During the last year IFC has been ramping up its work encouraging so-called South-South investments between the Middle East and North Africa and Sub-Saharan Africa, in an effort to promote economic development and integration. Morocco especially is p
April 16, 2012—It has been a difficult year for businesses in the Maghreb countries of North Africa, including Tunisia and Morocco. Unrest and fallout from the European debt crisis have put a damper on growth
The Kingdom of Morocco was by no means immune to the popular displays of disaffection that swept the Middle East and North Africa in recent years.
But amid the regional turmoil, Morocco has embarked on a path to economic sustainability that can serve as an example to its neighbors.
In the rapidly expanding tourism sector many job opportunities are being created. And micro, small and medium enterprises (MSMEs) are encouraging growth.
Despite this, youth unemployment, a contributing factor to the unrest, remains high. An abundance of university graduates do not meet the needs of employers, so IFC is helping implement initiatives that furnish young people with relevant skills.
What's more, the corporation works across the country to provide investment and advisory services that expand access to finance for MSMEs and entrepreneurs, improve infrastructure, and enable the private sector to take a lead in the economy.
IFC’s strategy in Morocco focuses on increasing private sector led economic growth, creating jobs, expanding access to finance for small businesses, supporting renewable energy, and improving physical and social infrastructure--especially the economic inclusion of young people and women.
In terms of investments, in FY13 alone, IFC’s total commitments reached $272 million, a 75 percent increase on the previous year. This was driven by a large equity investment of $204 million in Banque Centrale Populaire (BCP) to support the bank’s lending to small businesses and allow it to expand into Sub-Saharan Africa. IFC also made an equity investment of $7 million in the education sector in connection with the Education for Employment Initiative for Arab Youth (E4E).
In FY14 to date, IFC has already committed close to $115 million, including; a $50 million equity investment in Alliances, to support social housing; a $24 million equity investment with Zalagh, the largest integrated poultry company in Morocco; a $20 million equity investment in Mediterrania II, a private equity fund targeting SMEs in the Maghreb, and; a $20 million loan to Attawfiq Microfinance.
Creating jobs for young people remains the central challenge. The Arab Spring brought renewed attention to the economic and political consequences of unemployment and IFC is leading the regional E4E initiative with the support of the Islamic Development Bank, the Netherlands, SECO, and UKaid.
E4E aims to engage the private and public sector to create new opportunities for employment based education, and enhance labor market skills for youth and women seeking productive employment. Through E4E, IFC will tackle the issue of skill gaps from different angles, including through both investment and advisory services. Furthermore, IFC will also look into ways to continue to support the microfinance sector, with a specific focus on women and youth.
IFC is working closely with the World Bank to prepare the strategy for the next four years, building on current initiatives and capitalizing on the positive momentum of Morocco. The new strategy will pursue inclusive and competitive growth, build a green and resilient future, and support good corporate governance.
In the infrastructure sector IFC will focus on public-private partnerships and renewable energy.
The corporation will continue to help restore investor confidence by increasing both its investment and advisory engagements and provide support to existing clients and new firms. We will strengthen support to important Moroccan regional players and further mobilize resources to increase large investments, including south-to-south opportunities.