Can Anything be Done to Push Broad-based Economic Growth in North Africa?

After more than three years, what we’ve learned about increasing jobs and growth

Now that the “Arab Spring” has become an integral part of any analysis of the future of the Middle East/North Africa (MENA) region, it is worthwhile to see what we are learning about two core issues raised during the demonstrations – increasing youth employment and economic growth. While governments have worked with international agencies and donors to launch or revise programs addressing these concerns, and the related issues of governance and transparency, three challenges persist: scalability – what to do to make small-scale programs succeed when greatly expanded; sustainability – how to make the programs cost effective so that funding costs do not limit the utility and shelf-life of the efforts; and inclusiveness – how to impact beneficiaries in the broadest possible demographics of gender, ethnicity, age, and education.

Meeting of Maghreb Employers Union

Government, Donors, Private Sector partners for growth

Morocco is a good example of the challenges faced by policy makers and intermediaries who manage the programs. It has always had technical and vocational programs for young people, and the government has been working for the past two years to include other key inputs, such as market needs to shape skills training and career support for graduates to help them find jobs. So by the end of 2014, Morocco will roll out new and improved programs that aim to close the gap between skilled workers and job opportunities. With an overall target of 60,000 jobs for graduates per year, the Minister of Employment Abdeslam Seddiki noted that as of 2016, some 10,000 unemployed people will benefit from these specific programs in addition to jobs generated by other agencies, international donors, and the private sector.

USAID, the World Bank, various EU agencies, and others are funding and running programs in Morocco dealing with youth employment. There is concern that more needs to be done to ensure collaboration among the donors to maximize the impact and lessons learned. If a stable, economically active country such as Morocco faces problems with ensuring consistent, cooperative, measureable efforts for job creation, others in the region that are less stable are in much more difficult situations.

A Different Formula

A sacred cow that is coming under scrutiny is microfinance. It is no surprise that programs in limited environments, such as microfinance schemes in poorer urban communities and rural areas are an attractive first alternative. The common wisdom is that if a program just provides loans and oversight, people, especially women, will find ways to use loans

Promoting the growth of the informal economy can be facilitated by cash transfers

Promoting the growth of the informal economy can be facilitated by cash transfers

productively. But a growing body of research shows that “it ain’t necessarily so.” So much of the success of microfinance loans depends on the metrics of success. Repayment rates have long been the staple metric. Yet a number of recent convincing studies using rate of expansion of existing business activities and levels of beneficiary consumption as indicators show the limitations of microfinance programs, especially when they are introduced across more populated and economically diverse locations.

In a recent intriguing article in Foreign Affairs, the authors review several studies of the option of cash grants instead of microfinance loans. Some general conclusions are that recipients have more insights regarding how to expand their business and acquire the needed skills than external agencies. This is particularly relevant as there is a prevailing perception that the informal economy, where most of these recipients work, is “bad” because it deprives a country of a significant portion of the population’s contribution to GDP. The authors report that “many of the poor are working below their potential because they lack the capital, credit, or insurance products necessary to grow their businesses. In the absence of financial services, which can take decades to develop, cash can fill the gap.”

While they recognize that cash grants are not appropriate or effective in every case, “the evidence is stacking up faster in favor of cash than it is for a lot of the alternatives, and direct cash transfers deserve to shed their reputation of being eccentric.” If one goes further and links the impact of better and more effective assistance programs with the dynamic role played by the informal sector in terms of basic business experience, then the value of utilizing rather than constraining this human energy becomes apparent. In a recent video released by the Initiative for Global Development (IGD), Austin Okere, Founder/CEO of Computer Warehouse Group made the point quite emphatically. He said that there are 17.7 million companies in the informal economy in sub-Saharan Africa. If each added just one employee, they would create more jobs than the African governments combinedare able to generate.

Hernando De Soto addresses MENA growth

Hernando De Soto addresses MENA growth

A similar effort is underway in Egypt, where the Sisi government is trying to make good on its economic development promises. They have recruited famed economist Hernando de Soto, who long ago studied property rights in Egypt and was consulted by both the Mubarak and Morsi governments for advice as to how to free up Egypt’s moribund economy. His answer was quite simple, “This is where most of the country’s resources that can give you…the high growth rates are…it’s the informal economy.” Rather than try to constrain its vitality through more regulation, de Soto recommends an extensive plan to integrate the informal economy into the economic system by reforms and incentives to drive economic growth. The bottom line, as in this proposed initiative and the others, is to develop strategies that generate large-scale employment and robust and sustained inclusive economic growth.

