Morocco Oriental Region

Morocco 2013
Oriental Region
ECONOMY
INDUSTRY
TRANSPORT
TOURISM
CONSTRUCTION
REAL ESTATE
TELECOMS & IT
EDUCATION
AGRICULTURE
ORIENTAL CONTENTS
ISBN 978-1-907065-77-4
Editor-in-Chief: Andrew Jeffreys
Editorial Director: Peter Grimsditch
Chairman: Michael Benson-Colpi
Director of Field Operations: Elizabeth
Boissevain
Regional Editor: Robert Tashima
Editorial Manager: Willem Oosterveld
Regional Director: Karine Loehman
Country Director: Miranda Stobbs
Project Coordinator: Mahmoud El
Hafoudi
Nothings quiet on
the eastern front
Page 5
The Oriental regions economy has traditionally relied on agriculture, industry and mining.
Infrastructure upgrades, including a highway
running from Oujda to Fez, implemented over
the last 10 years are expected to boost the
tourism sectors contribution to the mix.
23 Living off the land: The region aims to increase
agricultural yields and expand agro-industry for

export markets
25 Pushing for industry: Better connected
transport infrastructure eases exporting

27 Digging it up: Legal reforms and added
incentives should boost mining investment

5
Nothings quiet on the eastern front: Growing

investment and national integration boost the
region
29 Funding growth: A new development fund is
putting small businesses on the map through

equity investment
Chief Sub-editor: Alistair Taylor

Deputy Chief Sub-editor: Jennie
Patterson
Web Editor: Barbara Isenberg
Sub-editors: Sam Inglis, Sean Cox,
William Zeman, Danya Chudacoff,
Mariah Pittman, Krystell Jimenez,
Oliver Ayyildiz, Martin Stegman, Esther
Parker
Contributing Sub-editor: Miia
Bogdanoff
Analysts: Cailin Birch, Yinka Ibukun,
Francisco Serrano, Genevieve
Theodorakis, Ruairi Patterson
Senior Editorial Researcher: Susan
Manolu
Editorial Researchers: Souhir Mzali,
Thomas Bacon, Adeline Oka, Jenna
Oelschlegel
Art Director: Yonca Ergin
Deputy Art Director: Cemre Strugo
Art Editor: Meltem Muzmuz
Graphic Assistant: layda Gedik
Illustrations: Shi-Ji Liang
Photography Editor: Mark Hammami
Photographer: Gregory Dziedzic
Production Manager: Selin Bolu
15 Interview: Mohamed Mbarki, Director, Agence

Operations Manager: Yasemin Dirice
Logistics & Distribution Coordinator:
Esen Barn
Operations Assistant: znur Usta
de lOriental
17 Rural potential: Niche tourism is offering
investment opportunities away from beach

resorts
Field Operations Executive: Meltem

Okur
Field Operations Coordinator: Zeynep
Akdamar
19 Next door neighbour: An open border could
further boost economic cooperation

21 A welcome facelift: Revamped centres and
development of cultural spaces in the capital
A welcome facelift
Page 21
With the Oujda Urban Development Plan 201016, the region's capital city is undergoing a
transformation, which will include 56 projects
aimed at improving the city at a total cost of
Dh2.1bn (186.7m). Residential and commercial spaces will be built to meet demand. The
iconic train station is also being restored in the
hopes of adding to the citys historic appeal.
THE REPORT Morocco 2013
ORIENTAL OVERVIEW
Some 4% of new projects fall under the category of tourism
Nothings quiet on the eastern front

Growing investment and national integration boost the region
After a decade of investment, Moroccos Oriental region
is ready to build a strong reputation in the Mediterranean. Nestled between the Algerian border and the
Mediterranean Sea, Moroccos Eastern Region is strategically located along the southern European basin.
After decades of underdevelopment, it has become
the recipient of extensive governmental investment.
Moroccos government has often channelled funds
into the central areas of the country, with urban,
industrial areas in cities like Tangier in the north and
Oujda in the east suffering as a result. For years, the
Oriental, as the Eastern Region is known, suffered
from insufficient transport connections to the rest of
the country and a lack of the infrastructure necessary for supporting the development of family-owned
businesses and strategic industries. Adding to this, the
closure of the Algerian border almost 20 years ago
dealt a serious blow to an area of the country with
strong cultural and family links with its neighbour.
However, an increased focus by the government on
devolving some decision-making powers as well as
improving both growth and social development indicators in areas outside of Casablanca and Rabat has
led to a shift in policy and the influx of government
support of the kingdoms regional governments.
ADDING INTEREST: As a result, over the past 10 years,
infrastructural upgrades of road, air and sea transport
links have greatly improved the business environment
in the Eastern Region. And with the establishment of
a comprehensive regional development strategy focusing on industrial expansion, tourism promotion and
agricultural output, the Oriental is hoping to see a significant expansion in both trade and capital flows over
the medium term. Attracting private investment has
been a main priority. According to figures by the Regional Investment Centre in Oujda, the Oriental attracted
Dh7.9bn (703.2m) of private investment in 256 different projects in 2012. About 83% of new projects were
in the building and construction sector, along with 6%
in secondary industries and 4% in the tourism sector.
A ROYAL INITIATIVE: Much of the drive to equip the

Oriental with the necessary means for development
started in March 2003, with a visit by King Mohammed
VI. The push by the monarchy, which also sought to
improve development in other previously ignored
regions, such as the North, represents a new economic positioning of the region, with an emphasis on generating domestic consumption and output rather than
relying on neighbouring Algeria to galvanise trade-driven economic expansion. Historically, the Orientals economy has been based on agriculture, animal rearing,
industry and mining. It has also benefitted from fishing along its Mediterranean coastline and had relied
significantly on cross-border trade with Algeria.
In the 1960s, however, in what would prove to be
the first blow to the region, a large portion of mining
activity stopped, prompting heavy unemployment (a
trend that has continued, standing at 17.7% in 2011).
And after a political spat between Morocco and Algeria following a terrorist attack in a hotel in Marrakech,
which was stoked by ongoing tension over the Moroccan/Western Sahara, the border between the two
countries was closed in 1994, during Algerias civil war.
These factors, in addition to low agricultural yields,
encouraged a migration wave to both other parts of
the country and to Europe. One-third of Moroccans living abroad today come from the region.
COMPOSITION OF THE REGION: The Royal Initiative
for Development of the Eastern Region launched
Agence de lOriental in 2006, with the goal of helping
the regions local authorities to establish development
strategies and stimulate economic activity. Additionally derived from the royal initiative was the creation of
the Regional Investment Fund, put in place to support
local business growth through equity investment in the
regions companies (see analysis).
The Eastern Region is located in the north-eastern
corner of the kingdom, with a 200-km Mediterranean
coastline to the north. To the east lies Algeria, where
the border is closed only a few kilometres away from
In 2012 the Oriental

attracted Dh7.9bn
(703.2m) of private
investment in 256 projects;
the overwhelming majority
of these are in the building
and construction sector.
The Royal Initiative for

Development of the
Eastern Region created
Agence de lOriental and
the Regional Investment
Fund to help stimulate
activity and develop local
businesses.
The largest city is the

regional capital, Oujda,
which is home to the Oujda
Angads Airport and the Al
Farabi Hospital, along with
other key infrastructure.
ORIENTAL OVERVIEW
the regions capital and largest city, Oujda. Oujda is the

regions main urban centre with a population of 500,000
and Moroccos easternmost city. It houses the regional council and it is the Orientals centre for business
and government administration. It hosts the Oujda
Angads Airport, the Universit Mohamed Premier and
the Al Farabi Hospital. The city is also undergoing major
urban renewal (see analysis). A brand new Dh525m
(46.7m) University Hospital Centre is under construction and will improve health service provision in the
region and training capabilities for regional health staff.
To the west, the Oriental is linked to the adjourning
regions of Taza-Al Hoceima-Taounate and Fez-Boulmane. To the south-west, is the region of Mekns-Tafilalet. On a peninsula on the regions Mediterranean
coast is the Spanish enclave of Melilla.
With a population of 2m people and an area of 82.8 sq
km, the Eastern Region is the second biggest of the kingdoms 16 regions in terms of area, occupying 11.6% of
national land. The region is divided into the prefecture
of Oujda-Angad and six provinces: Nador, Driouch,
Berkane, Taourirt, Jerada and Figuig. These include 27
urban communes and 87 rural ones.
CHALLENGES: The closed border has had a significant
impact on the regional economy, particularly in terms
of contraband and informal activity. The Regional Strategic Plan for the Eastern Region, which was published
in 2011 by the regional council, estimated that some
46% of commerce activity in the region was informal,
based on 2009 figures. This is a challenge that authorities face when trying to improve the governance of
local businesses and structures, especially in their
efforts to spur greater investment and activity. Banking credit and capital investment in equity, which can
be harnessed to help grow local businesses, require strict
transparency rules. Many companies in the region are
family-owned and have part of their business in the
informal sector, and it can take a long time to integrate
them into the formal sector and encourage them to
become more transparent, said Ali Belhaj, the president of the regional council.
TACKLING ISSUES: Such a high figure for informal
activity is not surprising nor particularly unique to the
region estimates of the informal economy in Morocco can range well above one-third of total activity. In a
lot of ways, the challenges of the Eastern Region remain
the same as other regions in Morocco, bar for the fact
that, for several years, these have been compounded
by its isolation and insufficient economic integration
with other more developed parts of the kingdom.
Unemployment is also an issue in a region that has
for years contributed heavily to the Moroccan diaspora, especially in Europe, where about 1m emigrating
Moroccans are from the Eastern Region. As a result, a
number of broader national strategies should also help
unshackle growth drivers in the Oriental to varying
degrees. The Green Morocco Plan launched to develop the agricultural sector is being translated into a
ORIENTAL OVERVIEW
Efforts are being made to improve rail and road networks
connected the Orientals largest city to the countrys

