Industrial Policy and Promising Niches in Morocco. A Quantitative Analysis

Abstract

Since 2000, Morocco has launched important institutional and economic reforms based on strategies to correct market failures in important sectors of the economy. These strategies have included tax exemptions and other financial incentives, facilitating access to land and simplifying administrative procedures, and launching major public infrastructure projects, all of which have combined to create a new investment dynamic in strategic sectors such as agriculture, industry, and energy.

These efforts have affected many sectors: the Azur Vision 2020 plan for tourism, the Green Morocco Plan for agriculture, the Halieutis 2020 Plan for fishing, Maroc Plus Export for export, the Emergence Plan (2005) for industry followed by the National Pact for Industrial Emergence, 2009-2015 and the new Industrial Acceleration Plan, 2014-2020.

For example, to support the new Industrial Acceleration Plan, the government has provided a grant, a financial support of about 2% of GDP over 6 years. The government has also offered ad hoc support to attract foreign investors in large private projects likely to generate significant positive externalities. One example is the project to set up a Renault Company plant in Tangiers, which aims to produce and export 400,000 cars per year (World Bank, 2017).

This note highlights the industrial sectors that can offer the best potential for growth, attract private investors and contribute to the creation of decent jobs. It will also identify ways to accelerate investment in Morocco. These industrial investments may include purely private investments or those made with the support of international financial institutions. The note analyzes investment and sectoral integration opportunities using the input model (outputs and employment elasticity indicators), the evaluation of the industrial acceleration plan, and sets out the measures taken by the CVE to promote VSEs. Only one classic sector is selected is highlighted for their investment potential and their commitment to reform in the sectors. It is the food industry.

The note follows the diagram below:

1) An introduction to the economic, political and social frameworks, including key indicators

2) A sector analysis to identify one to three sectors that are likely to be the subject of accelerated investment and in which reforms will have a particularly high chance of improving the business and investment climate and having an impact on development.

3) A mapping of the most relevant initiatives, technical assistance, grants and loans, and investments by donors and other stakeholders, such as development finance institutions. In the selected sector(s).

4) An analysis of the existing reform agenda in the respective sector(s) and the identification of areas where there is a high likelihood of effective cooperation to support the implementation of these reforms.