Development Agency and creates export processing zones in every major region of the country.

According to figures from the Moroccan Foreign Exchange Office for the year 2016, the flow of FDI decreased by 28.2 percent. However, during the first four months of 2017, this flow amounted to MAD 7.8 billion, compared to MAD 7.4 billion in 2016, registering a 4.5 percent increase.

This growth was due to a 51.3 percent decline in FDI spending to MAD 1.7 billion (USD 174 million), which was higher than that of revenues (-13.6 percent), which reached MAD 9.5 billion at the end of April 2017, explains the Foreign Exchange Office in a note on the preliminary indicators of external trade in April 2017.

Decline of Global FDI Flows

On an international level, global flows of FDI depreciated by 2 percent to USD 1.75 trillion. The UNCTAD reports that investment in developing countries fell further by 14 percent last year.

In the least developed countries and structurally weak economies, FDI remains volatile. Although it claims a modest recovery in FDI flows in the 2017-2018 period, the organization expects them to remain well below their 2007 level.

“These developments are binding, especially given the enormous investment needs associated with the sustainable development goals detailed in UNCTAD's Investment Action Plan. Progress on sustainable development and sustainable peace requires more investment in basic infrastructure, energy, water and sanitation, climate change mitigation, health and education, as well as investment in productive capacity to generate jobs and income growth,” the UN agency said.

According to the UNCTAD, today, more than ever, it is important to ensure that the global political environment is conducive to investment in sustainable development.

“UNCTAD plays an important role in providing advice on national and international investment policy regimes. Its investment policy framework and its roadmap for the reform of international investment agreements have been used by more than 130 countries in formulating a new generation of investment policies,” the organization said.

Comments

Editorial

Opinions

  • The Moroccan Gold Eldorado
    20

    The Moroccan Gold Eldorado, a Myth or a Reality?

    Rabat - Recently, a conspiracy theory video about a large gold discovery in Morocco is making rounds online. The video claims that a substantial gold reserve was discovered and is being extracted by a Canadian mining company called Maya Gold and Silver. We Moroccans are very proud human beings, we love our country and cherish...

  • Qatar's Emir Sheikh Tamim bin Hamad Al-Thani
    20

    Qatar: How the Tables Are Turning in The Gulf

    Rabat - Amidst harsh sanctions and a long list of demands from its neighbors, Qatar’s ability to thrive under pressure may prove to be problematic for Saudi Arabia. As Saudi Arabia and its coalition attempt to wait out Qatar, the recent spat in the Gulf continues to become more and more global, and severely against...

  • FILE - In this Jan. 20, 2015 file photo, a plume of steam billows from the coal-fired Merrimack Station in Bow, N.H. If the nation doesn’t do more, the U.S. probably won’t quite meet the dramatic heat-trapping gas reduction goal it promised in last year’s Paris agreement to battle climate change, according to a new study. (AP Photo/Jim Cole, File)
    20

    Climate Change : If You Can’t Measure It, You Can’t Fix It

    Chefchaouen - Climate change is happening at home and around the world. Chefchaouen is doing its part by embracing clean energy climate solutions and engaging its citizens in climate action. When it comes to fighting climate change, cities and local leaders are best positioned to lead that charge. Local leaders from coastal to landlocked communities are...

  • 20

    India Orders Internal Probe into Mistaken Use of Morocco-Spain Border Picture

    Hyderabad - The Indian Ministry of Interior on Wednesday ordered an internal investigation to find out how a picture of Morocco-Spain border was used in its annual report to show floodlights along the India-Pakistan border. What is most embarrassing is that the annual report of previous years was tabled during the Budget Session of Indian...

  • Amid Growing Tension, Thousands of Moroccans Stage Pro-Rif March in Rabat
    20

    Neglect in Harsh Soil: The Deep Roots of the Rif Crisis

    Rabat - The ongoing protests in northern Morocco started almost eight months ago, but they have their origin in nearly a century of violent repression by the state. The Rif has, in spite of itself, got involved into a peaceful revolt since the death of the fishmonger Mohcine Fikri at the end of October 2016, a...

  • Tamim Bin Hamad al Thani emir of Qatar
    20

    The Qatar Crisis: What Does It Mean?

    Rabat - The recent diplomatic fallout between Qatar and the rest of the Middle East could have serious economic and geopolitical consequences across the globe. Earlier this week, Qatar’s diplomatic crisis took an extreme turn as several Arab states severed diplomatic ties with the Gulf nation.  The original list of countries in the coalition against...

  • Moroccans spend Laylat al-Qadr, the 26th day of Ramadan, at the Hassan II mosque in Casablanca.
    20

    Ramadan: Not just Abstinence from Daily Intakes 

    By Abdellatif Oudra Rabat - The observance of Ramadan, one of the five pillars of Islam, compels Muslims to fast from sunrise to sunset. But it is not just about abstaining from food or drink.  Ramadan, the ninth month of the Islamic calendar, is observed in commemoration of the revelation of Qur’an to the prophet Mohammad,...

  • Morocco Threatens to Terminate Agriculture Agreement with Europe
    20

    Morocco and the EU: Managing the Future

    Rabat - Morocco enjoys proximity to Europe and is at an advantage of being favoured by the European Union as a close partner on political, economic, and cultural levels. Historical archives and political legacies tie Morocco directly with at least three influential European countries: France, Spain, and England. Demography, kinship, and immigration compel other EU...

  • The Educational and Cultural Implications of the Arab Spring
    20

    The Educational and Cultural Implications of the Arab 'Spring'

    Rabat - In the last ten years or so, the Arab world has seen unprecedented collapses in the realms of politics and economy, among others. World NGOs regularly release area-specific rankings, in which Arab nations commonly rank at the bottom of lists in education, human rights, and income for instance while they top those of...

  • Thousands Hold Peaceful Demonstration in Memory of Mouhcine Fikri
    20

    Al Hoceima and the Pedagogical Exercise

    Ottawa - What makes a democracy different from non-democracy? This is the classical and historical question asked by philosophers over the centuries and deeply questioned in the discipline of political science. Democracy cannot prevent inequality as the case in the United States where inequality is the highest globally. Democracy cannot stop corruption like in Brazil...