Rabat - Morocco’s integration to the Economic Community of West African States (ECOWAS) presents great opportunities as well as challenges for the Kingdom, notably in terms of investment and economic cooperation, says the Moroccan Center of Economic Conjuncture (CMC) in its monthly letter.
Rabat – Morocco’s integration to the Economic Community of West African States (ECOWAS) presents great opportunities as well as challenges for the Kingdom, notably in terms of investment and economic cooperation, says the Moroccan Center of Economic Conjuncture (CMC) in its monthly letter.
The CMC latest publication focuses on five major areas pertaining to Morocco’s potential integration into ECOWAS: “Morocco and Regional Economic Integration in Africa: The ECOWAS Approach,” “Investments of Morocco in ECOWAS: Opportunities and Challenges,” “The Pipeline Nigeria-Morocco: A mega-project for regional economic growth and integration” and “Morocco in ECOWAS: What impact on activity and growth?”
Morocco-Africa: Significant development but a long way to go
The first section covers the Moroccan-African economic relations. While the south-south business cooperation is flourishing and seeing a significant development, the CMC believes that there is still much more effort needing to be made.
Morocco’s trade volume in Africa accounts for 7 percent of the total volume of its external transactions, constituting MAD 39.9 billion out of 590.3 billion at the end of 2015, compared to 4.4 percent in 1998, when trade volumes amounted to only MAD 7.3 billion out of 167.3 billion.
Despite these low figures, the CMC notes that the dynamics of trade is more sustained in average annual growth with 11.5 percent with Africa compared with 8.3 percent for the rest of the world.
Morocco’s return to the African Union also plays a key role in its integration to the ECOWAS, as these exchanges present a great potential of strong expansion, notes the CMC. However, this expansion of trade must not obscure the fact that the competitive positioning of Morocco remains to be constructed according to nature of the exchanged products and to the countries on which these exchanges take place.
The Political Prospects of Morocco’s Integration to the ECOWAS
While Morocco has established itself as a major economic player in Africa, its return to the AU and its desire to integrate the ECOWAS has raised many concerns in the region. The CMC notes that many countries are worried by the political agenda of what they call an “intrusion” of a country that is too close to Europe, while others perceive it as representing logistical support for trade relations and even contributions of financial expertise and industrial and agricultural skills exchanges.
The Nigerian-Moroccan Pipeline: Hopes of Regional Economic Growth
The Nigeria-Morocco gas pipeline constitutes for Morocco a unique factor in integrating West Africa, which will bring new growth dynamics to the region as a whole.
If for Morocco, this gas highway will be used to secure its supply, the target is even more ambitious for the West African region. Due to its size and regional character involving some 15 countries, the project is expected to play a decisive role in the development process by enabling the creation of an integrated electricity market and the development of production activities, as well as increasing attractiveness of investments and competitiveness in export markets.
According to the CMC, this project would take its starting point from the Nigeria deposits to transport natural gas to Morocco and from there to Europe.
The impact of Morocco’s integration to the ECOWAS
While Morocco’s desire to integrate the ECOWAS may seem in the current context like an admission of failure of the Arab Maghreb Union (AMU), the CMC explains that it aims to open up more promising new horizons for Morocco through the development of its relations with sub-Saharan countries.
The economic impact of Morocco’s accession to this regional grouping can be assessed through the export dynamics. In the event that the admission of Morocco to ECOWAS gives rise to a strong impetus for exports in the region, the multiplier effect on the whole of the activity can be quite significant, concludes the CMC.
The ECOWAS regional group is bound by a multilateral agreement comprising 15 West African countries and has a total population of over 300 million. With a consolidated GDP estimated in 2015 at USD 632 billion, this economic hub is currently ranked 21st in the ranking of world economies.