motorway network. The coastal highway, known as La
Rocade Mediteranenn, runs from Sadia to Tangier,
reducing travel time from the resort at Sadia to the
countrys largest deepwater port at Tangier from some
11 hours to seven. It was built at a cost of Dh7.2bn
(640m). The 120-km dual carriageway from Oujda to
Nador, currently under construction, should also ease
transport of goods into the future Nador West Med port.
Improvement of rural roads in the Berkane
province, the regions largest agricultural exporting
area by volume of produce, will also improve internal congestion and distribution. Investment is due
to reach Dh700m (62.3m) over the next seven
years, according to the governor of the Berkane
province, Abdelhak Haoudi. Should the Algerian border open, the region would also be connected to the
Algerian highway network, facilitating easy access
to the nations two largest cities, Oran and Algiers.
LIFT OFF: The region now has two airports. The larger of these, Oujda Angads, is located approximately 10
km from the capital city. Equipped with two runways,
Despite recent turmoil in

other nearby North African
nations, the kingdom has
set ambitious growth
targets, one of which is to
create a total of 137,500
new jobs by 2020.
New investment projects by sector, 2012
Construction
83%
Energy & mining
2%
Tourism
4%
Commerce
3%
Services
2%
Industry
6%
SOURCE: Centre Rgional d'Investissement
total of 77 agricultural development programmes across

the region. Plan Azur, which oversaw the creation of
six beach tourism areas, had an impact on the regions
north coast with the building of the Sadia Resort.
Moroccos industry development strategy, the National Pact for Industrial Emergence (Pacte National pour
lEmergence Industrielle, PNEI), was put in place in 2005
to focus on the expansion of industrial capabilities up
to 2015, and will manifest itself in the region through
the establishment of industrial areas to attract new companies and increase production capabilities.
HIGH AIMS: The regional government has also been
aggressive about setting its own targets for growth. Local
authorities want to create 137,500 new jobs and
increase the number of people working from 538,700
in 2009 to 676,200 by 2020. To sustain this, the region
is aiming to maintain an annual growth rate of 7.3% to
raise regional GDP from Dh35bn (3.1bn) in 2009 to
Dh77bn (6.85bn) in 2020. This goal might be difficult
to achieve, considering the economic downturn in
Europe and regional instability in neighbouring North
African countries, as well as the kingdoms overall
growth rate, which is half that. Significant work will
need to be done to make that target feasible which
explains in part the extensive work going into the
upgrading of both hard and soft infrastructure.
We need to think beyond the current international context of financial crisis and make sure that we
establish the infrastructure necessary for receiving
national and international investment, said Belhaj.
Agence de lOriental, which promotes international
cooperation for regional development, has concluded
agreements in various areas, both at the bilateral and
multilateral levels. "These include a project with UNCTAD on attracting foreign investment; with UNDP to combat unemployment; an agreement with the Andalusian
authorities to promote the EUs neighbourhood policy; and a partnership with the French city of Lille to develop rural tourism, Taoufiq Boudchiche, director of international cooperation at the agency, told OBG.
CONNECTING THE DOTS: Some of the largest strides,
are being made in the area of infrastructural improvement, particularly to road and rail networks. Highway
links are definitely helping to bring logistics costs down.
Transport spending has traditionally been slightly higher for companies based in the Oriental. In our case, some
imported products might end up costing us an extra
8% because we have to bring them all the way here,
Ahmed Nasri, the regional director for hypermarket
chain Marjane in the Eastern Region, told OBG.
Transport has been one of the governments top priorities in the Eastern Region. Over the past few years,
increased connectivity has alleviated the regions isolation and eased access for local industries that need
to send goods to other areas of the kingdom or reach
Moroccos main export points into European markets.
Much has been accomplished in terms of road transport and the regional road network now measures
6000 km. Three projects have specifically affected the
flow of goods and movement of people to the region.
A new 320-km highway running from Oujda to Fez has
ORIENTAL OVERVIEW
The Oujda Angads Airport is the larger of the regions two airports
The Nador West Med Port is

under development with
the overall aim of replacing
the underused Nador Port
and allowing improved
access to Europe and the
Mediterranean Basin.
the longer running some 3000 metres, it has the capacity to receive commercial aircraft. Work was recently
completed on a new 30,000-sq-metre terminal that
has increased the airports capacity to 3m passengers
a year, but airport authorities expect capacity to be
raised to 3m passengers in the coming years. We currently operate at one-fifth of potential capacity, receiving some 600,000-700,000 passengers per year. The
airport can thus be a great generator for economic
development, said Mohcine Benhadouche, manager
of Oujda Angads Airport.
The smaller Nador Aroui International Airport, 24
km south of Nador, can receive up to 750,000 passengers a year and has several daily flights to European
capitals. Also close by is the EU-regulated Melilla airport which has daily connections to several cities in
Spain. In the south, the small Bouarfa aerodrome has
the potential to serve tourism expansion by cutting the
four-hour drive from Oujda to a short flight. This would
give foreign visitors easier access to the Figuig Oasis.
UNDER STUDY: Only one small port serves the region:
the Nador Port at Beni Ansar, which can receive ships
of up to 200 metres and is equipped with five quays.
Breakdown of investment projects by sector, 2012

Total
Activities
No. of projets
Investment (Dh m)
Textiles & leather
0.91
Expected job creation

21
Agro industry
22
419.45
1081
Wood, paper & cardboard
6.81
22
Ironworks & electric enginering
18
57.3
310
Chemicals
30.5
303
Construction & public works
58
5067.91
1635
Energy & mining
84
157.72
761
Tourism
298.66
225
Commerce
27
240.7
653
Services
19
195.29
256
Total
243
6475.24
5267
SOURCE: Centre Rgional d'Investissement
www.oxfordbusinessgroup.com/country/Morocco
The port is nonetheless underused. Its proximity to the

Spanish port at Melilla as well the lack of sufficient commercial cargo and container lines serving it has changed
its focus to passenger traffic; 598,710 passengers and
2.5m tonnes of trade passed through it in 2011. Hoping to modify this, a feasibility study is under way by
the regional office of the General Confederation of
Moroccan Businesses (Confdration General des Entreprises Marrocaines, CGEM) to assess the tonnage in the
region that could be shipped through the Nador Port.
If we do not have enough tonnage, we might be able
to work in conjunction with the neighbouring regions
of Fez and Mekns, said the Oriental regional president of CGEM, Abdelkrim Mehdi. A key component of
the regions attempt to boost maritime trade and also
increase access for both exporters and imports is the
Nador West Med Port, a Dh6bn (533.4m) project currently in progress that will not only try to replace the
existing Nador Port, but also serve as the key maritime
conduit for the Oriental to Europe and the Mediterranean Basin. The project is slated for completion in
five years (see analysis).
LAYING TRACKS: Railway links are fairly limited, and
the countrys planned high-speed rail will at least in
its first phase bypass the region. Currently, a 650-km
railroad links Oujda to Casablanca, and a new terminal
station is in the works. An old one-way line established
between Oujda and the remote town of Buarfa is still
in operation today, mostly for tourism purposes through
the Oriental Desert Express to the south. The city of
Nador is connected to Oujda by a 117-km line. There
are plans for Nador West Med Port to be connected to
the national railway grid through the Nador line.
PLUGGED IN: Over the years, the Oriental region has
received most of its energy from the Jerada coal-fuelled
electricity plant, with a production capacity of 165 MW,
as well as two hydroelectric stations in Mohamed Khamis
El and Bou Ateg. It is also connected to the Algerian
grid, enabling it to receive an additional 950 MW from
its energy-rich neighbour.
However, solar energy is proving to be an attractive resource for both domestic production as well as
for export to Europe. Capacity was extended with the
building of the An Beni Mathar thermo-solar station,
in the province of Jerada. The 472-MW plant was built
at a total cost of around Dh4.6bn (408.9m) and
started production in 2010, using a combination of
solar and gas energy production. The plant was primarily financed by the African Development Bank in
partnership with the Global Environment Facility and
the National Electric Authority.
Solar capacity will also be increased through the
construction of a 2000-ha solar park due to be established close to the An Beni Mather plant. The new
park, which is scheduled to start operations by 2020,
will have a 400-MW production capacity and will be one
of the five solar parks to be built under the Moroccan
Solar Plan across the country. Indeed, the Oriental has
become one of the leading areas in terms of solar energy production in the country under the kingdoms
objective to increase its usage of renewable energies.
10
Private and public real

estate operators are
forming partnerships to
build more than 33,000
affordable homes between
2010 and 2020 at a total
investment cost of Dh8.2bn
(729m).
ORIENTAL OVERVIEW
Authorities also hope that the added focus on

renewable energy will spill over into local industrial
capabilities. National renewable energy development
plans include the goal of procuring 30% of the necessary clean energy technology from Moroccan companies. The Oujda Technopole, which is set to include
500 ha for industrial development, has already started commercialisation of a 107-ha section, of which
40 ha will be devoted to clean energy technologies
and equipment firms (see analysis).
CONSTRUCTION: Boosted by the slew of infrastructure
development projects over the past decade, the regions
construction materials sector, which has traditionally
been composed of small and medium locally based
companies, has seen robust growth in recent years.
The increase in the establishment of quarries, which
grew from three to 12 in the region between 2000 and
2010 highlights the jump in activity.
The region has a lot of land available that could be
developed for commercial purposes, which presents a
good opportunity for the region, said Driss Houar, the
CEO of Houar Enterprise, a construction firm in Oujda.
The province of Nador, which has long been a centre for the brick manufacturing industry, now has over
23 local companies, some of which export across the
country. Sonasid is present, with a steel production
unit in Nador that manufactures 600,000 tonnes a year.
Major foreign players are active as well. Swiss cement
manufacturer Holcim has been in the region since 1979
and became majority shareholder of a cement factory in Oujda in 1992. Construction activity in the region
has significantly increased since 2004, following the royal decree. Many of the big projects needed a lot of
cement. Now, more projects are private and of a smaller scale, said Khalid Kaaouachi, the director of Holcims
cement production unit in Oujda.
Indeed, while it had been public spending that spurred
the majority of initial development activity, nowadays
construction companies in the region are increasingly
catering to more private projects. Much of the Eastern
Regions urban areas are now being renovated and
increasing the number of affordable housing units has
been one of the priorities.
Partnerships between private and public real estate
operators are helping to build more than 33,000 affordable homes between 2010 and 2020, at a total investment of Dh8.2bn (729m). In the coming years some
14,749 housing units will be built in the prefecture of
Oujda-Angad, along with 11,608 units in the province
of Nador, 4470 in the province of Berkane and over 2000
units in the town of Jerada.
FINDING THE EDGE: Smaller roads in a number of the
regions provinces are also currently under renovation.
Competition between local construction companies is
pushing prices down and affecting revenues.
Prices offered for projects have decreased, said
Noureddine El Gourdi, the administrative chief for
Socit D & CRB, an Oriental-based construction group.
ORIENTAL OVERVIEW
The region is not short of sites and attractions to entice tourists
Despite being dogged by a slow start and construction delays, Sadia is already having an impact on diversifying tourist arrivals in the Eastern Region. Before
the opening of the Sadia Resort, visitors to the region
were 51% Moroccans and 49% foreigners, Amine Abdellaoui, the regional delegate for tourism told OBG. Now
the mix of nationalities is slowly changing, and 67% of
tourist arrivals to the region in 2012 were foreigners.
SEASONAL EFFECTS: Moroccans living abroad have
long been an important component of the visitor profile (in fact they are counted as foreigners for tourism
purposes), but the resort has had some notable success in boosting the number of European travellers
over the past two years, with new tourists from Poland
and Russia brought in by charter flights to the Oujda
Angads Airport in the summer. Seasonality remains one
of the main challenges of the resort, which has an 84%
occupancy rate in the summer months, but drops to
34% during the remainder of the year, which is considerably below the average yearly occupancy rates for
hotels across the country. Sadia is the regions calling card, but we need to develop additional products
With the economic

