The road to Morocco
February 24, 2008
However, Africa also represents the unknown: a continent overshadowed by unrest, separated by a number of languages, and with precious few means of entering the market without falling prey to systemic corruption.
In recent years, many African nations have worked to overcome this negative impression.
Egypt in particular has been in the limelight with the explosive growth of its telecommunications sector. Now Morocco has also emerged as a potential rival; the country’s government and IT sector have been methodically and silently building up a joint business plan to attract foreign investment, particularly from the UAE.
These initiatives were showcased at a recent conference in Dubai, held in collaboration with analyst firm IDC.
At the conference, Morocco sought to differentiate itself from other African markets by presenting itself as a source of innovation in IT.
Conference organisers APEBI – the Moroccan Federation of Information Technologies, Telecommunication and Off Shoring – also believe that Morocco’s geographical position and trilingual workforce make a prime destination for companies looking to outsource their operations.
Jamal Benhamou, APEBI’s CEO explains why Morocco is only now emerging as an IT destination.
“Our objective at first was to consolidate our positioning as a regional hub for the north and west African region. Many Chinese, European and US companies have come to Morocco because they know that they can benefit from the main free trade agreements we have signed with the United States, South America, Europe and North Africa.
“Secondly, we built up a strategy-based operation action plan which is a public-private voluntary policy to support development. It’s not totally operational, but when we built it with the prime minister, we tried to first know how the foreign partners can benefit from it,” he says.
Jyoti Lalchandani, IDC’s vice president and managing director for IDC Middle East and Africa, provides another reason why the country has decided to throw its hat in the IT ring.
“The government in Morocco has finally understood that any growth or development in the IT environment will have a substantially direct impact on the local economy, be that with employment opportunities, GDP impact or, obviously, with increased trade and foreign investment,” he says.
He believes that both Morocco and the UAE can act as gateways to their respective regions.
“There’s opportunities for Moroccan companies to enter the wider Middle East region through the UAE and vice versa – so there also opportunities for UAE and the wider Middle East companies to enter Morocco, French-speaking Africa, France and perhaps the EU,” he adds.
Through APEBI, Morocco has been present at Dubai’s GITEX for the last five years. According to Benhamou, APEBI participated so that it could study the unique business culture of the UAE and tailor its offerings to suit it.
“Making a business out of IT services – it’s not just about the technologies. Everybody’s got the technologies. It’s more a kind of cultural thing, how we work and how you work. What about our capabilities? Are we sure that by working together, we can make an original offering?” he asks.
Beyond announcing Morocco’s strategic plans, Benhamou aims to actively court potential investors through direct B2B meetings.
“We are not here to say, ‘You are the best.’ We know that you have some drawbacks and we have got some competencies. Our competencies can offset your drawbacks. It’s this kind of investment because we have a global vision – associating investments with exports and innovation,” states Benhamou.
In terms of available infrastructure, Lalchandani explains that Morocco has already built a number of technology parks, similar in design to Dubai’s Internet and Media Cities, with two located in Casablanca, another in Rabat, and a further pair scheduled to open in Tangier and Marrakesh over the coming year.
As he describes them, these parks are more than just expensive branded real estate.
“There are strategic benefits – for example, it’s much easier to hire foreigners out of these parks. It’s also far easier to set up a company and register it in those zones. I’ve had a number of meetings with the Moroccan chamber of commerce and they really facilitate investment, allowing foreign companies to come in, invest and move ahead quickly,” he says.
APEBI has also expressed ambitious plans to promote its telco sector, which almost quadrupled in value from 1998 to reach US$3.2 billion by the close of 2006. Benhamou claims Morocco’s telecoms sector currently ranks third in Africa, behind Egypt and Tunisia.
But taking on the likes of Egypt on its home front of telecoms is no easy task. Lalchandani says Morocco’s differentiation strategy will be through its value added services.
‘The perception that we have at IDC is that Egypt is doing a lot more in the offshore side, and also on the Arabisation side. The way Morocco is differentiating itself is by not really positioning themselves on the low end of the market, but by really adding value.
They understand that it’s going to be really difficult for them to compete with India and China, so I think they’re trying to add more on top through value-added services, be it solutions for fleet management, or developing solutions for financials and inventory management,” says Lalchandani.
While APEBI is out to attract the UAE’s IT investors, Morocco has been busy in other sectors as well.
“Many of the large real estate companies here – such as Emaar and Nakheel – have signed multibillion dollar agreements with Morocco.
There are also exports happening on the IT side but it’s currently primarily limited to offshore centres like call centre agencies that are located there for obvious reasons – trilingual language capabilities, lower costs. But I believe there’s going to be a lot more value-added high-end software development that’s going to take place in Morocco that both sides can benefit from,” says Lalchandani.
But perhaps one of the biggest factors for Morocco’s future success may come from – of all places – Lebanon. Since that country had its recent well-publicised troubles, many IT organisations have been on the hunt for a stable alternative, a position which North Africa has eyed with interest.
“Due to their current circumstances, their work is now being looked at in places like Egypt and Morocco. But also don’t forget, the Moroccan government is also placing a lot of emphasis on innovation.
So a lot of R&D and ICT funds have been set up in Morocco to facilitate that process. It’s not just the skills availability but also innovation coming out of Morocco that will be a huge advantage. The Moroccan government understands that they cannot fight this offshore battle on price alone, they need to move up the chain and provide value added services if they are to compete in the global market,” concludes Lalchandani.
