Nothing’s quiet on the eastern front: Growing investment and national integration boost the region

After a decade of investment, Morocco’s Oriental region is ready to build a strong reputation in the Mediterranean. Nestled between the Algerian border and the Mediterranean Sea, Morocco’s Eastern Region is strategically located along the southern European basin. After decades of underdevelopment, it has become the recipient of extensive governmental investment.

Morocco’s government has often channelled funds into the central areas of the country, with urban, industrial areas in cities like Tangier in the north and Oujda in the east suffering as a result. For years, the Oriental, as the Eastern Region is known, suffered from insufficient transport connections to the rest of the country and a lack of the infrastructure necessary for supporting the development of family-owned businesses and strategic industries. Adding to this, the closure of the Algerian border almost 20 years ago dealt a serious blow to an area of the country with strong cultural and family links with its neighbour.

However, an increased focus by the government on devolving some decision-making powers as well as improving both growth and social development indicators in areas outside of Casablanca and Rabat has led to a shift in policy and the influx of government support of the kingdom’s regional governments.

ADDING INTEREST: As a result, over the past 10 years, infrastructural upgrades of road, air and sea transport links have greatly improved the business environment in the Eastern Region. And with the establishment of a comprehensive regional development strategy focusing on industrial expansion, tourism promotion and agricultural output, the Oriental is hoping to see a significant expansion in both trade and capital flows over the medium term. Attracting private investment has been a main priority. According to figures by the Regional Investment Centre in Oujda, the Oriental attracted Dh7.9bn (€703.2m) of private investment in 256 different projects in 2012. About 83% of new projects were in the building and construction sector, along with 6% in secondary industries and 4% in the tourism sector.

A ROYAL INITIATIVE: Much of the drive to equip the Oriental with the necessary means for development started in March 2003, with a visit by King Mohammed VI. The push by the monarchy, which also sought to improve development in other previously ignored regions, such as the North, represents a new economic positioning of the region, with an emphasis on generating domestic consumption and output rather than relying on neighbouring Algeria to galvanise trade-driven economic expansion. Historically, the Oriental’s economy has been based on agriculture, animal rearing, industry and mining. It has also benefitted from fishing along its Mediterranean coastline and had relied significantly on cross-border trade with Algeria.

In the 1960s, however, in what would prove to be the first blow to the region, a large portion of mining activity stopped, prompting heavy unemployment (a trend that has continued, standing at 17.7% in 2011). And after a political spat between Morocco and Algeria following a terrorist attack in a hotel in Marrakech, which was stoked by ongoing tension over the Moroccan/Western Sahara, the border between the two countries was closed in 1994, during Algeria’s civil war. These factors, in addition to low agricultural yields, encouraged a migration wave to both other parts of the country and to Europe. One-third of Moroccans living abroad today come from the region.

COMPOSITION OF THE REGION: The Royal Initiative for Development of the Eastern Region launched Agence de l’Oriental in 2006, with the goal of helping the region’s local authorities to establish development strategies and stimulate economic activity. Additionally derived from the royal initiative was the creation of the Regional Investment Fund, put in place to support local business growth through equity investment in the region’s companies (see analysis).

The Eastern Region is located in the north-eastern corner of the kingdom, with a 200-km Mediterranean coastline to the north. To the east lies Algeria, where the border is closed only a few kilometres away from the region’s capital and largest city, Oujda. Oujda is the region’s main urban centre with a population of 500,000 and Morocco’s easternmost city. It houses the regional council and it is the Oriental’s centre for business and government administration. It hosts the Oujda Angads Airport, the Université Mohamed Premier and the Al Farabi Hospital. The city is also undergoing major urban renewal (see analysis). A brand new Dh525m (€46.7m) University Hospital Centre is under construction and will improve health service provision in the region and training capabilities for regional health staff. To the west, the Oriental is linked to the adjourning regions of Taza-Al Hoceima-Taounate and Fez-Boulmane. To the south-west, is the region of Meknés-Tafilalet. On a peninsula on the region’s Mediterranean coast is the Spanish enclave of Melilla. With a population of 2m people and an area of 82.8 sq km, the Eastern Region is the second biggest of the kingdom’s 16 regions in terms of area, occupying 11.6% of national land. The region is divided into the prefecture of Oujda-Angad and six provinces: Nador, Driouch, Berkane, Taourirt, Jerada and Figuig. These include 27 urban communes and 87 rural ones.