 

Mobilizing Human Capital

The paths to linking effective strategies for growth and employment are still unclear. A major effort is underway at the Brookings Institution, with partners in sub-Saharan Africa, to assess programs addressing youth unemployment to gauge effectiveness and lessons learned. So far, the studies indicate far more about lessons learned than what works under a variety of conditions. What’s critical to the studies is that they are done on a country-by-country basis by local NGOs, thus providing vital first-hand data and insights that might not be obvious to outsiders.

The authors are releasing the studies individually so that researchers can do both country-specific and comparative analyses. “A number of lessons can be drawn from these country-focused studies,” they point out. First of all, know your beneficiaries, their backgrounds, demographics, social indicators, past and current experience in the informal and formal sectors, relevance of ethnicity or minority status, motivational profiles, and educational backgrounds.

Secondly, there is data that supports the effectiveness of government-sponsored vouchers and subsidies when they allow individuals to make choices that reflect their ambitions. This is particularly relevant to those who have experience in the informal economy and have a strong entrepreneurial sense of what is needed to expand and grow their business. Finally, they stress the importance of good data, not just focusing on unemployment rates, but digging deeper into categories of unemployment, quality of available jobs, and mismatches between jobs and potential employees.

Good Decisions Require Reliable Information and Critical Insight

While these studies focus on sub-Saharan Africa, the same types of challenges exist in the Maghreb, and the same in-depth

Fez - combining the best of old and new

Fez – combining the best of old and new

assessments are needed to understand not only what works and what doesn’t but why. A good starting point for this undertaking is to parse the recently released report on the impact of the first National Initiative for Human Development campaign in Morocco. The report categorizes the results of this most important effort to lift people out of poverty through introducing sustainable development projects. In his most recent Throne Day speech, King Mohammed VI tasked the Economic, Social and Environmental Council to look at the human development indicators in the country for the past five years and come up with recommendations to ensure equitable growth that supports the quality of Morocco’s “intangible capital.” It is this integration of political will, well-developed research, strategic thinking, and close attention to all stakeholders that will provide the clearest insights and policies for advancing growth and employment throughout Africa.

After the US Africa Leaders Summit: Key Challenge is Making Good on Promises

In a recent article published in Yale Global Online, Dr. J. Peter Pham, Director of the Africa Center at the Atlantic Council, concluded that “Whether [a recurring US-Africa Leaders Summit] happens or not depends on the Obama administration’s stewardship of the initiatives showcased during the summit, including the ability to work with Congress to authorize and fund projects, and also on whether the momentum of the gathering is sufficient to shift the Africa narrative in the minds of American decision makers and the general public who will influence policy and business decisions in the years ahead.”

This is the key challenge facing the Obama Administration – can it make good on the proposed initiatives announced during the Summit, or will the agenda of noteworthy programs fall prey to gridlock in Congress and a distracted Administration? Bipartisan recognition of the importance of more aggressively addressing opportunities in Africa – foreign policy and economic efforts included – was previewed in advance of the Summit by The Heritage Foundation in an issue brief, “Congress Should Upgrade the African Growth and Opportunity Act.”

AGOA Report Brookings African Growth Initiative

AGOA Report Brookings African Growth Initiative

Commonly referred to as AGOA, the current legislation expires September 30, 2015, and Congress is moving slowly towards renewing the law, which provides duty-free access for many African products to the US market. In return, countries are certified for AGOA eligibility if they continue progress towards a market-based economic system, implement democratic reforms including rule of law and human rights protections, and show improvement in their human development indicators. Unfortunately, AGOA only applies to sub-Saharan African countries, thus requiring another set of incentives for the Maghreb/North Africa.

Why Not Broaden the Summit To-Do List?

