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Export & Investment Opportunities
Morocco, Tunisia, Algeria
S.Abidi
Editor, Foreign Trade Update
Research Advisor
GOG_AMA Centre of International Trade
African Common Markets in future
• African Continental Free Trade Area (AfCFTA)
• Will become world’s largest tariff-free common market
• 52/54 countries has signed
• Came into force in June 2019
• A market of 1.2bn. People
• Large scale industrialisation (Present share of manufacturing in GDP is 10%)
Morocco-Highlights
Strong and Stable Macroeconomic Performances
A strategic position, only one hour from EU
Free Trade Access to One Billion Consumers
World Class Infrastructure
Most attractive country for foreign investment in Africa in 2018 (Quantum Investment)
1st in Africa in terms of infrastructure quality according to Global Competitivness Index-WEF 2016-2017
Diversified & Market Oriented Economy
69/188 in “Doing Business” RankingPer capita GDP - $3300
Ethiopia per capita GDP-$750
Investment Scenario
Strong Points
A legal framework and assistance measures very favourable to investors
Relatively low labour cost
A strategic location, between Europe and sub Saharan Africa
A young and relatively well-trained population
Political stability encouraged by the popularity of the King, Mohammed VI
Weak Points
A relatively small internal market
A country still highly dependent on agriculture and therefore vulnerable to natural disasters and the price of hydrocarbons
Administrative burdens slowing down, among other things, the start of business activities
Significant social disparities by region (rural vs. urban) and a high poverty rate
High unemployment rate and low productivity
A lack of transparency in public procurement
Investment Scenario
Strong Points
A legal framework and assistance measures very favourable to investors
Relatively low labour cost
A strategic location, between Europe and sub Saharan Africa
A young and relatively well-trained population
Political stability encouraged by the popularity of the King, Mohammed VI
Weak Points
A relatively small internal market
A country still highly dependent on agriculture and therefore vulnerable to natural disasters and the price of hydrocarbons
Administrative burdens slowing down, among other things, the start of business activities
Significant social disparities by region (rural vs. urban) and a high poverty rate
High unemployment rate and low productivity
A lack of transparency in public procurementIndustrial Acceleration Plan
Industry’s contribution to GDP from 14% to 23% by 2020
Morocco Costs
Automotive Sector
• In 2018, overtook South Africa in auto production
• 345,000 vs. 331,000
• Tangers Auto City
• Oriented towards exports to Europe
• 29% share in Morocco exports
• Now looking at African market
• 60% local parts. Imports growing
• Market for casting & forging components
• Some Indian components forms have opened plants
HSC-8708 Auto parts imports 2014-$0.44bn. 2018-$1.15bn. 100% growth in four years
Automotive Sector
Subcontracting Auto Fair, MoroccoECOWAS Market
350 mn. population
Aerospace Sector
130 companiesDouble capacity by 2020Separate Free Zone
Fastener cost automotive $0.5Aerospace $9.00
Imports2014-$295mn.2018-$821mn.
Pharmaceutical Sector
Second largest in AfricaOver 50 plantsTwo pharma cluster- Medicines- Medical devicesAccelerated drug registration processSatisifies 65% of local demand8-10% exports6.7% growth in pharma marketDemand for imported APIs.
Cipla JV Inhalation Plant
Sun Pharma19 brands
Other Industries
Textiles – 25% of total exports
Demand for parts, chemicalsOver 2,000 chemicals used in textile industry
Chemical IndustryOrganic chemicals import
2014- $340mn.2018-$360mn.
Food Industry importsIngredients, enzymes,
flavours, colours
Morocco Imports
• Total imports India’s share 1.5%
• 84 Machinery $5.2bn 1%• 85 Electrical $4.89bn. 1%• 87 Vehicles & parts $5.13bn. <1%• 39 Plastics $2.11bn. 1.5%• 29 Organic chemicals $489mn. 8%• 30 Pharma $626mn. 5%• 71 Precious stones & jewellery $104mn. 3% • (Growth 187%)
Free Trade Agreements
Only FTA with US in AfricaEU, EAEU, Turkey & Arab Nations
Tunisia-Highlights
• Ranked as one of the most competitive economies in Africa
• Tunisia is ranked 1st in North Africa in terms of
-Talent Competitiveness | "Global Talent Competitiveness Index 2017, INSEAD“
-Entrepreneurship Ecosystem | "Global Entrepreneurship Index 2017, GEDI“
-Innovation | "Bloomberg Innovation Index 2017, Bloomberg"
-Competitive Industrial Performance | "Competitive Industrial Performance Index 2016, UNIDO"
-ICT Development | "Measuring the Information Society Report, 2016"
-Transition to E-commerce | "B2C E-commerce Index 2016, UNCTAD"
- 1st worldwide exporter of dates
-2nd African producer of car components
-2nd exporter of organic produce in Africa
-3rd worldwide producer of olive oil for the 2015-2016 harvest season
GDP per capita - $11,000
Investment-HighlightsStrong Points
The solvency of the country gives it access to international capital markets and allows it to find its place in the world economy.