slowdown in the EU, the
main source of foreign
tourist arrivals, attracting
visitors from nontraditional markets is
crucial. Charter flights are
increasing access for Polish
and Russian tourists.
Regional contribution to national agricultural production, 2011(%)

14
12
SOURCE: Ministry of Agriculture
There are too many companies active in this sector in

the Oriental, so new niches will need to be explored.
Given the surge in government investment that has
occurred since 2003, construction firms and materials
manufacturers might find it hard to sustain growth levels from this period, although the Nador West and
Marchica ports and the expansion of the Sadia Resort
should help bring renewed activity to the region.
REELING VISITORS IN: With a variety of sites of interest that include a 200-km coast, mountainous areas,
thermal springs and the southern oasis region of Figuig, the tourism sector is not lacking in attractions, but
does need an overhaul in terms of hotel capacity and
infrastructure. The regions total capacity is currently
around 8000 beds, according to figures from the Regional Delegation of Tourism in Oujda. The overall goal is to
endow the region with a total of 120,000 hotel beds
before 2025, a massive increase in capacity. As with the
rest of Morocco, tourism is considered a crucial component to improving the regional economy. The tourism
sector is one of the kingdoms largest foreign currency earners, but the slowdown in its most significant market, the EU, has had an impact recently.
Still, the central government has pushed ahead in a
bid to entice tourists from new non-traditional markets, with the national Plan Azur strategy, which aims
to expand beachfront tourism (see Tourism chapter).
A key part of Plan Azur was the construction of a number of new resorts, including Sadia in the Oriental.
Over the past four years, most of the regions tourism
development focus has been geared towards the Sadia project, the first resort to be developed under Plan
Azur. The Sadia Resort was inaugurated in 2009 through
the opening of its first two five-star hotels. A third one
was eventually added, bringing the total bed capacity
to 4000, or half of the regions total accommodation
capacity. In the first three and a half months of activity, Sadia received some 37,000 tourists.
WORK TO COME: But the project is still some steps away
from its final goal of a 30,000-bed capacity, distributed
over a total of nine four- and five-star hotels and 3000
residential villas. Amenities will also include three golf
courses and a 1350-berth recreational marina, of which
750 berths are already open. Original plans have been
delayed due to the developers inability to secure credit under difficult financial conditions.
Initially, the Society Organisation of Sadia (Socit
dAmnagement de Sadia, SAS) owned 10% of the
project, partnering with the governments development agency, CDG Dveloppement, which had 60%,
and the states investment arm for the tourism sector, the Socit Marocaine dIngnierie Touristique.
The New Company of Installation of Sadia was set
up in 2011 to oversee the completion of the project.
SAS pulled out of the tourist side of the development,
selling its share to CDG for Dh1bn (88.9m), but is
retaining ownership of the projects residential component. CDG has agreed to add the next 3000 beds
with the building of three more hotels by 2014. More
public works for the towns water management
network have also helped with improving standards.
11
10
8
6
4
2
0
Citrus Olives
Vine
Sugar
Red White Almond Dates Honey Milk

meat meat
Cereals
12
ORIENTAL OVERVIEW
Human resource training through new hotel schools will be key in the development of regional tourism
A plan to create seven

tourist towns around the
Nador lagoon is expected
to create 80,000 direct and
indirect jobs, with 15,000
of those during the
construction phase.
Smaller-scale niche tourism
is also being explored in an
effort to diversify the
sector.
around the region that will allow the visitors coming

for beach tourism to extend their stay, said Abdellaoui.
Another large-scale tourism resort is set to become
one of the regions most ambitious projects in terms
of investment volume as well as with regards to its
sheer size. The Marchica Med tourism zone, which will
include seven newly built towns, is set to transform the
25-km-long Nador lagoon into a high-end tourism zone
geared towards local and foreign visitors. With a total
investment of Dh46bn (4.1bn) and an area of 4000
ha, the project will be under development over the
coming years. Total hotel capacity is set to reach 84,000
beds after its expected completion in 2025.
Driving this ambitious project is the Marchica Med
Development Company, set up in 2008 with capital
totalling Dh500m (44.5m), divided in equal parts
between the state and the Hassan II Fund. For each
of the seven specific tourist towns to be created
around the lagoon, a specific development company
will be created with the input of private investors. The
projected impact of the project on the region is substantial. It is estimated the development will create
80,000 direct and indirect jobs, 15,000 of which will
be brought in during its construction phase. Besides
several hotels, the resort will also include 2400 apartments, 1000 villas and an ambitious six marinas.
Cit dAtalayoun, the first section of the project,
expected to be completed in 2014, will be built in a
45-ha area. Its design includes a 360-room hotel, 650
villas, 2230 apartments and two marinas. The second
tourist town, Cit des Deux Mers, will be built close
to the spot where a channel opens the lagoon up to
the Mediterranean. It will have 320 villas, 193 apartments and 280 hotel rooms, for a total capacity of
3252 beds. Completion is set for 2014, and the project will include the establishment of a new water
channel to the sea to reduce currents inside the lagoon
and allow for better flow of water.
THINKING SMALL: Despite the considerable efforts and
investment being directed towards seaside mass
tourism, several other regional attributes can be developed for smaller-scale niche tourism. This will help
diversify tourism in the Eastern Region, protecting it
from the volatility that has affected other major tourist
destinations such as Sousse and Hammamet in Tunisia,
and should also have a positive impact on the more isolated areas to the south. Authorities have identified over
30 specific sites that could be developed to expand the
benefits of tourism to other areas inland from the
Mediterranean coast (see analysis).
The size of the Marchica and Sadia projects can
support the regions economic growth. However, given the hesitant nature of lenders in Europe and the
US, authorities might find attracting private capital
to be harder than initially planned. This may potentially delay the completion of the two projects past
their established deadlines. Another challenge for
the local tourism sector will be to train enough skilled
labour to support the Marchica and Sadia projects.
The Sadia Hotel School trains between 80 and 100
students a year. Added to this is the countrys Bureau
for Professional Training and Employment Promotion,
which opened an office in Nador to respond to the
future needs of the Marchica Med resort.
OFFSHORING: The regions geographic proximity to
Europe is advantageous for activities other than tourism,
with the government targeting increased investment
in information technology (IT), and in offshoring and
nearshoring in particular, which all offer the potential
for job creation and improved tertiary sector activity.
The expansion of the IT services sector is already part
of the PNEI, which aims to position the kingdom as a
key destination for the sector, and includes a target for
outsourcing to create 70,000 new direct employment
positions between 2009 and 2015.
In the Oriental region, offshoring activity got a boost
from the arrival of SQLI, a French IT services provider
with operations in several European countries. The
company arrived in the regional capital in 2005 under
an agreement with the Universit Mohamed Premier
in Oujda, opening an IT services centre as well as a
research and development unit within the university,
which focused on open source technology. The company currently employs over 100 people in Oujda.
The region expects more activity to come with the
opening of Oujda Shore, an industrial park specifically
for offshoring activities within Oujda Technopole. The
project, managed by MEDZ (a subsidiary of CDG) and
the Ministry of Telecommunications, is set to open in
2013, aiming to attract IT outsourcing companies to
its 22-ha park. The overall investment in Oujda Shore
will be 500m, and the government expects that a
Regional development objectives for 2009-20

2009
GDP (Dh bn)
Employment (active citizens)
2020
35
77
538,700
676,200
Total investment (Dh bn)

Informal sector's % of local commerce
SOURCE: Regional Council for the Oriental
120
46%
35%
14
ORIENTAL OVERVIEW
A greater number of university graduates are staying in the Oriental region to work
The regions university is

designing its curricula
around fields such as agroindustry, renewable
energies and IT, in an effort
to give students the skill
sets demanded by the local
job market.
The Bureau for Professional

Training and the Promotion
of Employment was
training 17,025 interns in
2010-11, according to a
2012 UN study.
successful replication of offshoring parks created in

