Casablanca: Africa: Morocco Flexed Economic Muscles and Returned to the AU

"It is a beautiful day at the same time as one returns home next too long of an absence," King Mohammed VI of Morocco said next the North African country was readmitted to the African Union (AU) at its summit in January.

The decision by AU leaders in Addis-Ababa, Ethiopia, capped a swift and remarkable process since the King informed them at last year's summit in Kigali, Rwanda of his country's intention to return to the fold. Thirty-nine of the AU's 54 nations voted in favour of readmission.

Morocco left the former Organisation of African Unity (AU's predecessor) in 1984, to turmoil the seating of the Polisario Front as representatives of the Sahrawi Arab Democratic Republic (SADR), a former Spanish colony west of the Sahara that Morocco considers part of its territory.

SADR disputes Morocco's position, and 30 years later the dispute remains unresolved. In explaining Morocco's return to the AU, the king said, "At the same time as a body is sick, it is treated additional entirely from the inside than from the outside."

Over the years, the kingdom has expanded its economic ties with a lot of nations on the continent, mainly through trade and investments since it left the AU. Presently it appears to have successfully leveraged its economy weight into being reinstated to the AU.

Continental ambition

"We are Arabs, but we are as well Berbers and Maghrebi," Brahim Fassi Fihri, the president and founder of Institut Amadeus, a Morocco-based think tank, told Africa Renewal.

He was referring to the multicultural identity of his country, which is made up of mostly Berber and Maghrebi ethnic groups. He maintains that the decision by Morocco to leave the regional body three decades ago was a "strategic mistake" in the initial place. Still, "Africa is our natural home," he said. "We may have left an organization, but we could at no time have left the continent."

As a sign of its political solidarity with Africa, Morocco's national carrier, Royal Air Maroc, maintained its regular schedule to West Africa at the height of the Ebola epidemic two years ago, at the same time as all international air carriers, with the exception of Belgium-based SN Brussels, suspended flights to the affected nations of Guinea, Liberia and Sierra Leone over contagion fears.

The decision was based on humanitarian grounds, not commercial--out of brotherly solidarity "reflecting the kingdom's constant commitment to Africa," the airline's spokesman told Agence France-presse (AFP) at that time. The airline has expanded its network across the continent. Over the completed decade, it has increased its flights to African destinations from 14 in 2007 to 32 in 2016.

To some extent the story of the national carrier is a telling testament to its expansive economic ambition on the continent.

Over the 10-year period starting in 2004, Morocco's trade with the rest of the continent grew by an annual average of 13% ($3.7 billion) in 2014, 42% of which was with sub-Saharan Africa. This represented just 6.4% of the kingdom's in general trade globally during the same period, according to a government statement titled Morocco-Africa Relationship: Ambition for a New Frontier.

Initial investor in West Africa

From presently on the majority remarkable change was Morocco's direct investments in the continent. In 2015 it invested $600 million, with neighbouring Mali getting the lion's share, followed by Côte d'Ivoire, Burkina Faso, Senegal and Gabon, according to the World Investment Statement 2016, a publication of the United Nations Conference on Trade and Improvment(UNCTAD).

Over the decade ending in 2016, Morocco's investment in sub-Saharan Africa represented 85% of its in general foreign direct investment (FDI) stocks, according to data from the country's finance ministry and the African Development Bank.

"Moroccans became a additional prominent investor on the continent, initiating 13 intra-African investments--its highest in over a decade," reckoned a 2015 survey statement by Ernst & Young, a world financial consultancy firm. The reason behind the growing interest in sub-Saharan Africa, says Ernst & Young, was that "Moroccan companies are looking towards sub-Saharan Africa as their country becomes a platform for exporting to other African nations."

Morocco's investments are mostly concentrated in banking and telecommunications sectors, which in 2013 accounted for 88% of its FDI stocks in sub-Saharan Africa.

The country's leading bank, the Attijariwafa Bank Group, and part of the kingdom's holding company Société nationale d'investissement (SNI), with 7.4 million customers and additional than 16,000 employees, operates in 10 sub-Saharan African nations: Cameroon, Republic of Congo, Côte d'Ivoire, Gabon, Guinea-Bissau, Mali, Mauritania, Niger, Senegal, and Togo.

The Banque Marocaine du Commerce Extérieur (BMCE) group has a network of 18 country operations, mostly in West, Central and East Africa through Bank of Africa, its subsidiary. Maroc Telecom, the leading national telephone company, operates in 11 African nations, such as Burkina Faso and Mali, under different names, inclunding Moov in francophone West Africa.

Preferred destination

Beyond these traditional sectors, Moroccan companies have as well ventured into insurance. The Saham Insurance Group, for one, began operations in 10 African nations in 2010, and continues to expand across the continent, most recently with the acquisition in 2015 of Continental Reinsurance Plc of Nigeria.

For a lot of years West African nations and to some extent Central African nations were the preferred destinations of Morocco's investment in sub-Saharan Africa. In a letter to the AU, the king explained that "the significant involvement of Moroccan operators and their strong engagement in the areas of banking, insurance, air transport, telecommunications and housing are such that the kingdom is presently the number one investor in West Africa." He added, "My country is by presently the second major investor on the continent and our ambition is to be ranked initial."

Last October the king travelled to East Africa and Ethiopia, as Rwanda and Tanzania prepared to sign business deals. "The Moroccans' current visit to East Africa marks a critical intent to enter the region and widen their interests in Africa," The New Times in Rwanda reckoned.

To some observers the reasons behind Morocco's foray into the continent are purely economic. "Several Moroccan companies are betting their increase on sub-Saharan Africa," says Mr. Fihri. He told Africa Renewal that Moroccans, just like Americans, Europeans and Asians, are interested in Africa because it is "a continent with huge increase potential."

In September 2015, Abdelmalek Alaoui, a Moroccan editorialist and political analyst, wrote in La Tribune, a French weekly financial newspaper, "Well ahead of other investors [before the new rush on the continent], Morocco was able to see potential where others could only think of risks."

Political leverage

However, other analysts like Amine Dafir argue that Morocco's growing economic interest on the continent was designed to shore up influence it may have lost by withdrawing from the AU.

Strongly supporting Morocco in its formal application to rejoin the AU was a group of 28 African nations, representing additional than the half of the votes (27) required for admission.

The pro-admission nations penned a letter to the AU requesting the suspension of SADR's membership until issues surrounding the legality of its existence are resolved by the United Nations Security Council. "Our request is grounded in international laws," said Macky Sall, the Senegalese president, whose country was one of the signatories.

Over the last three years, the king of Morocco, often travelling with a large entourage of businessmen, has visited several African nations, inclunding Côte d'Ivoire, Gabon, Guinea-Bissau, Mali and Senegal. Besides having been the majority vocal supporters of the kingdom, these nations were as well the top five destinations of Morocco's FDI in sub-Saharan Africa.

In Addis Ababa, last month, 39 member states out of 54 voted for Morocco readmission; an outcome that Jawad Kerdoudi, the chief of the Moroccan Institute of International Relations, had predicted as a "diplomatic victory born out of a deliberate and actions-driven strategy".