The Moroccan auto industry just got a $1bn upgrade from Renault
It seems diversification of the economy is not only championed in countries like Nigeria (due to the slump in oil prices), but Morocco is looking to extend its economic reliance beyond agriculture.The country’s industry minister, Moulay Hafid Elalamy has said French car maker, Renault (which operates the largest car factory in North Africa), is about to invest 10 billion dirhams ($1.04 billion) in Morocco to build an “industry ecosystem.”
It basically means that Renault will upgrade its production capacity from a 32 percent to a 62 percent in the country. Reuters reports that Morocco expects its auto industry exports to reach 100 billion dirhams a year by 2020, this move will definitely speed up that process. However Renault is not the only automobile company to explore its potential in the production of automobiles in the country.
According to the industry minister, Renault has made it possible for other companies to come and invest in the country by making component parts. “Renault ecosystem means that around Renault plants in Tangier and Casablanca, many other companies are coming to invest and make the parts that will shape a Renault car,” he said.
Aside from raising the country’s economy, the minister is also optimistic that the investment will create about 50,000 job opportunities for the country’s citizens, which answers the question of where the people at the grassroots fall into all these. “This strategic project alone will give Morocco 50,000 new jobs,” Elalamy maintained.
Morocco which prides itself as an export base for Europe, the Middle East and Africa, is currently upping the ante for all other African countries in terms of foreign direct investments (FDIs) as they continue to host various projects regardless of challenges met by a lot of its counterparts over terrorism acts and low or non-existent economic structure. For instance, in February 2016, government head, Abdelilah Benkirane said Morocco’s foreign direct investments (FDIs) recorded a 15 pc increase yearly between 2010 and 2015, moving from 13.3 billion dirhams to 31.1 billion dirhams. That is to say the country attracted 31 pc of FDIs in North Africa in 2014 compared to only 12 pc in 2010.
Although Morocco has a few strong points like a favorable legal framework and assistance measures to foreign investors and a strategic position as Europe is not so distant from it (about 1914.93 miles) taking up to an average of 3 hours to arrive at either destinations. There have been challenges bordered on the fact that Morocco is still quite dependent on agriculture and is particularly vulnerable to the prices of hydrocarbons.
Regardless of these challenges, it is clear that Morocco has no intention of slowing down its economic growth through foreign direct investments. According to Financial Times, the country recorded a high percentage of FDIs in 2014, including $2bn investment in its renewable energy sector by Shanghai Electric, which planned to establish five photovoltaic power generation facilities in the country.
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