Morocco is paving the way in Africa and the globe for developing new special economic zones (SEZs) and attracting foreign direct investment (FDI), owing to its higher value-added technological industries, according to a recent Oxford Business Group analysis.
The paper, entitled “How Special Economic Zones are Shaping Africa’s Industrial Landscape, shows the great success of Morocco’s exports in gaining two billion dollars of valuation between 2010 and 2016, with automobile exports alone increasing from 2% to 16% of overall exports.
Between 2008 and 2015, the composition of overall Moroccan exports which comprised medium-and-high-tech products and services rose from 23% to over 40%.
Oxford Business Group noted that the Moroccan government has been instrumental in attracting a high level of industrial investment, having launched the National Pact for Industrial Emergence in 2008 and the Industrial Acceleration Plan in 2014, as well as providing a range of fiscal incentives to investors.
The government also prioritized specific industries, such as automotive, aerospace, electronics, and agro-industrial processing, based on their suitability for investment.
This achievement is a by-product of the Kingdom’s political stability, the comparatively low cost of its skilled labor, and its proximity to Europe.
“In 2020, advisory firm FDI Intelligence ranked Morocco’s Tanger Med Zones – a group of eight free zones around the port of Tangier – as the top free zone in Africa and second in the world,” said the report.
The same source added that several emerging economies have attempted to follow Morocco’s lead with respect to high-tech industrial development, but many have been unable to synchronize local low-tech industries–such as agriculture and manufacturing–with high-tech industrialized solutions.
The lack of adequate training for highly skilled workers means there is often a gap between local economic activities and the expectations of international investors.
The implementation of the African Continental Free Trade Area (AfCFTA) is expected to enhance integration across the continent, spurring the structural transformation of African economies from a focus on low value-added industries to more diversified and knowledge-based economic activities.
The latest wave of free trade zone development in Africa has until now generally emphasized value-added conventional economic industries such as agriculture and manufacturing.