Rabat and Casablanca will attract businesses looking
to take advantage of the regions competitive salaries
and Spanish- and French-speaking workforce.
HUMAN RESOURCES DEVELOPMENT: The ability of
the IT outsourcing sector, along with other secondary
and tertiary sectors, relies heavily on the region having a qualified labour pool. There is a disconnect as
there is throughout Morocco between the skill sets
of recent graduates and the job markets needs, which
has led to a worryingly high youth unemployment rate.
However, the basics are in place to improve the situation, which is crucial given that over half of the regions
population is under 25 years of age.
FRAMEWORK IS SET: The Orientals higher education
institution, the Universit Mohamed Premier, was established in 1978 and currently has over 35,000 students
at its three campuses in Oujda, Nador and Al Hoceima.
The university is designing its teaching policy around
some of the activities prioritised under the PNEI, such
as agro-industry, renewable energies, civil engineering,
transport and logistics, and IT. This will be essential to
create the regions future pool of professionals, who
are increasingly seeking opportunities in the Oriental
rather than in other regions. It is encouraging that graduates who initially moved to Casablanca and Rabat to
work are now returning to seek opportunities in the Eastern Region, said Aomar Anane, the vice-president for
research at Universit Mohammed Premier.
The university is also focused on cooperation with
the private sector, by allowing new business ventures
to establish themselves at its entrepreneurship centre,
Maison de lEntreprenariat. This opens up basic infrastructure for new developing companies whilst also
allowing university students to get work experience
through internships. As the country moves into regionalisation, we also want to decentralise our teaching
throughout the region, said Abdelaziz Sadok, the universitys president. The university is also considering
opening a tourism campus in Sadia over the coming
years to eventually increase the number of trained

human resources (HR) for the growing tourism sector.
Moroccos Bureau for Professional Training and the
Promotion of Employment (Office de la Formation Professionnelle et de la Promotion du Travail, OFPPT), has
25 offices in the region. According to a regional study
published by the UN in 2012, the OFPPT was giving training to 17,025 interns in all sectors in 2010-11. Through
its regional offices, the bureau has been focusing on
more training for tourism, IT and offshoring activities.
THE RISE OF RETAIL: The boost in public spending and
improved physical infrastructure has begun to stoke local
consumption, with domestic trading also on the rise.
Authorities expect that the informal sectors influence
on local commerce can be reduced to 35% by 2020.
Illegal trading is conducted mostly in petrol and dailyuse products such as household items. But contraband
activity has become less attractive given the reduced
import duties as part of the Morocco-EU Association
Agreement and the potential drops in government subsidies due to the countrys twin deficits.
Other signs that informal activity is less of a threat
have come from the success of newly arrived retail
outlets, which have risen in number since 2007. The
hypermarket chain Marjane was the first to arrive in
the region, and currently has two stores in Oujda, one
in Sadia, one in Nador and, most recently, a fifth store
in Berkane. It was followed by Aswak Assalam, another retailer with three stores in the region; Carrefour,
present in Oujda and Nador; and Metro and LabelVie,
which each have one store in Oujda.
The extent to which informal activity contributes to
the domestic economy nonetheless skews retail activity to a greater extent than elsewhere in the region. Contraband products include cooking oil, detergents, flour,
cookies and kitchen utensils. The same five-litre bottle of cooking oil priced around Dh65 (5.78) in a Marjane store can be found at about Dh50 (4.45) in the
informal market in central Oujda. According to supermarket chains representatives in the region, more
choice and better product standards are helping to
move consumers away from contraband products. Consumers want what is new and like the availability and
variety of brands. The establishment of retailers in the
region is also helped by the large number of Moroccans living abroad that are used to brands available in
Europe and want the same type of products when they
return home, Marjanes Nasri told OBG, pointing out
that sales at its Oujda store have been growing at an
annual rate between 4% and 8% since it opened.
OUTLOOK: The Oriental region has made a key choice
to invest in infrastructural development. Over the past
decade, this has equipped the region with the necessary conditions for its companies to expand into other domestic regions as well as to target European markets. The regions fortunes will also be enhanced with
further integration with Moroccos neighbours. An open
border with Algeria could have a positive economic
impact on growth. Sustained investment in new industrial zones and the regional focus on strategic sectors
will also help to foster a strengthened private sector.
ORIENTAL INTERVIEW
15
Mohamed Mbarki
Great expectations
OBG talks to Mohamed Mbarki, Director, Agence de lOriental
To what extent does the closed border with Algeria affect the development of the Oriental region?
MBARKI: Since Moroccan independence in 1956, the
border has been closed more often than it has been
open. Economic experts have identified that this causes up to 2% GDP loss across the Maghreb region. However, the current rate of economic development in the
area has made it less affected by the closed border, particularly in wake of the launch of the royal initiative for
the regions development in 2003.
At the same time, the region should also prepare for
the border to open so as to play a key role in the
Maghreb and indeed to partake in the Euro-Mediterranean region as a whole as well as to reinforce its
links with the national economy. Given the importance
of trans-Mediterranean exports, a port like that of
Nador West Med can play a key role in global shipping
flows and further develop the region as a consequence.
In what way does the informality of the economy

impact on development in the Oriental region?
MBARKI: The informal economy is a manifestation of
a sub-optimally functioning economy. The Oriental is
not more affected by informality than other border
regions in the country, or comparable regions elsewhere. Up to now, a common strategy for pushing back
the informal economy was through repression and control, but this is not a very effective strategy. It would be
better to tackle this issue via economic means.
For instance, contraband can be pushed back when
large retail stores arrive giving people more choice at
competitive prices and with quality assurances. But
people engaged in the sale of contraband also to develop certain commercial skills that could be useful if they
were to work in the services sector for instance. A study
undertaken by the Chamber of Commerce of Oujda has
shown that the informal sector creates jobs and destroys
jobs at the same time. However, the balance in that
regard is negative in the end, whereby the difference
is made by taxation and subsidies that enable infor-
mality to occur. In general though, the economy is gradually formalising, with more young people being attracted to stable jobs in the formal economy.
What is the best strategy to pursue in tackling the

high rate of youth unemployment in the region?
MBARKI: This is at present a worldwide problem, though
more fragile economies are most affected. The principal cause of youth unemployment is that the number
of graduates has exceeded the number of available jobs
now for some years. There is also the issue that the skills
of todays graduates do not correspond to those
demanded by employers. The Oriental region has distinguished itself for the quality of its university graduates. However, improving basic education levels and literacy rates is not just a regional priority, but a national
one. To address these problems, pre-schooling needs
to be further developed, and it is also important to
nurture a spirit of entrepreneurship. In this respect, the
agencies concerned now need to take responsibility
since the means, the money and the political will are
now available, even if implementation is not always
easy. Through these initiatives and in cooperation with
civil society organisations, we have been able to create about 2500 new jobs.
How can the development of value-adding industries be further encouraged in the region?
MBARKI: For us it is clear industrialisation is key to
development. In creating a strategy, we have focussed
on developing three industrial zones: the first is near
Nador, which is completed and is being commercialised.
With the new port of Nador and the Marchica Med, this
is a key zone for development. Next is the Agropole of
Berkane, built around the clementine business in
Berkane and aimed at creating value-added products.
Finally, the Technopole at Oujda provides an integrated industrial zone to bring about renewable energy
development and environmentally-friendly technologies, and includes an export-oriented offshoring zone.
ORIENTAL ANALYSIS
17
The region hopes to draw tourists to its southern provinces
Rural potential
Niche tourism is offering investment opportunities away from the busy
beach resorts
Much of the Eastern Regions history was founded on
the variety of its attractions, which range from sandy
beaches to desert oases. Now authorities are keen to
create niche tourism projects that help preserve the
natural environment while sustaining local communities through low-impact tourist inflow. Emulating the
success of other sustainable tourism ventures created across regions of the kingdom, notably in the Atlas
Mountains or the desert area of Ouarzazate, the Oriental is seeking to sustain local traditions and expand
the economic growth to its isolated, southern-most
provinces via tourism. Although Morocco has several
established ecotourism circuits that are internationally recognised, these rarely involve the Oriental region,
due to its distance from other tourist hotspots and the
lack of sufficient promotion over the years.
STAYING LOCAL: In a 2012 report analysing the Eastern Regions economic potential, the Oujda Chamber
of Commerce, Industry and Services (Chambre de Commerce dIndustrie et de Services dOujda, CCISO) underlined the potential ecotourism projects based around
the desert and its rural communities as effective ways
to promote growth, as well as to encourage rural populations to stay. In the report, the chamber highlighted the initial potential to draw 1000 to 5000 visitors a
year. These numbers are ostensibly small compared
with the potential of the Mediterranean coast resort
projects to the north, but the regions natural setting
encourages the development of niche products aimed
at higher-end travellers from Europe and the US.
MEETING CHALLENGES: However, existing infrastructure is insufficient to accommodate tourism growth.
Although small compared to the huge undertakings of
the Eastern Regions two beach resorts of Sadia and
Marchica, the government is already channelling investment to the rural areas away from the Mediterranean.
In 2012, Agence de lOriental announced a plan to
invest Dh28m (2.49m) in rural tourism. The main priority of this investment is to rehabilitate existent lodges
in rural areas, as well to build new units. Part of this
investment is also being directed at training for lodge

owners, and will be implemented up to 2015.
According to Amine Abdellaoui, the regional tourism
delegate, the big challenge is to equip the rural areas
across the region with quality accommodation. The city
of Oujda has 2000 to 2500 hotel beds, but other
provinces do not have many beds, or at least, not a lot
of tourism-qualified hotel capacity he told OBG.
TRAIN TO BOUARFA: The first niche tourism project
in the region is being designed using a railway that was
originally built in colonial times. The 350-km line linking Oujda to Bouarfa, 108 km south of the Figuig Oasis,
is the remains of an ambitious project to create a railway connection between the Mediterranean coast and
Niger. The Errachidia-based travel agency Suprateam
Travel initially tested the railway line as a desert train
concept with 700 tourists. The desert train pilot project has had good results and it has the potential to develop into a very distinctive tourism product. However, we
require a better train for this, it needs to be adapted
for tourism travel, said Abdellaoui. Nowadays, all we
have is one from the National Office for Railways of
Morocco, so the government might have to put out a
tender to get someone to supply a tourism wagon.
A total of 32 places of interest have been identified
as good rural tourism spots. These include the thermal
stations of Sidi Charfi and Fzouane, the forests of
Louassa El Hamra and the mountain of Jbel Lakhdar.
One of the regions star attractions is the Figuig Oasis
by the Algerian border in the far south of the region.
The CCISO report showcases opportunities to invest in
new restaurants, transport infrastructure and the establishment of residential lodges.
The focus on niche rural tourism will help to improve
the livelihood of more isolated communities that are
disconnected from the major investment drive taking
place in the north. However, by creating improved conditions on tourist sites to the south, the region might
be in a position to encourage travellers coming for the
Mediterranean beach resorts to also explore the south.
The publication of a report

assessing the regions
economic potential in 2012
has put added focus on
ecotourism projects and
incentivising the local
population to remain in
the area.
Rural tourism attractions

include the thermal areas
of Sidi Charfi and Fzouane,
the forests of Louassa El
Hamra and, of particular
importance, the Figuig
Oasis.
ORIENTAL ANALYSIS
19
Trade of goods across the Algeria-Morocco border ended in 1994
Next door neighbour