It is important to repeat the last point – much of what is being proposed for Africa by the Heritage Foundation and the US Government applies only to sub-Saharan Africa (SSA); and this remnant of old-school labeling of Africa ignores important trade and investment trends emerging across West and East Africa in particular. For example, as detailed in the Atlantic Council’s paper on Morocco’s multiple ties to Africa, which launched just in advance of the Summit, Morocco is broadening and deepening its historic ties to Francophone and adjacent regions of Africa through investments and trade, encouraged by King Mohammed VI as part of his economic diplomacy. But when the Heritage Foundation talks about the need to upgrade AGOA, it only looks at the African Union (AU), which has its own internal contradictions that can stand in the way of promoting greater integration of any kind.

That is not to say that Heritage’s recommendations are not critical; thoughtful analysts agree that the five goals mentioned are vital to AGOA’s success: extend AGOA for at least 10 years, encourage regional economic integration, provide additional incentives, facilitate greater bilateral private sector engagement, and support an FTA among African countries.

By not including North Africa, however, the paper overlooks key facts: Morocco is the second largest African investor in

Morocco's growing exports targeted for greater government support

Morocco’s growing exports targeted for greater government support

Africa; it is the only country in Africa that has an FTA with the US, which includes incentives to link with AGOA counties; it has one of the most robust transportation systems in the region; its power generation strategy complements plans for electrification of underserved areas in SSA; and its network of companies investing in Africa is an excellent conduit for foreign companies basing operations in Morocco to conduct trade and investment in Africa. Other Maghreb countries also have much to offer – from utilizing traditional south-south trade routes to encourage greater market integration and ease of the movement of goods and capital, to achieving economies of scale in the discovery, management, and transmission of hydrocarbons.

How to Make Promises into Realities

Enacting the US-Africa Leaders post-Summit agenda depends in large part on securing support from Congress, most immediately for the AGOA renewal/expansion and funding for announced initiatives. Related, but not on the agenda, is renewing funding for EX-IM Bank, a critical cog in America’s trade and investment strategy. For example, the US has promised an additional $300 million a year to promote Power Africa – to double access to electricity across SSA. Funding is to come from EX-IM, which may disappear if Congress doesn’t act. To support US exports and investments, a new seven billion dollars in financing for the Doing Business in Africa Campaign was announced, again with no clear inclusion of North Africa. The Millennium Challenge Corporation and others will also be playing a major part in fulfilling the Administration’s promises, with no clear indication that Congress is on board.

It will be challenging for the Administration to undertake its ambitious agenda without the cooperation of the Congress; but Congress itself held a very active event with the African delegations during the Summit. So, the goodwill appears to be rising for ramping up Africa-US ties across the board. Whether or not this can be kept on track and develop sufficient momentum will be indicated first of all by Congressional actions on AGOA and EX-IM Bank. This is a defining moment in US-Africa relations, and it should include all of Africa and benefit from the experience of those who are making regional economic integration a reality.

Economy Takes Center Stage in Moroccan King’s Revolution Day Speech

Calls for Continued Emphasis on Growth and Human Development

This week, King Mohammed VI of Morocco made a speech on “King and People’s Revolution Day,” marking the exile of his grandfather King Mohammed V, which began Morocco’s drive for independence from France. He addressed the challenges that Morocco faces as an emerging nation if it is to continue its growth in a stable, equitable environment.

Rather than single out any specific strategy, the King pointed out that “there is no single model of an emerging nation. Each country has its own development process, which is based on its human, economic and natural resources, as well as on its cultural heritage. It is also contingent on the obstacles and difficulties each nation has to face.” He then tied together several streams of activities that are requisites for a balanced national strategy.

He began by noting the beneficial results of having well detailed and thoughtful planning, both in terms of the general economy and specific sectors, such as agriculture and fishing. The King also mentioned how economic reforms are part and parcel of Morocco’s ability to attract investments in industrial sectors.

OCP encourages entrepreneurs through annual competitions

OCP encourages entrepreneurs through annual competitions

King Mohammed then focused on the contributions that resulted from the dynamism generated by the infrastructure priorities of the government, including ports, industrial zones, and renewable energies. After complimenting the Office Cherifien des Phosphates (OCP) for its global leadership in food security, the King gave particular attention to the renewable energy sector, which “is a further illustration of our capacity to rise to the challenge, thanks to an early clear vision, as well as precise priority planning to meet our country’s needs and reduce foreign energy dependence by relying on our own renewable resources.”

