Morocco's red tape turns Gulf investors away

The North African country still remains a marginal market for investors due to its poor infrastructure, lack of proper legal framework and excessive red tape, say MENA-based executives.

TIhe government of Morocco is aiming to attract more Gulf investment, but turning that goal into a reality is proving difficult.

"I think that the government's vision of easing the way for Gulf investments is not compatible with the regulations that they place which take a long time to complete," said Ahmed Al Kandari, general manager of Kuwait's Al Kandari General Trading and Contracting.

The kingdom's poor infrastructure is also discouraging additional investments to be made in the agricultural field, Al Kandari added.

"It's really a shame because Morocco could be our gateway to the African markets. But if we try to ship food it would rot by the time it reaches the destination due to the [country's] bad infrastructure."

Other rules, such as the employment of Moroccan nationals in new projects, are also seen as a setback by some Arab investors.

"The minimum wage for a Moroccan is much higher than say someone from Asia, so this is another factor than is keeping Gulf investors from expanding here," Kandari added.

In terms of the banking sector, the lack of a legal framework that would guarantee the rights of institutions is keeping large Gulf financial firms away, said Ali Hamad Al Mesaifri, first executive manger of Qatar International Bank.

"There is a reason why Gulf banks are not present in Morocco; it's because the country still lacks the legal framework we need to operate in," he said, adding that the financial crisis has put many banks' expansion plans on hold.

The economic slowdown has also caused Arab investors to think twice about new ventures amid shrinking liquidity levels, said Mohamed bin Brahim Al Touijri, assistant secretary general for economic affairs at The Arab League.

"Short term, high return investments is what many Gulf investors are seeking and that's why they are not that interested in Morocco because most of the projects here have to be long term," said Al Touijri.