An open border could further boost economic cooperation
An open border between Morocco and Algeria would
enhance growth in the Oriental, and raise trade activity across North Africa. The closing of the Moroccan-Algerian border in 1994 represented a direct hit
to the Orientals economic prospects, prompting a
fall in trade and the prevention of movement of people between the two countries. Indeed, the impact
of the event was felt at all levels of the region, with
implications that extend beyond eastern Morocco
and western Algeria. It has been a source of contention that has stalled negotiations aiming for
stronger regional ties, and has become a touchy
subject blocking political and economical cooperation between the regions countries.
The centuries-old trade route that would allow
traders from the old Moroccan capital of Fez to do
business with what is present-day Algeria was the
source of a strong cultural flow between the Oriental region and cities in present-day Algeria. Nonetheless, and despite associated economic costs for both
sides, the closed border is seen more as an issue
between the two governments than the two peoples. Citizens and civil society on both sides have
expressed willingness for an open boundary.
In October 2012 Algerian and Moroccan activists
staged a peaceful protest, during the second
Maghreb Social Forum held in Oujda. The sit-in attendees were demanding the free circulation of people between different Maghreb countries and underlined the benefits of increased trade for the two
nations. The issue is especially pertinent for families that are spread out between Algeria and Morocco, who cannot cross easily to visit their relatives on
opposite sides of the border.
OFFICIALLY CLOSED: The border between Morocco and Algeria has been closed since 1994. The border issue has region-wide implications, especially
regarding the development of the Arab Maghreb
Union. Created as a regional trade block to facilitate
commercial exchanges between Morocco, Algeria,
Libya, Tunisia and Mauritania in 1989, the union has

barely held a meeting since 1994.
CREATING UNITY: A report published in 2012 by the
African Development Bank (ADB), titled Unlocking
North Africas Potential through Regional Integration,
argues that the low level of economic cooperation
among countries represents a loss for the entire
region. Despite strong ties due to a common history, religion and language, the North African region
remains poorly integrated. The economic cost of this
lack of integration is estimated to be around 2-3%
of GDP, the report states. The report further argues
that the North African region has remained one of
the continents most important economic regions,
representing a third of Africas annual GDP and
encompassing a population of 170m.
STILL FEELING THE PINCH: Intra-regional trade
remains weak; as an example, trade with other countries in the Maghreb represents 5% of Moroccos
total trade and only 3% of Tunisias, according to the
ADB, among the lowest of any regional economic
grouping on the continent. The current economic
situation in Europe might help shift focus to stronger
cooperation. North African economies, long dependent on European growth to encourage investment
and industrial output, have in some cases been heavily affected by the continents economic woes. Furthermore, economic consequences of the Arab
Spring, which have been especially prevalent in
Tunisia, Libya and Egypt, have also weakened growth
expectations across the region. This has put an
emphasis on the need for closer integration between
the neighbours in order to spur growth.
The Arab uprisings encouraged regional capitals
to begin engaging again for integration. In February
2012 the various foreign ministers of the Arab
Maghreb Union countries met in Rabat. It was the
groups first meeting in 18 years. Other steps that
have already been taken in 2013 might help open a
path to eventually solve the border issue. In January
The North African region

represents a third of
Africas annual GDP and a
total population of 170m,
and its enormous potential
could be better harnessed
through integration,
according to a 2012 report
by the ADB.
20
Steps to support
infrastructure development
are already being taken in
the Maghreb region, which
includes the Oriental. One
of these was the
announcement in early
2013 of the establishment
of an investment bank by
the Arab Maghreb Union.
ORIENTAL ANALYSIS
2013 the five countries of the Maghreb Union

(Morocco, Tunisia, Algeria, Mauritania and Libya)
announced the creation of an investment bank to
foster infrastructure development across the region.
The plan, in discussions since 1991, had been stalled
by the ongoing dispute between Morocco and Algeria. The bank will have an initial capital of $100m, in
which the five countries participate equally.
Relations between the two countries were framed
under encouraging signs last year. In January 2012
Moroccos foreign minister, Saad Eddine El Othmani,
visited Algiers with the goal of reviving the Arab
Maghreb Union discussions. The trip was the first by
a Moroccan foreign minister to Algeria in 10 years.
Additionally, in a televised speech, King Mohammed
VI said, Morocco will carry on with its endeavours
to reinforce its bilateral relations with all its Maghreb
partners including our neighbour and sister nation
Algeria in order to respond to the pressing, legitimate aspirations of peoples in the region.
LOCAL IMPLICATIONS: For the Oriental, a closed
border with Algeria has had an impact on the local
economy, prompting a rise in the exchange of contraband products between the two sides, and making it more expensive and time-consuming for local
industries (and companies in most other areas of
Morocco) to export the their products to the large
and wealthier market next door. For businesses in
the Eastern Region, Algeria is frustratingly close, as
it is far from easy to access. However, the flow of

investment that has filtered through to the Oriental is a sign that local authorities have decided to
develop the region rather than relying an open border to neighbouring Algerian as a precondition for
economic growth.
AT THE READY: For the Eastern Region, waiting is
no longer an option, but nor is it now an obligation.
The investment in roads, ports, urban renovation,
agriculture and technology training are geared at
transforming the Oriental into a new economic centre in the Mediterranean.
The border could open tomorrow, in six months
or in 10 years, said Ali Belhaj, the president of the
regional council for the Oriental. Since we do not
know when the border will open, we need to develop in accordance to the reality today, preparing the
region so it can survive with a closed border, but be
ready for when the border opens, he told OBG.
The impact of an open border could be considerable for all Maghreb countries by facilitating regional integration. Local commerce would be considerably enhanced and trade between Algeria and
Morocco would also be facilitated. A large amount
of exports would begin to pass through the region.
Regardless of the border situation, however, investment in infrastructure and industry looks set to continue apace, meaning the Eastern Region will develop without having to depend on its eastern neighbour.
ORIENTAL ANALYSIS
21
Improved city squares with new shopping areas are being built
A welcome facelift
Revamped centres and development of cultural spaces in the capital
The regions capital city is under renovation with new
roads and low-income housing being built. Located
just 15 km from the countrys border with Algeria, and
home to about 500,000 inhabitants, the city of Oujda
has historically been a trading conduit between Morocco and its eastern neighbour, and serves as the capital of the Oriental region. The city suffered from a lack
of public investment throughout the 1980s and 1990s,
which has resulted in deteriorating housing and transport infrastructure. A component of the regional development strategy is thus the revamping of the city and
the surrounding 82 sq km of greater urbanised area.
PLANS SET: Although work remains to be done, much
is being achieved under the Oujda Urban Development
Plan 2010-16. Led by the Oujda Urban Commune, the
plans stated objective is to give the city a new look and
improve conditions in some of its degraded areas.
Many challenges outlined in the citys development
plan are the result of organic, unplanned growth that
has shaped the capital. Oujda grew mainly through
internal migration from other more rural areas of the
region, which has had a negative impact on some of
the surrounding districts, in terms of economic activity and pressure on infrastructure. The disorganised
urban growth led to insufficient water and electricity
infrastructure, as well as a spate of informal construction. The plan also pinpointed road degradation and the
prevalence of the informal sector as two major challenges to the citys economic development.
The plan designated 56 projects budgeted at a total
cost of Dh2.1bn (186.7m) to improve the city. These
range from urban reconstruction to improving the citys
governance structures. It also established measures
for employment promotion through the renovation of
city spaces and enhancement of its cultural offering.
OUJDA URBA PLE: A big push for the citys urban repositioning will be done through a revamping of one of
its main areas, next to the citys iconic train station. The
Oujda Urba Ple project aims to transform 30 ha of the
city centre. The first phase, budgeted at Dh300m
(26.67m) will include the building of residential and

commercial units, as well as office space. A new train
station is also in the works and is expected to be completed by 2015. The old station is due to be restored
for its historic value, with a museum created. The
revamped square will also include new shopping areas.
AIMING AT ALL SEGMENTS: Developing low-income
housing is part of the plan to improve living conditions,
and authorities expect that up to 14,749 units will be
built in the Oujda-Angad prefecture alone between
2010 and 2020 with a total investment of Dh3.6bn
(320m). To avoid speculation and encourage private
participation in the construction of low-income housing, the government sells land to private developers
under the condition that a specific number of homes
in this segment are included in development projects.
For years, the region has been working to eliminate
shantytowns as part of the governments broader Cities
Without Slums programme, and 95% of them have
been cleared away, according to Mohamed Derdouri,
the director-general of Al Omrane in Oujda, a government real estate developer that focuses on building lowincome housing across the country. Since 2008, Al
Omrane has been putting up social housing in Oujda
units that cost around Dh140,000 (12,446) each. A
total of 5000 of these 50-60-sq-metre units are due
to be built in 2013. Another affordable housing initiative is the Ennasr project, which was built by a consortium consisting of a joint venture between Moroccos
Douja Promotion Groupe Addoha and ALEM, and which
has started to sell 10,500 low-income units in Oujda.
Changing cultural habits is adding pressure on housing needs, even as supply is rising. One problem with
social housing is that people do not like to live together. So, whereas entire families lived together before, now
couples want to have their own home, so a lot more
units need to be built nowadays, said Derdouri.
Middle and high-end accommodation is also under
construction, both in terms of new building and renovated older units. During the period between 2001
The Oujda Development

Plan 2010-16 seeks to
upgrade the appearance of
the Orientals regional
capital through the
renovation of city spaces
and expanded
infrastructure.
In line with the wider

