The new Investment Charter plans to increase the share of private investment, representing only nearly a third of the Kingdom's total investment, to two-thirds by 2035. But what exactly is the Investment Charter about?

Investment in Morocco is changing course. At the end of last November, the government spokesperson announced that the project for the new Investment Charter was in the making of the government. A project that would provide a clear vision to investors and companies in order to fully ensure their role in supporting the national economy and accelerating the execution of investments, especially those with an impact in terms of creation of job opportunities.

Today, the project is finalized. Indeed, the new Investment Charter was the subject of a working session chaired by HM King Mohammed VI, last February in Bouznika.

Moroccan reforms to promote private national and foreign investment

Roughly speaking, public investment reached 245 billion dirhams, according to the 2022 Finance Law, for 230 billion in 2021 and 198 billion in 2020. An envelope which represents, according to the New Development Model (NDM) report, 65 % of total national investment against 35% carried by the private sector.

Thus, the Moroccan authorities have undertaken several reforms that have made it possible to put in place a liberal legal framework with the aim of promoting private, national and foreign investment. This framework enshrines freedom of enterprise and offers the necessary guarantees to investors while simplifying the formalities and procedures required in this area.

In the same vein, the Sovereign had called in the opening speech to Parliament, for the adoption, as soon as possible, of a new competitive Investment Charter. An ambitious project, which aims to support the recovery of the various sectors of the Moroccan economy severely impacted by the health crisis, but also to promote job creation and the fight against territorial inequalities.

Special Commission of the New Development Model promised to improve public investments

As a result, in its report, the Special Commission of the NDM promised to improve the rate of return on public investments, to maximize their economic and social impact as well as to increase the share of national and foreign private investment in the total investment at 65%. But this reality highlights the need to increasingly involve the private sector and institutional actors in financing the development of the economy.

According to the NDM, this will involve expanding the space for national and foreign private and institutional investment in the economy and infrastructure, through several stages. It is therefore a question of the increased opening of certain structuring sectors and the strengthening of attractiveness through an improvement in competitiveness and a de-risking approach.

To do this, it will be necessary to call on the participation of the Mohammed VI Fund as a partner for national and foreign private investment while preparing bankable PPP projects (public-private partnership), with an attractive risk profile for investment, calling on financing arrangements innovative projects in the Moroccan market.

Similarly, the NDM expresses the ambition to carry out a global overhaul of administrative procedures with a view to reducing the burdens that weigh on companies and to compensate for the resulting rigidities and distortions. It proposes, in this sense, some recommendations and concrete strategic orientations.

Thus, the report on the NDM stipulates to carry out, in a short time, a large-scale operation for the overhaul of existing administrative procedures while initiating the site of their complete digitalization. This initiative would be part of a territorial logic, but it would also be at the origin of the acceleration of the digitalization project, which is strategic today in the improvement of the national Doing Business.

The CGEM provides measures to implement the Investment Charter

For its part, the General Confederation of Moroccan Enterprises-CGEM published its white paper last October in order to provide the measures that the majority of the members of the Confederation consider essential for the implementation of the NDM and for “competitive, social, inclusive and united Morocco".

Compared to other African countries, Morocco has a high investment rate, in principle sufficient to hope for economic catch-up. “The investment effort in value reached an average of 32.2% of GDP between 2000 and 2019, compared to 25.6% on average worldwide and 29% for lower-middle-income countries”, underlined Abdellatif Jouahri, the Wali of Bank Al-Maghrib (BAM), before the Finance and Economic Development Committee of the House of Representatives. But despite these efforts, Morocco has not yet been able to achieve the much-hoped-for economic catch-up. This observation is mainly due, according to Bank Al-Maghrib, to the low return on investment which results in a low rate of job creation.

Except for the Issuing Institute, the post-Covid context requires Morocco to make a change. According to BAM, the Kingdom must take up the challenge of improving the living conditions of the population by creating a sufficient number of quality jobs. These include digitalization, the imperative of greening the economy, a questioning of multilateralism and a strong rise in sovereignty, noted Abdellatif Jouahri.

In this vein, Mr. Jouahri recommended accelerating the implementation of reforms aimed at improving the business climate such as the Investment Charter, the simplification of administrative procedures, the operationalization of the Mohammed VI Fund for the investment, the fulfillment of Morocco's commitments to the Financial Action Task Force (FATF), etc.

His Majesty the King recalled that the renovation of legal and incentive mechanisms remains dependent on their proper implementation. But not only this, it mainly relies on and depends a lot on the regular monitoring of their execution on the ground. All these ingredients would, according to the Sovereign, make it possible to give a new dynamic to private investment and to establish the Kingdom as a privileged land for investment on a regional and international scale.