Moroccan Financial Board (MFB) is following the lead of Dubai, Qatar and Singapore in trying to create a regional financial services hub. Morocco is one of the most advanced economies in the region, has great infrastructure and good links across Africa.
The African continent, in turn, is an increasingly exciting investment destination, with growth second only to East Asia over the past decade. But it remains risky. It makes sense for financial services firms to base themselves in lower-risk countries with established regulatory frameworks, such as Morocco.
Some challenges remain, however, such as the eurozone crisis and the economic slowdown in Asia. With demand for goods and services down across the globe, growth in Africa is also slowing. Morocco’s GDP will fall to 3.2 per cent in 2012 from 4.5 per cent in 2011. Traditionally, key investors in Morocco have been European institutions, particularly from France and Spain, both of which were hard-hit by the economic crisis.
In order to make Casablanca Finance City a success, it will have to attract investment from further afield: the Gulf, Asia, and even the rest of Africa. In doing so it will have to compete with Dubai and Qatar, which both have designs on Africa.
Getting investment for the city will be tough, given the difficulties in global credit markets. Morocco’s state finances and the country’s diminishing foreign currency reserves are also of concern to international investors. Recent political unrest, although quickly quelled, will also remain a worry. The lack of regulatory oversight from the MFB is also a concern for firms considering investing in the city. But Africa’s growth potential is unquestionable and Morocco is best positioned to provide the kind of financial services the region will need.