Cities Without Slums
project, 95% of the regions
shantytowns have been
eliminated, creating space
for increased construction
of low-income housing.
22
With small businesses

accounting for an
estimated 55% of Oujdas
economy, much effort is
planned through 2016 to
register informal business
activities and organise
these enterprises into
cooperatives.
ORIENTAL ANALYSIS
and 2004, conditions were more difficult for selling

new houses and apartments; even if prices back then
were lower than today. So the economic upswing of
the region has made a tangible difference on the
availability of homebuyers, said Derdouri. Besides
apartments, the state-owned developer is also building villas in the region, with 1910 of a total of 4500
projected units already completed.
NEW LOOK: With such a wide array of public works
and private developments under way, the end result
is that whole neighbourhoods are being improved.
An investment of Dh28m (2.49m) is being used to
upgrade sanitary conditions in the north-west neighbourhoods of the city, through the expansion of the
existent wastewater network of 22 suburban neighbourhoods around Oujda. Roads are also being fixed
under a Dh350m (31.1m) programme of road renovation and expansion, which will likewise include the
citys public lighting grid and sidewalks.
Despite the relatively small size of the city, a study
will be done to consider the construction of a tramline. An added Dh80m (7.1m) will be spent on new
public squares, sports fields and parks around the
town. On the cultural front, the city has put Dh40m
(3.56m) towards building a new 1000-seat theatre
complex. The Sidi Yahia Oasis, located just 6 km from
the city, will be revived as a tourism site through the
promotion of an annual festival including Bedouin
poetry and shows. Furthermore, over Dh20m (1.78m)
will be spent on building sports facilities and on the

complete renovation of the citys municipal stadium.
EMPLOYMENT MEASURES: Although the citys urban
development authorities have a limited ability to affect
employment creation as a whole, the citys 2010-16
strategy is also putting in place several measures to
promote family-owned business. There is certainly a
need for this, given that the citys overall unemployment rate is around 22% and 35% for women well
exceeding the national average.
According to the Oujda Urban Commune, 55% of the
citys formal economic fabric is based on small commerce, which has placed a heavy emphasis on improving the business environment for small and mediumsized enterprises and increasing formal economic
activities. Between 2011 and 2016, a total of Dh8m
(711,200) will be spent on registering informal business activities and encouraging their organisation into
commercial cooperatives. An extra Dh9m (800,100)
will be used to create new markets around the city to
promote the organisation of commerce. The formalisation of trade will have a double impact by increasing the opportunities for formal employment and by
raising Oujdas communal tax revenues.
Urban development taking place will have a huge
impact not only on Oujdas economic development,
but also on the citys overall ability to convince new populations to settle down. This should help the Oriental
become a regional focus point for economic growth.
ORIENTAL ANALYSIS
23
The Eastern Region has 8.5% of the nations usable agricultural land
Living off the land

The region aims to increase agricultural yields and expand
agro-industry for export markets
Although mining and trade have long played a crucial
role, the Eastern Region has always depended heavily
on its agricultural sector for economic growth. With an
array of different climates and about 8.5% of the national usable agricultural land, the region has the natural
setting for production of several goods. According to
the Ministry of Agriculture, it produces 13% of Moroccos fruits, has 10% of its olive trees and 10% of its vine
plantations. The Eastern Region is also responsible for
raising 8% of the nations red meat. The Ministry of
Agriculture estimates there are 134,000 farms in the
region, although the majority of them are small plots
using traditional means of production. The total cultivable area is about 700,000 ha 109,236 ha of which
are irrigated, according to a UN report on the Oriental
region that was published in 2011. More than 70% of
available irrigated lands are located in the regions
provinces of Berkane and Nador.
SMALL ROADBLOCKS AHEAD: However, agriculture
in this corner of the country faces a number of similar
issues that affect the sector in other areas of the kingdom. Irregular rainfall, division of land into small plots
and relatively low levels of access to credit for purchasing modern farming equipment have all hindered the
process of bringing a boost to agricultural production.
As such, encouraging much needed investment to the
region to ensure produce can be taken to markets further afield, both domestically and outside of the country, remains an ongoing challenge.
INVESTING IN THE LAND: Under the Green Morocco
Plan (Plan Maroc Vert, PMV), the national strategy for
agriculture development, policy devolution is crucial.
There are 16 regional-level schemes known as regional agriculture plans, which allow the overall strategy to
be implemented locally, thus taking into account different agricultural contexts around the country. In the
Eastern Region, this will translate into the development
of a total of 77 projects at a total investment of Dh9.1bn
(809m) until 2020. This will benefit the regions main
agriculture products: olives, citrus fruits, dates, animal
husbandry, milk and almonds. It also puts an emphasis

on the need to attract private investors.
Of the total investment under the plan, 63.6% will be
government expenditure, with the remaining 36.4% to
be brought in by private companies wanting to set up
shop the region. Authorities expect that cheaper labour
compared to other regions and the natural availability
of agricultural inputs for large-scale industrial production will help to attract new business. Under the PMV,
the government expects to increase the number of
agro-industrial outfits in the region from around 65 in
2012 to 142 by 2020, according to the Ministry of Agriculture. Exports of fruits are targeted to grow from
80,000 tonnes to 345,000 tonnes by 2020.
BUILDING ON SUCCESS: The key to the plan is the
development of existing competitive advantages, rather
than trying to cultivate new segments. Most of the
projects will be designed to increase the production of
strategic products and bring them closer to industrial
processing and packaging areas to facilitate expedition
to markets. The biggest single investment per product
class will go towards increasing agro-industrial processing of fruits, which will receive a total of Dh1.2bn
(106.7m) between 2010 and 2015 for six projects
aimed at enlarging production areas around packaging stations. Building on the existing production and
processing of olives, especially in the region of Taourirt,
that are largely exported to the US and Europe, the
regional agriculture plan will put in motion 11 projects
that will convert 29,000 ha of cereals cultivation into
olive production in Driouch, Nador and Berkane, with
an overall investment of Dh407m (36.18m) between
2010 and 2016. This will be crucial for the growth of
olive processing in the region, which is ultimately
dependent on the availability of enough produce.
Over the last two years we have seen the price we
pay to local producers double because of weaker crop
yields and lower availability of produce, said Naima
Essenhaji, the owner of Triffa Conserves, a local olive
conserves manufacturer based in Oujda that exports
The national strategy for

agriculture development
calls for an increase in the
number of agro-industrial
outfits in the region from
65 in 2012 to 142 by 2020.
A large share of upcoming

investments will go towards
raising agro-industrial
processing of fruits in an
effort to enlarge
production areas around
packaging stations.
24
ORIENTAL ANALYSIS
Citrus fruits, including clementines, are a major export product
Developing irrigation
systems and aggregating
land into larger farms are
both tactics to help make
the sector more attractive
to private investors. Agroindustrial areas are also
being developed to create
added value.
85% of its annual production to France and Belgium.

The total olive plantation area in the Eastern Region is
set to double, reaching 119,000 ha by 2020. International olive certification programmes have allowed for
small local units to upgrade and start focusing on more
value-added products such as bio-olives for European
markets. Some cereal plantation areas will also be transformed to create 8250 ha of new almond plantations
in the provinces of Oujda, Taourirt, Jerada and Berkane,
with an investment of Dh162.6m (14.42m) by 2014.
OPENING FLOWS: Strengthening the reliability of water
sources will be essential to sustain an increased agricultural output in the future. The region had issues with
irrigation, but with the PMV, this has changed, said Kamal
Kantari, director-general of Station Kantari, the regions
biggest clementine exporter, based in Berkane. Water
supplies are now automated, and water is stored to mitigate weather and rain patterns. Compared to our
capacity in 2005, production could be tripled by 2014.
Station Kantari exports between 60,000 and 70,000
tonnes of agricultural products a year to the US, Russia, Europe and the Middle East. Increases in the total
area of irrigated land will ultimately allow the firm to
triple production between 2005 and 2014. The group
expects to increase value-added products by adding
orange juice for export, and hopes to take advantage
of government facilities to boost processing activities.
AGROPOLE DE BERKANE: A large part of the efforts
to attract private investment to agriculture has been
directed towards the creation of the Agropole de
Berkane. Construction work was started by King
Mohammed VI in May 2010, and the total cost for the
project is set at Dh473m (42.05m). This 100-ha zone
will be created as an agro-industrial area, focused on
adding value to the regions production through the
creation of an agro-industrial cluster.
The first 52-ha section has already been completed
and 86% of it has been allocated for development by
private companies. The key aim is to attract medium to
large agro-industrial units, with the biggest plots at
around 7000 sq metres in size.
Work on the next 20-ha section is due to start in early 2013. The project is set to include an agro-foods section, an area for the processing of agricultural produce
and a third zone focusing on logistics. Additionally, it
will also include research centres dedicated to training staff as well as product testing.
AGGREGATION: Creating conditions for new investment into the region will be important. Increasing land
aggregation could also have a positive impact on agricultural investment in the Oriental. The fragmentation
of land is posing a problem, in particular for small cooperatives. This is discouraging investment, as some 20%
of the land is made up of micro-plots, said Kantari.
Over the long run, the sector will also benefit from
increased accessibility to export channels. In order to
export our olives we always need to go to Casablanca,
and use the port there, and this reduces our competitiveness. It is a disadvantage for local companies, said
Essenhaji. The regions agriculture sector will thus need
to integrate more to take advantage of its attributes.
ORIENTAL ANALYSIS
25
Infrastructure upgrades are expected to help attract new industries
Pushing for industry