CHALLENGES: The closed border has had a significant impact on the regional economy, particularly in terms of contraband and informal activity. The Regional Strategic Plan for the Eastern Region, which was published in 2011 by the regional council, estimated that some 46% of commerce activity in the region was informal, based on 2009 figures. This is a challenge that authorities face when trying to improve the governance of local businesses and structures, especially in their efforts to spur greater investment and activity. Banking credit and capital investment in equity, which can be harnessed to help grow local businesses, require strict transparency rules. “Many companies in the region are family-owned and have part of their business in the informal sector, and it can take a long time to integrate them into the formal sector and encourage them to become more transparent,” said Ali Belhaj, the president of the regional council.

TACKLING ISSUES: Such a high figure for informal activity is not surprising nor particularly unique to the region – estimates of the informal economy in Morocco can range well above one-third of total activity. In a lot of ways, the challenges of the Eastern Region remain the same as other regions in Morocco, bar for the fact that, for several years, these have been compounded by its isolation and insufficient economic integration with other more developed parts of the kingdom.

Unemployment is also an issue in a region that has for years contributed heavily to the Moroccan diaspora, especially in Europe, where about 1m emigrating Moroccans are from the Eastern Region. As a result, a number of broader national strategies should also help unshackle growth drivers in the Oriental to varying degrees. The Green Morocco Plan – launched to develop the agricultural sector – is being translated into a total of 77 agricultural development programmes across the region. Plan Azur, which oversaw the creation of six beach tourism areas, had an impact on the region’s north coast with the building of the Saïdia Resort. Morocco’s industry development strategy, the National Pact for Industrial Emergence (Pacte National pour l’Emergence Industrielle, PNEI), was put in place in 2005 to focus on the expansion of industrial capabilities up to 2015, and will manifest itself in the region through the establishment of industrial areas to attract new companies and increase production capabilities.

HIGH AIMS: The regional government has also been aggressive about setting its own targets for growth. Local authorities want to create 137,500 new jobs and increase the number of people working from 538,700 in 2009 to 676,200 by 2020. To sustain this, the region is aiming to maintain an annual growth rate of 7.3% to raise regional GDP from Dh35bn (€3.1bn) in 2009 to Dh77bn (€6.85bn) in 2020. This goal might be difficult to achieve, considering the economic downturn in Europe and regional instability in neighbouring North African countries, as well as the kingdom’s overall growth rate, which is half that. Significant work will need to be done to make that target feasible – which explains in part the extensive work going into the upgrading of both hard and soft infrastructure.

“We need to think beyond the current international context of financial crisis and make sure that we establish the infrastructure necessary for receiving national and international investment,” said Belhaj.

Agence de l’Oriental, which promotes international cooperation for regional development, has concluded agreements in various areas, both at the bilateral and multilateral levels. "These include a project with UNCTAD on attracting foreign investment; with UNDP to combat unemployment; an agreement with the Andalusian authorities to promote the EU’s neighbourhood policy; and a partnership with the French city of Lille to develop rural tourism,” Taoufiq Boudchiche, director of international cooperation at the agency, told OBG.

CONNECTING THE DOTS: Some of the largest strides, are being made in the area of infrastructural improvement, particularly to road and rail networks. “Highway links are definitely helping to bring logistics costs down. Transport spending has traditionally been slightly higher for companies based in the Oriental. In our case, some imported products might end up costing us an extra 8% because we have to bring them all the way here,” Ahmed Nasri, the regional director for hypermarket chain Marjane in the Eastern Region, told OBG.

Transport has been one of the government’s top priorities in the Eastern Region. Over the past few years, increased connectivity has alleviated the region’s isolation and eased access for local industries that need to send goods to other areas of the kingdom or reach Morocco’s main export points into European markets.

Much has been accomplished in terms of road transport and the regional road network now measures 6000 km. Three projects have specifically affected the flow of goods and movement of people to the region. A new 320-km highway running from Oujda to Fez has connected the Oriental’s largest city to the country’s motorway network. The coastal highway, known as La Rocade Mediteranéenné, runs from Saïdia to Tangier, reducing travel time from the resort at Saïdia to the country’s largest deepwater port at Tangier from some 11 hours to seven. It was built at a cost of Dh7.2bn (€640m). The 120-km dual carriageway from Oujda to Nador, currently under construction, should also ease transport of goods into the future Nador West Med port.

