Morocco's special economic zones and industrial parks attract more investment

As moves to increase production in the country are executed, private and public operators are being supported by the development of special economic zones (SEZs) that offer tax breaks and a handful of other advantages to ease the import and export of merchandise.

In 2016 the government, in a business charter that amended the previous 1995 legislation, committed to establishing new economic areas in all 12 regions of the country. The areas are helping to attract international firms to Morocco for production, while also becoming a signifier of the government’s strategy to spread industry throughout its borders.

FOCUSING INVESTMENT: An additional benefit to the zones is that they are sector-oriented, developed to service industrial clusters, so that firms operating in the same areas can create interdependent systems to strengthen manufacturing capabilities. “The government has made efforts to organise sectors in the same spaces. You do not want things spread out too much, otherwise these industries cannot help each other and create cluster environments,” Melissa Marszalek, business development manager of Midparc Casablanca Free Zone, the aeronautics-focused SEZ , told OBG.

The strategy to create specific interlinked sector-specialised areas is part of the Industrial Acceleration Plan, launched in 2014 to expand industrial development in the kingdom between 2014 and 2020. Morocco has several decades of experience in the development of industrial zones. Although this has allowed for distribution of manufacturing capacity into several regions of the country, some of these areas have suffered from under-investment. According to the US-based development agency Millennium Challenge Corporation (MCC), the country has over 100 industrial zones, although a large number of them have aged infrastructure or lack the amenities that firms depend on to ease operations.

NORTHERN EXPOSURE: A key development came in the second quarter of 2017, as construction began on a new $1bn industrial and residential SEZ in the northern city of Tangiers. Formed under a partnership agreement between Morocco and China, the Mohammed VI Tangiers Tech City will be constructed over a 10-year period, span over 2000 ha and create more than 100,000 jobs, according to government estimates. With China’s HAITE Group, and Morocco’s BMCE Bank of Africa as the main investors, it is expected to be a major attraction for Chinese manufacturers, which are estimated to bring an additional $10bn worth of investments after the initial set-up costs. The area will cater to automotive, aeronautics and textiles industries, which aligns well with Morocco’s long-term development strategy.

Aeronautics and automotive production have experienced high growth rates, with vehicles now the top export in value terms. The Tangiers area has become an increasingly important centre for firms to base production, with the port – currently under expansion – a critical gateway for trade (see Tangiers chapter).

REVAMP: Alongside the creation of new industrial areas, refurbishing existing areas will also help domestic firms expand manufacturing capabilities. Under the Morocco Employability and Land Compact programme, the MCC and Moroccan authorities are channelling $127m to establish the Fund for Sustainable Industrial Zones. The scheme should help improve such things as infrastructure and services in key existing industrial areas, as well establish private-public partnership agreements to develop more efficient models for industrial park development and management.

Additionally, smaller cities are helping to cater to smaller firms through the development of industrial areas. Authorities in the city of Chefchaouen, in the north-western Rif Mountains, approved plans in February 2017 to develop an 8-ha industrial zone in the Dardara commune. The city has set aside Dh5.5m (€509,000) for land acquisition. The zone will cater to small and medium-sized enterprises (SMEs) in agricultural production. In hand with the new areas, easing access to affordable land would also encourage SMEs to expand.