Better connected transport infrastructure eases the export process
Given the need to create employment opportunities
for its growing population and increase manufacturing output, authorities are aiming to establish new
labour-intensive industries in the Eastern Region. For
years, overall business conditions, including poor infrastructure, made attracting manufacturing companies
a difficult mission. But with rising investment in logistics and a network of sector-dedicated industrial parks
being developed across the region, a more inviting
environment for new businesses is being created.
MED-EST: Under the Emergence Plan, which was
launched in 2005, the government established a strategy to increase Moroccos industrial infrastructure and
enhance the level of its production units. As part of this,
the Agency for the Development of the Oriental has
created a region-specific industrial development programme. The national Emergence Plan resulted in the
launch of the Med-Est project, which aims to capitalise
on the improved accessibility brought about by the
Tanger-Med port in the north by creating clusters dedicated to technology and industrial development as
well as a brand new logistics and distribution site. The
ultimate aim is to upgrade the ancillary networks and
labour pool in the Oriental to allow it to compete more
effectively in attracting foreign investment.
DRAWING INTEREST: The regions industrial development has been minimal over the last few decades.
According to a 2012 report by the French Chamber of
Commerce and Industry in Morocco, the Oriental is
home to a total of about 300 industrial companies
employing around 7000 people. Most of these are
located in Nador, which has a legacy of small-scale
manufacturing, traditionally focused on construction
materials. Despite the existence of a handful of big factories, such as Moroccan steel company Sonasids facility in Nador and Swiss cement manufacturer Holcims
facility in Oujda, most of the regions industrial outfits
are small or medium in size. Traditionally, most industrial firms have been in the agro-industrial sector, which
employs about 30% of industrial workers in the region.
There is need for an industrial transformation. And

one of the great advantages, besides our location, is
that labour in the Oriental region is cheaper than elsewhere in Morocco, Rachid Slisli, the director of the
Oujda Chamber of Commerce and Industry, told OBG.
THE NEW NADOR PORT: Much of expected increase
in industrial output over the coming years is set to
originate from the agro-industrial sector, as the region
works to add value to its agricultural exports. The
Berkane Agropole industrial zone currently under development will house agro-industrial processing firms as
a way to add value to the agricultural sector.
However, the government is also focusing on
encouraging new industries to reduce the vulnerability of both output and employment for a handful of
areas. As part of this, there is a move to expand transport infrastructure to boost export capacity in nontraditional areas, such as petroleum products.
While the port of Nador Beni Ansar is already in operation, the creation of a new seaport, Nador West Med,
is under construction on an 850-ha plot of land located 30 km from the city of Nador on the Mediterranean
coast. The first phase alone is set to cost Dh5bn
(444.5m). The new port will include a hydro-carburant storage zone to manage the transfer of energy
exports to Europe, as well as a free trade industrial
zone to attract local and foreign companies. There are
also plans for a trans-shipment and container handling
area, although it is still unclear if this will be built straight
away or if a delay will be considered due to the regions
proximity to the larger Tanger-Med port to the west.
However, Nador West Med port is being billed as an
improvement on existent infrastructure for the countrys north coast rather than a replication of developments elsewhere. This project will not compete directly with Tanger-Med, but it will be a complement that
will impact the regions attractiveness, said Ali Belhaj,
the president of the regional council of the Eastern
Region. Exporting industries will clearly benefit from
having a fully operational port close by. Being in the
Efforts are under way to

expand the regions
industrial sector. In 2012
the Oriental was home to
300 industrial companies
employing around 7000
people, with the majority of
industry located in the city
of Nador.
26
There will be training

facilities at the industrial
zones to ensure the
availability of qualified
labour in the energy sector
and IT and offshoring, two
key industrial activities.
ORIENTAL ANALYSIS
Oriental increases operating costs because businesses are further from export points. The port of Nador
is underused today. For many companies, raw materials are shipped through Casablanca, which drives up
transportation costs, Nabil El Harti, the logistics director at Midi Peinture, told OBG. But this has been changing with improved connectivity. Recent investments
in road expansion have helped improve the region's links
to our targeted export markets, said Hamid Barda, the
manager of Bled Conserves, an olive exporter based in
Taourirt that sells 80% of its production overseas.
PARKING IT: To promote industrial development, the
government is putting land aside and investing in basic
infrastructure that can facilitate manufacturers to move
into the region, providing turnkey facilities and encouraging clustering. The Med-Est industrial park in Selouane
is being built 12 km from the city of Nador with a total
investment of Dh285m (25.34m). The project, which
is the result of a partnership between MEDZ, a subsidiary
of CDG Dveloppement and the Nador Chamber of
Commerce, Industry and Services, will initially include
142 ha of industrial plots with readily available access
to electricity and basic amenities. The park is focusing
on small to medium companies and relatively undeveloped secondary industries. Each plot is sized between
1000 sq metres and 5000 sq metres. The first section
has been finalised with 72 ha of plots.
However, Med-Est is far from the only such facility in
Morocco, with a number of new zones and parks under
construction or already in operation in more traditional economic areas of the country. To improve its attractiveness to investors, the Selouane park aims to offer
lower rent prices than those in other industrial areas.
According to figures from Agence de lOriental, the
basic price to rent a sq meter for industrial production
will be 44 a year, lower than the 58 per year for a
sq metre of industrial space in Casablanca or the average national price of 60 per year.
SERVING A MULTITUDE OF PURPOSES: Another industrial area, the Oujda Technopole, is working to become
an anchor for the settlement of new businesses in
technology-driven industries. With a total investment
of Dh600m (53.34m), the zone will eventually cover
a total area of 500 ha, to be developed in different stages
and with separate focuses. Within the Oujda Technopark
is Clean Tech, an area dedicated to clean energy technologies. Also operational within the industrial area is
the 22,500-sq-metre Oujda Shore, a Dh180m (16m)
IT business outsourcing area developed by the Ministry
of Communications and managed by MedZ Sourcing,
a MEDZ subsidiary that began operations at the end
of 2012 and aims to take advantage of the regions pool
of young graduates to attract IT businesses.
State programmes are set to further develop workforce capabilities. Inside the Oujda Technopole, Moroccos Bureau for Training and Employment Promotion will
create two human resources training facilities, one for
the energy sector and the other for IT and offshoring.
ORIENTAL ANALYSIS
27
Phosphate production is strong, with 28m tonnes produced in 2011
Digging it up
Legal reforms and added incentives should boost mining investment
Historically, the exploitation of mineral reserves in the
Eastern Region has played a big role in the economic
performance of the Oriental. It has also shaped the social
fabric of communities. For decades, coal mining was
essential for the livelihood of whole towns, providing
jobs as well energy for the region. Despite a reduction
in minings importance to the local economy, government plans to revive the sector and pay homage to its
significance to the regions identity are set to put the
industry back in a prominent position.
After the discovery of notable deposits in the area,
carbon mining began in 1939. The community of Jerada gained economic growth from mining, initially from
exporting its coal to other regions of the kingdom. In
1971 the new thermo-electric power plant was built
and quickly became the biggest consumer of the regions
coal, which allowed the facility to produce about onethird of Moroccos electricity.
SHIFTING SANDS: Things changed in 1990, however,
with the exhaustion of available coal reserves and the
consequent economic downturn. Further exploration
of potential deposits north-west of the original mine
site revealed a disappointingly lower quantity of minerals than expected. In addition to these bleak prospects,
the selling price of locally mined coal became 2.5 times
more expensive than imported coal.
The mine was eventually closed in 2001, which had
a pervasive effect on local living standards. A report by
the Oujda Chamber of Commerce, Industry and Services classified Jerada as the regions poorest province,
using 2007 figures, with a poverty rate of 22.8%, significantly higher than the 5.4% poverty rate in the Oujda-Angad province or even the 13.8% poverty rate in
the isolated oasis town of Figuig.
Despite losing the lustre it had decades ago, especially in the case of coal production in Jerada, the Eastern Region still accounts for 48% of the countrys lead
production and around 19% of barite output.
LEGAL CHANGES: The mining sector in Morocco
accounts for Dh53.6bn (4.7bn) in exports and employs
about 35,000 people, according to a 2011 report by

the National Bureau for Hydrocarbons and Mines (Office
National des Hydrocarbures et des Mines, ONHYM).
Most of the sector is driven by phosphate production,
which accounted for 28m tonnes of the 30m tonnes
produced in 2011, under the management of the
national phosphates company, OCP Group, formerly
known as Office Chrifien des Phosphates. Over the
past few years the Moroccan government has been
changing the mining laws to encourage investment in
mining other minerals, which exist in lower quantities
than phosphate, but have been able to attract some
foreign investment nonetheless (see Mining chapter).
In the Oriental region, the government is aiming to
garner interest for some of its mineral deposits. According to a document published in 2012 by the Oujda
Chamber of Commerce, Industry and Services, the lead,
zinc and silver deposits at Sidi Lahcen in the Debdou
region, the existent manganese mine in Bouarfa, and
the zinc deposits south of the city of Oujda all present
opportunities for development.
REVAMPING EXPLORATION: The government is looking to sweeten the deal for companies willing to reopen some of these mineral exploration sites or find
new ones. Currently, the mining code is well over six
decades old and in desperate need of an overhaul.
However, a draft law is pending, which, when passed,
will help update terms for exploration and commercial production, and put in place more rigorous bidding and evaluation mechanisms.
Fiscal terms are not particularly onerous compared
to many other mining producers elsewhere on the continent. According to the law for non-phosphate mineral exploration, all mineral-exporting companies
operating in the country pay a reduced tax rate of 17.5%
tax. Other incentives include 50-70% government
financing for a projects basic infrastructure needs,
such as roads, as well as access to utilities such as water
and electricity. Although the mining industrys lobbying body has long pushed for lower corporate taxes,
Despite a downturn that

began in 1990, the mining
sector still accounts for
Dh53.6bn (4.7bn) in
exports and provides jobs
for 35,000 people.
28
Mining licences are

managed by a government
body that works with
investors to reduce the risks
often associated with
prospecting. Although the
government can partner
with private mining firms, it
can only own up to 30% of a
new venture.
ORIENTAL ANALYSIS
rates remain below those in sub-Saharan countries

like Ghana and South Africa.
LICENSED TO DRILL: Investment into mining licences
is managed by the ONHYM, which spends between
Dh100m (8.9m) and Dh120m (10.7m) annually on
the exploration of potential mineral areas, according
to an investment report about the region published by
the UN in 2012. The public entitys role is to partner
with investors as well as reduce the risks associated with
exploration through initial prospecting. Companies
entering into the sector can partner with the ONHYM,
but the government arm can only own up to 30% of
new mining ventures. For 2013, the state entity has plans
to continue to explore for carbon sediments in the
central region south of Oujda to develop industrial mineral prospects in the Nador region and to prospect for
precious metals in the Bouarfa region.
Investors have the opportunity to enter the market
in two ways, either through the exploration of a certain region and mining of discovered deposits or through
the licensing of an existent concession with proven
mineral reserves. Exploration licences are given for 16sq-km plots for a duration of three years and can be
extended for an additional four years. Mining licences
are for a four-year period and can be extended for
three additional four-year periods. This latter method
is the most prevalent in the Eastern Region, where a
number of previously abandoned areas still present
opportunities for mining. In 2012 the Regional Invest-
ment Centre in Oujda registered 84 new projects in the