The growing diversification of the economy (tourism, mining production developed in phosphates and oil sectors, etc.) strengthens its resistance to economic crises.
The economy can rely on a young, fairly skilled and productive workforce at competitive pay levels
• The country's proximity to the European market and its association agreement with the EU: the capital city Tunis is, on average, two hours flight from the main European capitals
• The social system is well developed and an ambitious education policy has been launched; it aims to reduce the social cost of adjustment and strengthen the modernisation of the country.
• The political transition has been gradual and relatively peaceful (in comparison with Egypt and Libya, for example), creating a generally positive business environment.
Weak Points
Economic reform in Tunisia has not kept pace with political reform since the revolution of 2011.
Issues of corruption and nepotism
Prohibitive customs and tax regimes continue to pose barriers to small and medium-sized enterprises.
State-owned enterprises still play a large role in Tunisia’s economy; many sectors remain closed to foreign investment.
The informal sector is large (estimated at 40-60% of the economy by the U.S. State Department).
According to a report on Tunisia by the IMF (February 2016), the lack of access to finance, the ineffectiveness of public institutions and stringent labour regulations are among the key constraints to higher private investment in the country.
Deadly terrorist attacks, including those targeting foreign tourists, have put a damper on investor confidence.
The high level of youth unemployment (above 30%), as well as unemployment among those with university degrees (about a third of the unemployed), are seen as potential risks to social and economic stability.
The country's high public debt and the great dependence on the European economy make the Tunisian economy vulnerable.
Aerospace81 companies
70% exports to EU
Main exports- electrical assemblies, electronic components, aerospace equipment and systems, precision mechanical parts, precision sheet metal parts, engineering plastic parts, computer software, wiring harnesses (wiring, assembly of electronic sub-sets), surface treatment and the painting...
Imports consisting mainly production tools (machines) and raw materials such as aluminum plates, bars and rods, copper alloys, stainless steel products, plates and sheets of rubber, and composites.
Other main industries
Agro-Tech Park
Food Leather & footwear
Plastics Textiles & apparels
Mechanical & Electrical2nd largest manufacturer of auto
components in Africa
First country to develop pharmaceutical industry in Africa
35 production sitesMeets 50% of local requirement
Only 6% exportsPharma City
International Trade
FTA with EU70% trade with EU
Free Trade Agreement between Egypt, Jordan, Morocco and
TunisiaAlgeria, Libya
MemberCOMESA
400mn. Pop.
Applied forECOWAS
330mn. Pop.
Major imports
Total Imports $20bn.India’s share 1%
Good Prospects from India
Plastics – India rank no.15Electrical – India rank 19
MechanicalCotton – India rank No.11
Sugar & confectionery-India No.19 Organic chemicals – India No.3
2 wheelerAgro products
Software
Tata pickup
Algeria-Highlights
• Africa’s fourth largest economy• Stable political environment• Low cost of natural gas• Large reserves of hydrocarbons• GDP per capita USD4000• 86% literacy
Oil & Gas – 95% of export earningsGDP growth-2.6% in 2019
Food Sector
Largest per head consumer of milk and dairy products in North Africa
Major demand for refrigeration equipment and parts
Equipment and parts for fruit & vegetable processing
Food ingredients, flavours, colours, essences, enzymes etc.
Auto Sector4th largest market in Africa-500,000 units
Local assembly 2017 – 100,000 units2020 – 400,000 units
Local supply of parts – 5%Growth in Import of parts – 78% from 2017 to 20182017-$2.1bn.
PharmaceuticalsAfrica’s second largest market - $3.7bn.
61% medicines locally produced
Government incentives to increase local production to 100% in five years
Investment $1.2bn.
Low oil & gas prices have scaled down healthcare budgets & infrastructure programs
Import restrictions on pharma & medical devices
TextilesPhase I – 8 textile plants
Phase II – 10 textile plants (by 2020)
Relizane Textile Complex
International Trade90% of spare parts are imported
High demand for
Machinery 1.4% shareVehicles & Parts 7%
2W kits Plastics 2%
Pharmaceuticals 5% shareSugar & confectionary
Agro & other specialty chemicals 2% shareAnimal Feed
Total imports declined from
$5.86bn. In 2014 to $ 4.88 bn.in 2018
Major import items from Indiachickpeas, milk powder, rice, spices, Automobilesspare parts, agricultural and industrial machinery and equipment (Tractors andTransformers), pharmaceuticals, mobile phones and cosmetic products.
Services-3 countriesHighly educated countriesHigh demand for services such as software application & educationFintech-Agrotech-IOT-Mobile Apps.TourismEnglish Language TeachingImaging & Diagnostic Centres