Improvement of rural roads in the Berkane province, the region’s largest agricultural exporting area by volume of produce, will also improve internal congestion and distribution. Investment is due to reach Dh700m (€62.3m) over the next seven years, according to the governor of the Berkane province, Abdelhak Haoudi. Should the Algerian border open, the region would also be connected to the Algerian highway network, facilitating easy access to the nation’s two largest cities, Oran and Algiers.

LIFT OFF: The region now has two airports. The larger of these, Oujda Angads, is located approximately 10 km from the capital city. Equipped with two runways, the longer running some 3000 metres, it has the capacity to receive commercial aircraft. Work was recently completed on a new 30,000-sq-metre terminal that has increased the airport’s capacity to 3m passengers a year, but airport authorities expect capacity to be raised to 3m passengers in the coming years. “We currently operate at one-fifth of potential capacity, receiving some 600,000-700,000 passengers per year. The airport can thus be a great generator for economic development,” said Mohcine Benhadouche, manager of Oujda Angads Airport.

The smaller Nador Aroui International Airport, 24 km south of Nador, can receive up to 750,000 passengers a year and has several daily flights to European capitals. Also close by is the EU-regulated Melilla airport which has daily connections to several cities in Spain. In the south, the small Bouarfa aerodrome has the potential to serve tourism expansion by cutting the four-hour drive from Oujda to a short flight. This would give foreign visitors easier access to the Figuig Oasis.

UNDER STUDY: Only one small port serves the region: the Nador Port at Beni Ansar, which can receive ships of up to 200 metres and is equipped with five quays. The port is nonetheless underused. Its proximity to the Spanish port at Melilla as well the lack of sufficient commercial cargo and container lines serving it has changed its focus to passenger traffic; 598,710 passengers and 2.5m tonnes of trade passed through it in 2011. Hoping to modify this, a feasibility study is under way by the regional office of the General Confederation of Moroccan Businesses (Confédération General des Entreprises Marrocaines, CGEM) to assess the tonnage in the region that could be shipped through the Nador Port. “If we do not have enough tonnage, we might be able to work in conjunction with the neighbouring regions of Fez and Meknés,” said the Oriental regional president of CGEM, Abdelkrim Mehdi. A key component of the region’s attempt to boost maritime trade – and also increase access for both exporters and imports – is the Nador West Med Port, a Dh6bn (€533.4m) project currently in progress that will not only try to replace the existing Nador Port, but also serve as the key maritime conduit for the Oriental to Europe and the Mediterranean Basin. The project is slated for completion in five years (see analysis).

LAYING TRACKS: Railway links are fairly limited, and the country’s planned high-speed rail will – at least in its first phase – bypass the region. Currently, a 650-km railroad links Oujda to Casablanca, and a new terminal station is in the works. An old one-way line established between Oujda and the remote town of Buarfa is still in operation today, mostly for tourism purposes through the Oriental Desert Express to the south. The city of Nador is connected to Oujda by a 117-km line. There are plans for Nador West Med Port to be connected to the national railway grid through the Nador line.

PLUGGED IN: Over the years, the Oriental region has received most of its energy from the Jerada coal-fuelled electricity plant, with a production capacity of 165 MW, as well as two hydroelectric stations in Mohamed Khamis El and Bou Ateg. It is also connected to the Algerian grid, enabling it to receive an additional 950 MW from its energy-rich neighbour.

However, solar energy is proving to be an attractive resource for both domestic production as well as for export to Europe. Capacity was extended with the building of the Aïn Beni Mathar thermo-solar station, in the province of Jerada. The 472-MW plant was built at a total cost of around Dh4.6bn (€408.9m) and started production in 2010, using a combination of solar and gas energy production. The plant was primarily financed by the African Development Bank in partnership with the Global Environment Facility and the National Electric Authority.

Solar capacity will also be increased through the construction of a 2000-ha solar park due to be established close to the Aïn Beni Mather plant. The new park, which is scheduled to start operations by 2020, will have a 400-MW production capacity and will be one of the five solar parks to be built under the Moroccan Solar Plan across the country. Indeed, the Oriental has become one of the leading areas in terms of solar energy production in the country under the kingdom’s objective to increase its usage of renewable energies.

Authorities also hope that the added focus on renewable energy will spill over into local industrial capabilities. National renewable energy development plans include the goal of procuring 30% of the necessary clean energy technology from Moroccan companies. The Oujda Technopole, which is set to include 500 ha for industrial development, has already started commercialisation of a 107-ha section, of which 40 ha will be devoted to clean energy technologies and equipment firms (see analysis).

