Morocco will exceed this year's target for $3 billion in foreign direct investment and aims to secure up to $4 billion in 2008, the head of the North African country's investment agency said on Wednesday.
Hassan Bernoussi, director of the Department of Investments, said the government is embarking on a large-scale push to attract more investment into services and industry to reduce dependence on agriculture which still accounts for over 40 percent of the economy.
"In 2006 we got $3 billion FDI, while 10 years ago we had problems reaching $500 million," Bernoussi told Reuters during a visit to London to meet investors. "In 2007 we are going to exceed $3 billion which was the FDI target.. and we want to get $4 billion in 2008."
"I think this is not too ambitious and quite realistic," he said, adding the target is to reach $5 billion in 2010. This target is likely to be met even if the current turmoil on global markets continues, he said, though he acknowledged that portfolio flows could be hit to some extent.
Bernoussi said an added incentive for foreign investors is a provision in the budget, to be voted on by end-2007, to cut corporate tax to 30 percent from 35 percent. He said Morocco had completed most of its privatisations so the majority of direct investment now is in greenfield projects such as a $1 billion plan by Renault, unveiled in September, to build its biggest African car plant near Tangier.
These investments are seen as key for the country of 30 million where unemployment is estimated as high as 20 percent and where about 40 percent of the population lives in poverty. Agriculture, once the mainstay of the economy, is battling drought and desertification.
Bernoussi said one development is that while France and Spain remain the leading investors, oil-rich Gulf states are increasing their share. Middle Eastern firms have already signed up to projects worth up to $30 billion though they accounted for only 10 percent of the FDI received in 2006.
"We are seeing a new wave of money from the Gulf. Though most of this is in tourism and real estate we are also seeing some investors moving into non-traditional sectors - for instance we recently had a Saudi investor in an olive oil processing plant.