Foreign Direct Investment

According to UNCTAD's World Investment Report 2021, FDI flows to Morocco stood almost unchanged at USD 1.8 billion in 2020. The stock of FDI reached USD 72 billion in 2020. Morocco's FDI profile is quite diversified, with a consolidated presence of some large multinationals in manufacturing industries, including automotive, aerospace and textiles. The long-term commitment of these companies in the country, along with steady inflows into phosphate mining - as Morocco holds the largest reserves - eased the decline in cross-border investment inflows despite the global crisis due to the Covid-19 pandemic. According to data from the Moroccan Foreign Exchange Office, France, Spain, the UAE, the UK and Luxembourg have the majority of FDI stocks. The insurance sector had the lion's share of FDI in recent years, mostly due to the acquisition of the Moroccan insurance firm Saham by the South African Sanlam via its Ireland-based asset fund for USD 1 billion. Nevertheless, agriculture has the highest share of FDI stocks, followed by financial and insurance activities, mining and quarrying, ICT and wholesale and retail trade. According to the latest figures from the Moroccan Foreign Exchange Office, in the first eleven months of 2021 FDI flows to Morocco increased by 13.9% compared to the same period one year earlier (to MAD 17 billion), whereas Moroccan investments abroad reached MAD 16.1 billion, the highest level in the last five years.
After the positive results of the Industrial Acceleration Plan 2014-2020, a vast project of economic modernisation to attract more FDI, the government launched a second phase for 2021-2025 focused mainly on the consolidation of the achievements made within the framework of the first phase of the plan (which, among other results, created 54 industrial systems in partnership with 32 professional associations and universities in various sectors) and their generalization to all regions, by integrating small and medium enterprises and by placing industry at the heart of technological transformations. Among the reasons to invest in Morocco there are the relatively low cost of labour, its strategic location, between Europe and sub-Saharan Africa, good infrastructures and the stability of the country’s currency and political framework. On the other hand, Morocco still has significant social and regional disparities, weak productivity and low competitiveness and an economy heavily reliant on the price of hydrocarbons and the agricultural sector. Morocco is ranked 53rd out of 190 economies by the World Bank in its latest Doing Business report, gaining seven spots compared to 2019, and up by 40 spots from 2012. This improvement has been made thanks to better access to electricity (generalising online applications for new connections and expanding the use of prebuilt transformers). Dealing with construction permits has also been eased by improving the dedicated online platform.