mining and energy sectors with a total overall investment of Dh157.7m (14.02m).
PICKING UP THE PIECES: The Jerada coal mine once
epitomised the regions potential for underground riches, but its subsequent fall and decline like coal-mining towns from Pennsylvania to Yorkshire has left the
area in a poor state. However, there are moves afoot
to try and revitalise the area, including through the
creation of an open-air museum. Agence de lOriental,
in conjunction with the Ministry of Energy and Mines,
the Ministry of Culture and Jeradas Provincial Council
are working to establish the Parc Musologique Minier
Jerada, hoping to bring increased economic activity
to an area with one of the highest rate of unemployment in the entire Eastern Region.
The initial studies for the creation of the park took
place in 2010. The old mining area will be protected
from further development and a museum facility will
be established, which will showcase old mining equipment and the regions broader history. It will include
areas for cultural recreation, sporting areas and a hotel.
However, the project will require amending current
legislation on historical sites. In 2012 Agence de lOriental took part in discussions to change the existing
law that regulates the protection of national heritage
to allow it to include industrial sites, buildings and
equipment and give them the same status as historical monuments in terms of governmental protection.
ORIENTAL ANALYSIS
29
A top priority for public spending has been linking infrastructure
Funding growth
A new development fund is putting small businesses on the map
through equity investment
One of the first consequences of the Royal Initiative
for Development of the Oriental Region was the establishment of a fund to invest in the regions small and
medium-sized enterprises (SMEs). The Investment Fund
for the Eastern Region (Fonds dInvestissement de la
Rgion de lOriental, FIRO) was designed to buttress governmental investment in infrastructure. While public
spending has often focused on linking transport to
connect the region, the establishment of the FIRO was
geared towards enhancing the private sector and
preparing it for future opportunities of the Oriental.
FOUNDING PRINCIPLES: The fund was set up with the
initial target capital of Dh300m (26.7m) to invest in
local companies with growth potential but insufficient financial muscle. Its innovative public-private
structure works with its fundamental objective of promoting economic growth in the region through the
financing of local business capacity. We must give
the private sector the necessary tools to take advantage of the governments investment efforts, said
Abdelkrim Mehdi, the director-general of the FIRO.
Accessing finance in any emerging market is a complicated task, but setting up an equity fund can be doubly challenging in a region of family-owned firms that
lacks the higher level of financial intermediation prevalent in the kingdoms central coast cities such as Rabat
or Casablanca. However, the FIRO has been able to
present an alternative financing vehicle for businesses that also need better operational and managerial
structures. Before the royal initiative and the heavy
focus on the region, companies did not know what
capital investment was. They were not even used to
accessing bank credit, said Mehdi. Banks in the region
have traditionally accumulated capital in deposits, but
not transferred it towards relevant amounts of credit
issuances to finance the local economy.
A MIXED STRUCTURE: The multiplier effects of improving financing for SMEs, particularly in North Africa
where they comprise the majority of businesses and
account for much economic activity, are huge. Increased
credit for entrepreneurs and long-established small

family businesses can have an impact on the ability of
local enterprises to trade with and expand into other
domestic regions and foreign markets. Using both private and public money, FIROs capital is divided between
national development agencies and funds, as well as
an array of private banks and financial institutions.
More than half of the funds, 57%, comes from three
public institutions: 20% from the Oriental Region, another 20% by Agence de lOriental and 17% from the Hassan II Fund. On the private side, equal 7.17% stakes were
contributed by Attijariwafa Bank, Banque Populaire,
Banque Marocaine du Commerce Extrieur, CDG
Dveloppement, Crdit Agricole and the Holmarcom
Group. Governance is divided between an investment
committee and a management committee, in order to
avoid any political intervention in the form of investment decisions, and to assure the fund is focused
towards regional development.
More than half of the fund is government money,
but we want to have a management style like any private fund, Mehdi told OBG. Since its inception in 2005,
the fund has been a key instrument stimulating private
sector development. This is especially important considering that the unemployment rate in the region was
17.7% in 2011, according to the High Planning Commission, above the national average, and the majority
of firms are small operations without the capacity to
absorb large numbers of employees.
From the onset, investment into large-scale regional projects was not part of the agenda. Big projects,
such as the new roads or the new port, are the responsibility of the Hassan II fund and other dedicated public funding, so there is no reason to duplicate efforts.
We are exclusively focused on SMEs, said Mehdi.
STAKING IT IN: The FIRO capital invested in local businesses is between Dh1m (88,900) and Dh30m
(2.67m) with total shareholder ownership from 10%
up to 35% of capital. Since 2008 the fund has already
participated in three SMEs with a total investment of
Set up with an initial target

capital of Dh300m
(26.7m), an investment
fund for the Eastern Region
is providing financing for
local enterprises.
The new regional

investment fund is focused
on smaller enterprises,
leaving larger projects to
find funding through
private sources or other
government financing.
30
Since 2009 the FIRO has

bought equity stakes in
three SMEs in the IT,
agro-industrial and
manufacturing sectors. Its
investment guidelines
cover areas such as
governance, financial
reporting and exit
strategies.
ORIENTAL ANALYSIS
Dh60m (5.33m) of investment, a positive record compared with the achievements of the profession: 35 existent capital investment funds have signed 120 operations since the emergence of the capital investment
sector in 1999 in the country.
SEEING THE CHANGE: So far, FIRO has acquired equity participations in three SMEs. First, in 2009, FIRO
bought 30% of Oujda-based FIRO Microwarehouse, an
e-commerce firm focusing on the sale of hardware and
IT that has been operating since 2004. This investment
allowed Microwarehouse to expand its store network.
Then, in 2010 FIRO concluded a shareholders agreement for its stake in Monlait, a dairy products industrial outfit based in Berkane that has been operating
since 1999. The fund acquired 28.33% of the company and has been supporting its strategy of product valorisation and expansion of milk production. It was also
the partnership with FIRO that allowed Monlait to gain
support from a USAID programme to increase the competitiveness of the national economy. In 2012 the milk
producer was awarded a Dh1.6m (142,240) grant for
the acquisition of new industrial equipment, helping
to increase the yield and quality of its products.
The third equity deal, also taking place in 2010,
allowed the Orientals development fund to invest in a
26.66% participation in Midi Peinture, a paint producer based in Oujda. The company has been operating
since 1984 and has FIRO shareholder ownership of
34%. Entering the capital structure of these three
companies is quite a feat, given that there is resistance

to the opening of the capital of SMEs. In the Oriental
region the business culture is used to managing companies on a daily basis, said Mehdi.
WIDER WINDOWS: This is changing with time and
increased investment in the region. Governmental projects now under development, such as the Oujda Technopole, the Med-Est industrial park in Selouane, the Agropole in Berkane and the Sadia Resort, are opening the
door for more companies to establish themselves in the
region. Newly available plots of land are adding opportunities for industries. This means additional SMEs with
potential will be looking for investors.
Every company in which FIRO buys a stake must be
a limited liability company, of foreign or domestic capital. FIRO investing guidelines also require a transparent managing structure and for financial information
to be published. Shareholding agreements signed with
the fund determine FIROs exit strategy.
According to Mehdi, a specific deadline for the duration of the equity participation is always established.
Of course the most desired output of an institutional investor like FIRO is the listing of the company in the
stock exchange, proof that the investor succeeded in
transforming the company into a structured entity
that meets international standards, said Mehdi.
FIRO has targets for additional capital investment
transactions that would fund the shareholding structure of four other companies by the summer of 2013.
ORIENTAL LISTINGS
31
Hotels typically add a 10% service charge on top of

the 10% tax. Some restaurants add a service charge
of 5-15%. If a service charge is not applied, it is advisable to add 10-15% to the bill. For taxis and other
services, it is common to round up to the nearest Dh5.
Mobile phone use is widespread and it is advisable

to buy a local SIM card upon arrival, which typically
costs approximately 2. Wireless internet is widely
available as well, although the connection may not
always be optimal, even within major urban centres.
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CHAMBERS OF
COMMERCE
Moroccan-BelgoLuxembourgian
Chamber of
Commerce
(0522) 200 061
Moroccan-Canadian
Chamber of Commerce
(0522) 476 483
Moroccan-French
Chamber of Commerce
(0522) 209 090
Oujda Chamber of
Commerce,
Industry & Services
(0536) 500 697
131 Great Titchfield St

London W1W 5BB
United Kingdom
T +44 20 7403 7213
F +44 173 026 0274
THE INSIDE EDGE
Published by Oxford Business Group

Morocco Oriental Region

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Morocco Oriental Region

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Morocco 2013

23 Living off the land: The region aims to increase

agricultural yields and expand agro-industry for

transport infrastructure eases exporting

incentives should boost mining investment

Nothings quiet on the eastern front: Growing

29 Funding growth: A new development fund is

putting small businesses on the map through

Chief Sub-editor: Alistair Taylor

15 Interview: Mohamed Mbarki, Director, Agence

investment opportunities away from beach

Field Operations Executive: Meltem

19 Next door neighbour: An open border could

further boost economic cooperation

development of cultural spaces in the capital

THE REPORT Morocco 2013

Some 4% of new projects fall under the category of tourism

Nothings quiet on the eastern front

A ROYAL INITIATIVE: Much of the drive to equip the

In 2012 the Oriental

The Royal Initiative for

The largest city is the

the regions capital and largest city, Oujda. Oujda is the

Efforts are being made to improve rail and road networks

connected the Orientals largest city to the countrys

Despite recent turmoil in

New investment projects by sector, 2012

Energy & mining

SOURCE: Centre Rgional d'Investissement

total of 77 agricultural development programmes across

THE REPORT Morocco 2013

The Nador West Med Port is

Breakdown of investment projects by sector, 2012

Textiles & leather

Expected job creation

Wood, paper & cardboard

Ironworks & electric enginering

Construction & public works

Energy & mining

SOURCE: Centre Rgional d'Investissement

The port is nonetheless underused. Its proximity to the

Private and public real

Authorities also hope that the added focus on

The region is not short of sites and attractions to entice tourists

With the economic

Regional contribution to national agricultural production, 2011(%)

There are too many companies active in this sector in

Red White Almond Dates Honey Milk

THE REPORT Morocco 2013

A plan to create seven

around the region that will allow the visitors coming

Regional development objectives for 2009-20

Total investment (Dh bn)

The regions university is

The Bureau for Professional

successful replication of offshoring parks created in

years to eventually increase the number of trained

In what way does the informality of the economy

What is the best strategy to pursue in tackling the

The region hopes to draw tourists to its southern provinces

investment is also being directed at training for lodge

The publication of a report

Rural tourism attractions

Trade of goods across the Algeria-Morocco border ended in 1994