LMajor economies are seeking to increase their attractiveness to attract more foreign direct investment, an important component of economic and social development.
While we are interested in national priorities on the economic front, it is easy to see that increasing the attractiveness of the Kingdom to national and international investors has been a priority of successive governments in recent years. This is confirmed by the improvement of Morocco’s rating in the Doing Business rating, which was temporarily suspended by the World Bank.
State authorities and interested entities (CGEM, GPBM, etc.) for almost 6 years (2016) considered the investment charter reform, the draft framework law on which was finally adopted by the Council of Ministers on July 13, 2022. The emergence of a new investment charter that takes into account new economic, social and spatial challenges, economic entities have been waiting for a long time. In May 2022, during his speech in parliament, Aziz Ahannukh unveiled some of the key ambitions of the new investment charter. It can be called an increase in the share of private investment in the country’s total investment to 2/3 by 2035 (against barely a third today), reaching 350 billion dirhams.
Another important detail made public by the head of government is that the draft framework law also provides for measures to support projects of a strategic nature, such as the defense or pharmaceutical industries. And this is within the framework of the National Investment Commission. A special support mechanism is also planned for very small, small and medium-sized enterprises, as well as a mechanism dedicated to the development of Moroccan investments abroad. In addition, the executive authority should issue a decree to halve the cost of investment programs requiring state support from 100 million dirhams to 50 million dirhams. Such a measure is likely to promote SME investment.
Focus on production sectors with high added value
The draft framework law aims to improve the impact of investment, particularly the creation of permanent jobs and the reduction of disparities between provinces and prefectures in terms of attractiveness. The new system also aims to direct investment into high-value-added manufacturing sectors. Sustainable development, strengthening the Kingdom’s attractiveness to make it a continental and international center for foreign direct investment (FDI), improving the business climate, facilitating the investment process, as well as significantly increasing the share of domestic and foreign private investment are among the priorities of the draft framework law.
LThe government also adopted a number of parallel measures to accelerate projects related to the simplification and digitization of procedures, ease of access to land and improved governance. This initiative should also strengthen the involvement of the banking sector in the field of investment. In the same vein, the new draft charter is based on an important support mechanism that, among other things, promotes the creation of wealth and its equitable distribution. It also has an arsenal of incentives, offering general compensation to support investment, additional territorial compensation and additional sectoral subsidies.
A new era after a decade of quarantine
Mohsin Jazuli, Minister Delegate in charge of Investment, Convergence and Public Policy Evaluation, recently introduced the Draft Framework Law No. 03.22 establishing the Investment Charter at a meeting of the Committee on Finance and Economic Development in the House of Representatives. The minister noted that the new text made it possible to get out of the impasse in which the draft of the new Investment Charter was stuck for more than ten years, during which more than 65 versions were prepared.