Energy Moves Drive Project Needs
For Morocco, LNG imports would help deliver a gas-fired future, shifting from coal and its current reliance on importing energy from its neighbor, Algeria.
It would also provide feedstock for its planned push for gas-fired power generation to fuel industrial development and growth – and it’s worth noting that a big renewables push in solar and wind is also underway to deliver reliable clean energy supplies for energy-hungry homes and industrial users.
Analysts at Fitch Ratings believe this industrialization strategy is one of the country’s strengths, successfully spawning new foreign-financed manufacturing capacities, leading to a stronger diversification of exports.
“Upgrades to the infrastructure along with the creation of special economic zones and improvements in the business climate have attracted a steady flow of FDI (foreign direct investment) by large multinationals, mostly in the automotive and aeronautics industries,” Fitch analyst Mahmoud Harb said, highlighting a 10-fold surge in Morocco’s production of vehicles since 2007.
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Mining and tourism are also strong growth sectors for the country, but there remain a number of drags on growth. Morocco’s large agricultural sector, which accounts for 12.6 percent of GDP and 38 percent of employment, is vulnerable to weather risk, with drought in 2018 resulting in reduced outputs.
The kingdom’s dependence on energy imports also weighs on the economy: 2018’s higher oil prices put pressure on the public finances. This could be a concern if budgets were to be cut as with high levels of unemployment among urban youth (around 40 percent) and rumblings of social discontent since 2016, there’s a clear need for ongoing investment in education, training and job-creation.
Photo: Shutterstock
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