Morocco is most attractive production base in MENA – Fitch Solutions

  • 2020-08-17 12:00:00
  • Reporter

The most attractive market in the Middle East North Africa (MENA) region for production opportunities is that of Morocco, according to Fitch Solutions Foundation in its latest report. The company is a reputed provider of data, research and analytics on the capital markets and the macroeconomic environment. 

Fitch says that Morocco is the top ranked MENA market in their Autos Production Risk/Reward Index, based on a robust outlook for production growth, low labour costs and positive industry policy. The organization noted that there is still room to improve, in terms of the country’s logistics network and increasing the active labor force. 

The country’s highest score, both on the Industry Rewards side and overall, is for its vehicle production growth, at 83.9 out of 100, based on the Fitch forecast. Morocco’s average labor cost score of 66.1 out of 100 indicates low labor costs, while it scores 81.3 for its industry policy, at 81.3, since the government actively supports the development of the industry. Both these factors make it attractive as a production base for foreign companies. 

However, the country scores just 35.7 for the capability of its manufacturing sector in general, but it is expected this factor will improve over time as sectors such as autos manufacturing develop further. 

Morocco is a popular choice as a production location for many automakers, including French auto majors PSA and Renault, due in large part to its strategic geographical position between MENA and Europe, as well as the trade opportunities, the Fitch report explained. This allows the country to maintain its lead in the MENA region’s auto sector, despite the impact of the global coronavirus crisis, which has impacted its auto production and exports. A robust  network of highways, railways and ports, with the busiest terminals in Africa located in northern Tangier, has helped Morocco position itself as a competitive export hub in the MENA region.

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