CONSTRUCTION: Boosted by the slew of infrastructure development projects over the past decade, the region’s construction materials sector, which has traditionally been composed of small and medium locally based companies, has seen robust growth in recent years. The increase in the establishment of quarries, which grew from three to 12 in the region between 2000 and 2010 highlights the jump in activity.

“The region has a lot of land available that could be developed for commercial purposes, which presents a good opportunity for the region,” said Driss Houar, the CEO of Houar Enterprise, a construction firm in Oujda.

The province of Nador, which has long been a centre for the brick manufacturing industry, now has over 23 local companies, some of which export across the country. Sonasid is present, with a steel production unit in Nador that manufactures 600,000 tonnes a year. Major foreign players are active as well. Swiss cement manufacturer Holcim has been in the region since 1979 and became majority shareholder of a cement factory in Oujda in 1992. “Construction activity in the region has significantly increased since 2004, following the royal decree. Many of the big projects needed a lot of cement. Now, more projects are private and of a smaller scale,” said Khalid Kaaouachi, the director of Holcim’s cement production unit in Oujda.

Indeed, while it had been public spending that spurred the majority of initial development activity, nowadays construction companies in the region are increasingly catering to more private projects. Much of the Eastern Region’s urban areas are now being renovated and increasing the number of affordable housing units has been one of the priorities.

Partnerships between private and public real estate operators are helping to build more than 33,000 affordable homes between 2010 and 2020, at a total investment of Dh8.2bn (€729m). In the coming years some 14,749 housing units will be built in the prefecture of Oujda-Angad, along with 11,608 units in the province of Nador, 4470 in the province of Berkane and over 2000 units in the town of Jerada.

FINDING THE EDGE: Smaller roads in a number of the region’s provinces are also currently under renovation. Competition between local construction companies is pushing prices down and affecting revenues.

“Prices offered for projects have decreased,” said Noureddine El Gourdi, the administrative chief for Société D & CRB, an Oriental-based construction group. “There are too many companies active in this sector in the Oriental, so new niches will need to be explored.”

Given the surge in government investment that has occurred since 2003, construction firms and materials manufacturers might find it hard to sustain growth levels from this period, although the Nador West and Marchica ports and the expansion of the Saïdia Resort should help bring renewed activity to the region.

REELING VISITORS IN: With a variety of sites of interest that include a 200-km coast, mountainous areas, thermal springs and the southern oasis region of Figuig, the tourism sector is not lacking in attractions, but does need an overhaul in terms of hotel capacity and infrastructure. The region’s total capacity is currently around 8000 beds, according to figures from the Regional Delegation of Tourism in Oujda. The overall goal is to endow the region with a total of 120,000 hotel beds before 2025, a massive increase in capacity. As with the rest of Morocco, tourism is considered a crucial component to improving the regional economy. The tourism sector is one of the kingdom’s largest foreign currency earners, but the slowdown in its most significant market, the EU, has had an impact recently.

Still, the central government has pushed ahead in a bid to entice tourists from new non-traditional markets, with the national Plan Azur strategy, which aims to expand beachfront tourism (see Tourism chapter). A key part of Plan Azur was the construction of a number of new resorts, including Saïdia in the Oriental.

Over the past four years, most of the region’s tourism development focus has been geared towards the Saï- dia project, the first resort to be developed under Plan Azur. The Saïdia Resort was inaugurated in 2009 through the opening of its first two five-star hotels. A third one was eventually added, bringing the total bed capacity to 4000, or half of the region’s total accommodation capacity. In the first three and a half months of activity, Saïdia received some 37,000 tourists.

WORK TO COME: But the project is still some steps away from its final goal of a 30,000-bed capacity, distributed over a total of nine four- and five-star hotels and 3000 residential villas. Amenities will also include three golf courses and a 1350-berth recreational marina, of which 750 berths are already open. Original plans have been delayed due to the developer’s inability to secure credit under difficult financial conditions.

Initially, the Society Organisation of Saïdia (Société d’Aménagement de Saïdia, SAS) owned 10% of the project, partnering with the government’s development agency, CDG Développement, which had 60%, and the state’s investment arm for the tourism sector, the Société Marocaine d’Ingénierie Touristique. The New Company of Installation of Saïdia was set up in 2011 to oversee the completion of the project. SAS pulled out of the tourist side of the development, selling its share to CDG for Dh1bn (€88.9m), but is retaining ownership of the project’s residential component. CDG has agreed to add the next 3000 beds with the building of three more hotels by 2014. More public works for the town’s water management network have also helped with improving standards.

