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Finance & Banking | Global Arab Network
London institution: Morocco Strengthening a financial future
Global Arab Network - - Ahmed Gamal
Financial institutions in Casablanca and London inked a partnership agreement as part of a broader initiative to deepen Morocco’s alternative markets and strengthen its appeal as an investment platform for neighbouring economies, Global Arab Network reports according to OBG.

The agreement, signed between Casablanca Finance City (CFC), a new project which aims to lay the legislative and regulatory groundwork for a regional financial centre, and TheCityUK, which promotes UK financial and professional services abroad, is intended to increase cooperation between the two bodies. The main objectives of the new partnership include facilitating the rollout of a derivatives market in Morocco, improving the competitiveness of domestic insurers and expanding training and educational programmes.

“The links with London are advantageous in that they can help UK companies to consider investing in French-speaking Africa by way of Casablanca,” Said Ibrahimi, the chief executive of Moroccan Financial Board that runs the CFC, told OBG. “London can also help the Bourse de Casablanca to develop new financial instruments.”

Morocco’s finance industry, already one of the continent’s more sophisticated, has experienced steady growth thanks to liberalising sector reforms in the past decade. The country’s sizable universe of financial actors have benefitted from economic growth that has averaged 5.5% over the past 10 years. The Casablanca Stock Exchange is now the fourth-largest bourse in Africa, behind South Africa, Nigeria and Egypt.

Perhaps more importantly, however, the country has also played an increasingly significant role as a staging point for expansion elsewhere in the region. Firms such as Banque Central Populaire, Banque Marocaine du Commerce Extérieur (BMCE), Attijariwafa and Saham Group have all started new units or purchased financial institutions in countries throughout West and Central Africa since 2005, lured by low penetration rates and strong GDP growth.

It is this trend that the CFC is hoping to capitalise on. “The idea behind the CFC is sound, since it anticipates strong growth across Africa, and this growth needs to be financed,” Hamid Ben Elafdil, the director of the Centre Regional d’Investissement Casablanca, told OBG. “Many funds will be channelled to Africa through Casablanca, often originating from London. What helps here is the country’s stability and its good international connections.”

However, to attract a critical mass of financial institutions and underwrite any significant volume of activity, the country will need to continue to overhaul its operating environment. Financial regulatory upgrades will be put in place to ensure the city’s smooth functioning. “To facilitate the development of CFC, financial regulations will be further upgraded in line with IMF standards; and a new market authority will be created, as well as a new body to regulate the insurance market,” Ibrahimi told OBG.

Given the significant returns that African markets offer investors starved of growth prospects elsewhere, Morocco is well-placed to capitalise on its fortuitous location and its developed financial sectors. To do so will require a number of further steps to strengthen its appeal as a regional centre – including improving the offer of alternative financial instruments and overhauling the legal framework – but as evidenced by the expansion of Moroccan firms into West and Central Africa in recent years, the potential is clear. (OBG)

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