Utah businesses looking for a gateway into the continent of Africa should consider establishing a foothold or footprint in Morocco.
That's the advice of World Trade Center Utah (WTC Utah) President and CEO Derek Miller, who visited the Kingdom of Morocco in April before stopping in Algeria for the annual meeting of the World Trade Center Association.
When he left Gov. Gary Herbert's administration to lead WTC Utah, Miller was admonished to seek an opportunity to build upon a decade-long relationship the Utah National Guard has shared with the Moroccan Royal Armed Forces. The two military organizations have been conducting joint exercises and sharing best practices for 12 years. Since Morocco is a neighbor to Algeria, the World Trade Center Association annual meeting afforded Miller the perfect opportunity to visit the kingdom.
While in Morocco, Miller met with the Minister of Energy, the Minister of Mining, the Ministry of Investment and Trade and the National Economic Development Office, the latter being a private sector organization similar to the Economic Development Corporation of Utah that manages the "Invest in Morocco" effort.
On a broader scale, Miller says Morocco provides an excellent gateway to the African continent, which has been enjoying overall economic growth of nearly five percent annually, but the kingdom also offers plenty of its own opportunities for Utah businesses. Morocco and Utah have much in common. They both put forth a strong effort to maintain a business-friendly environment, while mining and energy are big parts of both economies.
"There are some real opportunities in both of those industries for Utah companies," Miller explains. "Morocco is currently coal-based, but the kingdom has made a big push to obtain 50 percent of its energy portfolio from renewable sources by 2030. The government has made a $30 billion investment toward that goal."
The focus on renewable energy presents opportunities for Utah companies in the areas of research and development and renewable energy infrastructure. "Utah has done some substantial projects in wind, solar, biofuel and geothermal, while we also have great R&D in these fields from work being done at Utah State University and the University of Utah," he adds.
In the mining industry, which makes up four percent of Morocco's GDP and 22 percent of the country's exports, Utah companies can provide expertise in mining equipment and geologic mapping – two areas where Utah has competitive advantages. "We export a lot of mining equipment to South American countries like Peru, so it would be a natural fit to export mining equipment to Morocco," says Miller. He notes that numerous companies in rural Utah manufacture mining equipment, so the opportunity could be especially beneficial for them. What's more, the state's universities have programs to support the mining industry that they could likely leverage to their benefit in Morocco, such as the U of U's program in geologic mapping.
As for using Morocco as a gateway to Africa, Miller says Morocco offers a variety of geographic and internal infrastructure benefits. Geographically, the kingdom borders the Mediterranean Sea and just built a new port in Tangier, a major city in northern Morocco that is just across the Straits of Gibraltar from Spain. Regarding internal infrastructure, he explains that Morocco enjoys strong financial and insurance systems and has established the rule of law, which is important for protecting intellectual property.
"The Moroccan government has established an attractive business environment, which a variety of European companies are leveraging to expand into Africa," Miller continues. He cites European auto manufacturers as examples. Both Pugot and Renault have established large manufacturing facilities in Morocco in order to serve the growing African market.
Miller says he came away impressed with everything from the business environment and opportunities in Morocco to the interesting approach the kingdom has taken toward economic development and the economic environment. For example, economic development incentives in Morocco aren't tied to job creation per se. Rather, he explains, companies receive economic incentives for the supply chains they bring with them. "So a large manufacturer will receive an economic incentive for the number of smaller, supplier companies that the manufacturer brings with it," he says. "Morocco focuses on the second tier companies because it helps diversify the economy in a vertical way."
In another area, Miller says the Prime Minister of Morocco created a National Committee for Business Environment, which is essentially a working group made up of public and private sector leaders that meet monthly to tackle the biggest impediments to business. The group discusses the obstacles to business and develops ways to remove them.
"It's much like the effort Gov. Herbert led to remove regulatory roadblocks in Utah, only this is an ongoing effort rather than a special project," he explains. "It's a true working group that focuses on one obstacle at a time until the problem is solved and then they move on to the next one."
For more information about doing business in Morocco or Africa, Miller encourages Utah businesses to contact the trade services group at WTC Utah for guidance and help: 801-532-8080.
About World Trade Center Utah
The mission of World Trade Center Utah (WTC Utah) is to help Utah companies think, act and succeed globally. WTC Utah accomplishes this mission through three key objectives. First is to motivate and educate Utah businesses to expand their global presence through training seminars, regional forums and newsletters focused on international business development, trade issues and export opportunities. Second is to build capacity of Utah businesses for international trade through B2B consultations to identify expansion goals, assess current capabilities, determine overseas opportunities and connect companies with market experts and potential partners. Third is to expand global network of Utah businesses through trade missions and networking with foreign trade officials.