UPPL at the IMF x World Bank Annual Meetings 2023

tamy@unpeuplusloin.com

The global energy transition is propelling Morocco on the world stage; investors look to Morocco as the gateway to Africa; and the IMF touts the country as a blueprint development model for emerging markets. Here’s what we learned from the IMF and World Bank Annual Meetings held from October 9th-16th 2023 in Marrakech.

Morocco has had to chart a challenging course over the past few decades. The implementation of a long-term vision and gradual strategic reforms has led to the reinforcement of democratic institutions, increased competitiveness, a boost in exports, and a more resilient economy.

With a strong focus on inclusive growth, social reform, infrastructure development, ecological practices and diversification of industries, the country is attracting both domestic and foreign investments, while preserving its diverse cultural identity, affirming its sovereignty and building partnerships with strong human ties.

With a 2023 projected growth rate of 2.4%, Morocco has witnessed significant improvements in sectors such as agriculture, tourism, renewable energy, and manufacturing. Education and social protection services are also on the rise according to talks held at the Annual Meetings.

Yet the past few years have brought their share of upsets. The pandemic severely impacted the tourism industry between 2020 and 2022. Water scarcity is a critical issue in many of the country’s regions. Most recently, Morocco’s resilience was tested in the wake of the 6.8-magnitude earthquake that struck the Al-Haouz province and regions around Marrakech. Remarkably, in the face of a changing world landscape, climate change and human loss, the Kingdom has shown remarkable strength and resilience.

In October 2023, the country hosted 12,000 finance professionals during the IMF and World Bank Annual Meetings in Marrakech, demonstrating its ability to host major international events and showcasing its growing influence in the global economy. In 2030, Morocco will welcome the World Cup alongside Portugal and Spain, to the great joy and anticipation of the country’s population.

With favorable wind in its sails, a strategic geographic location, political stability, investment-friendly policies, and a skilled workforce, it appears that Morocco is well-positioned to continue its journey as a thriving and attractive investment destination.

We’re looking at hydrogen, we’re looking at logistic future zone, which is really one of our specialties in emerging markets. We’re looking at tourism. I was just with the CEO of Royal Air Maroc, I think it’s interesting to see the ambition of the country and there is good momentum so we are pretty bullish”, says Sandro Salsano, a private investor and the CEO of the Salsano Group, in an interview with UPPL. With a growing energy portfolio, the group has some renewables and has been investing in battery companies in Africa as well as South America.

And perhaps the global energy transition was the biggest focus of the IMF and World Bank Annual Meetings – with Morocco’s ambition to play a major role taking central stage.

A frontrunner in hydrogen production on the African continent, Morocco has deployed significant resources and efforts to become a hydrogen leader in the global landscape alongside countries like Japan, Germany, South Korea, Australia and China.

One of the significant steps taken by the country is the establishment of its Green Hydrogen Roadmap. Building on the long-term vision of the Kingdom’s National Energy Strategy, the roadmap outlines the country’s plan to produce sufficient quantities of low-cost clean hydrogen through renewable energy sources (primarily wind and solar) to meet demand both domestically and internationally, thus reducing dependence on fossil fuels. The belief is that the renewables harnessed from Morocco’s generous natural assets will provide the necessary electricity to power electrolyzers, which split water into hydrogen and oxygen molecules.

Morocco’s proximity to Europe also gives its hydrogen sector a strong competitive advantage, due to lower transportation costs. The country is in partnership with Germany. Their alliance will support the construction of Morocco’s first green hydrogen plan and generalize social coverage, while reducing the countries dependence on fossil fuels.

Gateway to Africa

Efforts to improve the ease of doing business in Morocco have also contributed to the country’s success.

With 50 Free Trade Agreements in place, and the only country on the African continent with a FTA with the United States, Morocco used the IMF stage to solidify its position as the gateway to Africa. Speaking to its ambition to increase private investment volumes by 33%, the Kingdom overviewed the scope of a set of 100 key public-private partnerships (PPPs) representing 50-billion-dollar investments across industries. For example, the implementation of the Nigeria-Morocco gas pipeline, the expansion of the high-speed train network between Marrakech and Agadir, and desalination plants.

“Morocco the way we look at it is really a hub for the region, it is strategically located. We were actually recently in Tangier, so I was really impressed with Tangier-Med, the way they with their port and zone, access to a big market to Europe. The gateway for us is really obviously the stability of the country, the free access to the whole region, the continent. Today, this would be for us the first choice to entry the market,” says Sandro Salsano.

Africa receives 60 percent of the world’s solar energy. Its population is projected to nearly double to 2.5 billion over the next 25 years, making the opportunities for new solutions and new structures feel ripe.

However, financing the green energy transition asks of the global financial industry that it reinvents itself.

At the Meetings, speakers mentioned the mindset shift that is required to push through with better frameworks, harmonize tools, instruments and standards, and include design ideas from the Global South, including to accelerate response time when climate disasters strike. Others talked about mechanisms like carbon markets, and financing the transition with money coming from mature countries and going to the underdeveloped countries.

Part of what the World Bank is addressing as a priority is the expansion of its mandate to access climate capital. Meanwhile, the IMF is rolling out resilience programs. In September 2023, its Executive Board approved an 18-months US$ 1.32 billion Resilience and Sustainability facility for Morocco to address climate vulnerabilities, bolster its resilience against climate change, and seize the opportunities from decarbonization.

The road ahead is challenging. Not to mention geopolitical tensions which we’ve been told are the new normal for the next 10 years. If it succeeds on its quest, Morocco will not only offer its people a harmonious environment to live in, learn and grow; it has the potential to unlock a new multidimensional development model that might just align and inspire a new future for African youth, and with it, the world. 

Tamy Emma Pepin is the founder and managing director of UPPL. She brings together creative and strategic thinking with 15 years+ in brand and business communication.