Despite being dogged by a slow start and construction delays, Saïdia is already having an impact on diversifying tourist arrivals in the Eastern Region. “Before the opening of the Saïdia Resort, visitors to the region were 51% Moroccans and 49% foreigners,” Amine Abdellaoui, the regional delegate for tourism told OBG. “Now the mix of nationalities is slowly changing, and 67% of tourist arrivals to the region in 2012 were foreigners.”

SEASONAL EFFECTS: Moroccans living abroad have long been an important component of the visitor profile (in fact they are counted as foreigners for tourism purposes), but the resort has had some notable success in boosting the number of European travellers over the past two years, with new tourists from Poland and Russia brought in by charter flights to the Oujda Angads Airport in the summer. Seasonality remains one of the main challenges of the resort, which has an 84% occupancy rate in the summer months, but drops to 34% during the remainder of the year, which is considerably below the average yearly occupancy rates for hotels across the country. “Saïdia is the region’s calling card, but we need to develop additional products around the region that will allow the visitors coming for beach tourism to extend their stay,” said Abdellaoui.

Another large-scale tourism resort is set to become one of the region’s most ambitious projects in terms of investment volume as well as with regards to its sheer size. The Marchica Med tourism zone, which will include seven newly built towns, is set to transform the 25-km-long Nador lagoon into a high-end tourism zone geared towards local and foreign visitors. With a total investment of Dh46bn (€4.1bn) and an area of 4000 ha, the project will be under development over the coming years. Total hotel capacity is set to reach 84,000 beds after its expected completion in 2025.

Driving this ambitious project is the Marchica Med Development Company, set up in 2008 with capital totalling Dh500m (€44.5m), divided in equal parts between the state and the Hassan II Fund. For each of the seven specific tourist towns to be created around the lagoon, a specific development company will be created with the input of private investors. The projected impact of the project on the region is substantial. It is estimated the development will create 80,000 direct and indirect jobs, 15,000 of which will be brought in during its construction phase. Besides several hotels, the resort will also include 2400 apartments, 1000 villas and an ambitious six marinas.

Cité d’Atalayoun, the first section of the project, expected to be completed in 2014, will be built in a 45-ha area. Its design includes a 360-room hotel, 650 villas, 2230 apartments and two marinas. The second tourist town, Cité des Deux Mers, will be built close to the spot where a channel opens the lagoon up to the Mediterranean. It will have 320 villas, 193 apartments and 280 hotel rooms, for a total capacity of 3252 beds. Completion is set for 2014, and the project will include the establishment of a new water channel to the sea to reduce currents inside the lagoon and allow for better flow of water.

THINKING SMALL: Despite the considerable efforts and investment being directed towards seaside mass tourism, several other regional attributes can be developed for smaller-scale niche tourism. This will help diversify tourism in the Eastern Region, protecting it from the volatility that has affected other major tourist destinations such as Sousse and Hammamet in Tunisia, and should also have a positive impact on the more isolated areas to the south. Authorities have identified over 30 specific sites that could be developed to expand the benefits of tourism to other areas inland from the Mediterranean coast (see analysis).

The size of the Marchica and Saïdia projects can support the region’s economic growth. However, given the hesitant nature of lenders in Europe and the US, authorities might find attracting private capital to be harder than initially planned. This may potentially delay the completion of the two projects past their established deadlines. Another challenge for the local tourism sector will be to train enough skilled labour to support the Marchica and Saïdia projects. The Saïdia Hotel School trains between 80 and 100 students a year. Added to this is the country’s Bureau for Professional Training and Employment Promotion, which opened an office in Nador to respond to the future needs of the Marchica Med resort.

OFFSHORING: The region’s geographic proximity to Europe is advantageous for activities other than tourism, with the government targeting increased investment in information technology (IT), and in offshoring and nearshoring in particular, which all offer the potential for job creation and improved tertiary sector activity. The expansion of the IT services sector is already part of the PNEI, which aims to position the kingdom as a key destination for the sector, and includes a target for outsourcing to create 70,000 new direct employment positions between 2009 and 2015.

In the Oriental region, offshoring activity got a boost from the arrival of SQLI, a French IT services provider with operations in several European countries. The company arrived in the regional capital in 2005 under an agreement with the Université Mohamed Premier in Oujda, opening an IT services centre as well as a research and development unit within the university, which focused on open source technology. The company currently employs over 100 people in Oujda.

