Morocco’s Foreign Investment Influx Reaches 5-Year High in January 2024

Rabat – After plunging by half in 2023, the influx of Foreign Direct Investments (FDI) in Morocco is bouncing back at the start of 2024.

At the end of January 2024, the net influx of FDI soared by an annual rate of 25%, totaling MAD 2.5 billion ($249 million), reaching its highest level in the past five years, according to a monthly update from Office d’Exchange (OE).

The notable uptick in the influx of FDI in Morocco is contrary to economists’ predictions signalling a tough year for foreign investments.

In 2023, a report from the UNCTAD indicated that developing economies are facing an increasing annual investment deficit.

In February 2024, another report from UNCTAD revealed that the flow of foreign investments into developing countries dropped by 9% in 2023, settling at $841 billion.

The trend has affected the world’s second-largest economy. In 2023, China recorded an “unusual” 6% drop in FDIs, the report explains.

In Africa, FDI flows were almost flat at an estimated $48 billion (-1%). Likewise, financing deals for projects dropped one-third, more than the global average decline, putting in peril prospects for infrastructure finance flows.

Looking ahead, the United Nations trade body predicts a modest rise in the flow of IDF as economies struggle with geopolitical risks and high debt levels.

“Looking ahead, a modest increase in FDI flows in 2024 appears possible, as projections for inflation and borrowing costs in major markets indicate a stabilization of financing conditions for international investment deals,” the United Nations Conference on Trade and Development maintains.

UNCTAD further argued that the drop observed in FDIs in 2023 was the result of “economic uncertainty and higher interest rates did affect global investment.”