Marrakesh- The Moroccan government insists that 2014 will be a good year despite the fall in phosphate exports and the likelihood that agricultural production of cereals may fall by 31% this year due to adverse conditions. Growth projections from the IMF, World Bank, and the HCP vary from 3 to 3.5%.
Morocco’s automotive sector has now done better in exports than in phosphates, as OCP encounters a difficult world market. Indeed, export figures on the whole rose 7.4% to 101 billion dirhams. It will therefore fall to tourism to help bridge the gap in the budget deficit: the tourism sector saw revenues increase by 3.6% in the first half of 2014, achieving a growth of nearly 26 billion dirham and offsetting the trade deficit by 54%, according to the North Africa Journal. The sale of Vivendi’s stake in Maroc Telecom benefited state revenues by some 1.4 billion dirhams, as did the financial donations by Qatar and a number of EU loans. Furthermore, foreign currency reserves stand at 20 billion dirhams, which provides 5 months of import cover.
Much, therefore, depends on tourism. On the eve of the 11th tourism conference, the National Association of Investors (NAI) is calling for investment incentives for the 2020 plan to support venture capital investment in tourism projects, according to Les Eco. Leila Haddaoui, president of the NAI, points to the need for investment incentives to encourage investment in areas meant to encourage development. The tourism charter signed in 2011 is, the article says, still not confirmed, even though it is half way through the program period for the 2020 plan. Banks are reluctant to provide investment and 28 billion dirhams will be required to finance the 2020 plan—with only 28% to be funded by public companies. The NIA is also arguing over the application of 10 % VAT on equipment. Moreover, they insist that Plan Azur projects should be completed before starting on the 2020 Plan, but only Saidia and Mazagan have so far been mostly completed.
One is left to ask whether there is a structural weakness in regards to investment for both plans; bearing in mind that new tourism projects are estimated to take 15 to 20 years to break even.
The Prime Minister Abdelilah Benkirane chaired the meeting of the Strategic Committee on Tourism in Rabat on the 20 September. According to MAP, he highlighted the potential of the tourism industry that employs more than 480,000 people and generates annual sales of 60 billion dirhams in foreign currencies. He called on all stakeholders to continue efforts to encourage investments, overcoming financial difficulties, find solutions to problems over land, and make available qualified human resources capable to meet the needs in this area. He also called for increased air transport agreements to expand the sector.
Significant Gulf investments of over $5 billion have already helped the Moroccan tourism sector, but more investment will be required.
Foreign investors have complained about bureaucracy, and difficulties have occurred with investors opting out of the Plan Azur. Some question whether the 2020 plan—which calls for an increase to 20 million tourists by 2020—is possible. In the short term, Morocco’s tourism figures are rising, but so are the costs, and Morocco is becoming an expensive location as the financial crisis is limiting tourist budgets. Meanwhile, Spanish tourism is seeing resurgence as its economy improves and it is far less expensive than Morocco. An estimated 8.3 million foreign tourist arrived in August 2013, the highest number since records began in 1995, and 7.1% higher than in the same period in 2012, according to the Spanish Tourist Board.