The region expects more activity to come with the opening of Oujda Shore, an industrial park specifically for offshoring activities within Oujda Technopole. The project, managed by MEDZ (a subsidiary of CDG) and the Ministry of Telecommunications, is set to open in 2013, aiming to attract IT outsourcing companies to its 22-ha park. The overall investment in Oujda Shore will be €500m, and the government expects that a successful replication of offshoring parks created in Rabat and Casablanca will attract businesses looking to take advantage of the region’s competitive salaries and Spanish- and French-speaking workforce.

HUMAN RESOURCES DEVELOPMENT: The ability of the IT outsourcing sector, along with other secondary and tertiary sectors, relies heavily on the region having a qualified labour pool. There is a disconnect – as there is throughout Morocco – between the skill sets of recent graduates and the job market’s needs, which has led to a worryingly high youth unemployment rate. However, the basics are in place to improve the situation, which is crucial given that over half of the region’s population is under 25 years of age.

FRAMEWORK IS SET: The Oriental’s higher education institution, the Université Mohamed Premier, was established in 1978 and currently has over 35,000 students at its three campuses in Oujda, Nador and Al Hoceima. The university is designing its teaching policy around some of the activities prioritised under the PNEI, such as agro-industry, renewable energies, civil engineering, transport and logistics, and IT. This will be essential to create the region’s future pool of professionals, who are increasingly seeking opportunities in the Oriental rather than in other regions. “It is encouraging that graduates who initially moved to Casablanca and Rabat to work are now returning to seek opportunities in the Eastern Region,” said Aomar Anane, the vice-president for research at Université Mohammed Premier.

The university is also focused on cooperation with the private sector, by allowing new business ventures to establish themselves at its entrepreneurship centre, Maison de l’Entreprenariat. This opens up basic infrastructure for new developing companies whilst also allowing university students to get work experience through internships. “As the country moves into regionalisation, we also want to decentralise our teaching throughout the region,” said Abdelaziz Sadok, the university’s president. The university is also considering opening a tourism campus in Saïdia over the coming years to eventually increase the number of trained human resources (HR) for the growing tourism sector.

Morocco’s Bureau for Professional Training and the Promotion of Employment (Office de la Formation Professionnelle et de la Promotion du Travail, OFPPT), has 25 offices in the region. According to a regional study published by the UN in 2012, the OFPPT was giving training to 17,025 interns in all sectors in 2010-11. Through its regional offices, the bureau has been focusing on more training for tourism, IT and offshoring activities.

THE RISE OF RETAIL: The boost in public spending and improved physical infrastructure has begun to stoke local consumption, with domestic trading also on the rise. Authorities expect that the informal sector’s influence on local commerce can be reduced to 35% by 2020. Illegal trading is conducted mostly in petrol and daily-use products such as household items. But contraband activity has become less attractive given the reduced import duties as part of the Morocco-EU Association Agreement and the potential drops in government subsidies due to the country’s twin deficits.

Other signs that informal activity is less of a threat have come from the success of newly arrived retail outlets, which have risen in number since 2007. The hypermarket chain Marjane was the first to arrive in the region, and currently has two stores in Oujda, one in Saïdia, one in Nador and, most recently, a fifth store in Berkane. It was followed by Aswak Assalam, another retailer with three stores in the region; Carrefour, present in Oujda and Nador; and Metro and Label’Vie, which each have one store in Oujda.

The extent to which informal activity contributes to the domestic economy nonetheless skews retail activity to a greater extent than elsewhere in the region. Contraband products include cooking oil, detergents, flour, cookies and kitchen utensils. The same five-litre bottle of cooking oil priced around Dh65 (€5.78) in a Marjane store can be found at about Dh50 (€4.45) in the informal market in central Oujda. According to supermarket chain’s representatives in the region, more choice and better product standards are helping to move consumers away from contraband products. “Consumers want what is new and like the availability and variety of brands. The establishment of retailers in the region is also helped by the large number of Moroccans living abroad that are used to brands available in Europe and want the same type of products when they return home,” Marjane’s Nasri told OBG, pointing out that sales at its Oujda store have been growing at an annual rate between 4% and 8% since it opened.

OUTLOOK: The Oriental region has made a key choice to invest in infrastructural development. Over the past decade, this has equipped the region with the necessary conditions for its companies to expand into other domestic regions as well as to target European markets. The region’s fortunes will also be enhanced with further integration with Morocco’s neighbours. An open border with Algeria could have a positive economic impact on growth. Sustained investment in new industrial zones and the regional focus on strategic sectors will also help to foster a strengthened private sector.