Challenges Continue                                                                                                         

Another area mentioned by King Mohammed was the need to build on existing trade and investment agreements and commitments to enhance the country’s competitiveness and improve job prospects of Moroccans. He said, “Morocco needs to take a few more steps to confidently move forward and join emerging nations.” Referring to trade agreements that Morocco has with Arab and African countries, the EU, and the US, and improving ties with Russia and China, he went on to say that “the gains achieved should not, however, be a motive for self-satisfaction, but a strong catalyst for further efforts and continued mobilization. As a matter of fact, if the Moroccan economy is to emerge, it should rely on its potential and the joint efforts of all actors; otherwise it is bound to miss a historic opportunity.”

Among the challenges the King singled out was competitiveness of export companies. “Unfortunately, Morocco is clearly lagging behind in this respect because of a weak, disorganized industrial sector and competition from the informal sector. In such a situation, strong corporations and businesses have to be set up to boost the immunity of the national economy, both to enhance international competitiveness and develop partnerships with small businesses in order to stimulate growth at home.”

Morocco is rapidly expanding its industrial base

Morocco is rapidly expanding its industrial base

Never far from his thinking is the invaluable contribution to the country’s future that can be made by a skilled work force. “The key to enhancing competitiveness and meeting development and job market needs is to have qualified human resources. The latter are also necessary to be in tune with the evolution and diversification of the national economy.” Young people are particularly important, and the King noted, “Thanks to their patriotism and creative genius, I am confident that our young people can achieve their country’s development and ensure its access to the club of emerging nations.”

King Mohammed then linked improved job prospects to the overall reform agenda of the country, as he believes that good governance is essential for balanced economic growth to be achieved. “It is a fact that to catch up with emerging nations, we have to continue improving the business environment. This can be achieved especially by pressing ahead with administrative and judicial reforms, combating corruption and moralizing public life, which is not exclusively the State’s responsibility, but that of society as a whole, individuals and associations.” Labor unions received a specific nod for their role in advancing Morocco’s future while contributing to social stability.

The human element: 3 ways businesses must connect with people in Africa

What’s the most important element to consider when getting started with investment in Africa?

There’s really only one answer: people.

In Africa, business is personal in a variety of senses, and it’s crucial to be aware of the connections one must make with people during every step of the investment process. Here are the various ways in which developing connections with people is at the core of business in Africa.

Upon entry: Connecting for insight

IGD - produces multipart series on business in AfricaOne of the most important steps in exploring overseas markets to is where to get your information. That aspect of planning is all the more important in Africa. When new to the continent’s business environment, be sure to listen to people who have been to your investment destination. successful or not in their business venture, it’s valuable to ask them about their experience in the country.

Furthermore, make sure to think broadly when seeking advice; look beyond your own sector, and consult U.S. commercial officers in your target market. Participating in organizations that bridge business between Africa and the international private sector is also important because of those organizations’ multiplier effects for experience and knowledge.

Research shows that most American companies in frontier markets base their decisions more on word of mouth than official studies, and truthfully, that approach makes sense. There’s no replacement for personal experience in African business. Important opportunities may be overlooked if you limit your company’s due diligence to traditional sources of information.

On the ground: Connecting for relationships

Once you’ve selected a market in Africa, it’s absolutely critical to know that in most frontier and emerging markets, business is still all about relationships. If you want to sell in Africa, you have to be present, you have to make an impression on potential partners, and you have to make an effort to understand the people you’re working with. A presence in Africa is a major advantage, and personal meetings to assess the viability of partners are vital.

Relationships make for effective contracts

Relationships make for effective contracts

The more that your company can understand that business in Africa is not a function of sending emails, the better off your business will be. Instead, business is a function of picking up the phone and talking to people, and it’s a function of traveling to the places where you’re finalizing transactions.

It really is all about relationship-building. In the end, those relationships — if properly cultivated — are a better guarantee of business success than a supposedly air-tight contract.

In the long-term: Connecting for sustainability

Another indispensable insight on business in Africa relates to your company’s presence in the local population. Traditional corporate philanthropy is no longer the most effective way forward. Africans want impact investing to create sustainable development that will encourage the growth of the continent’s human resources.

Companies have to look at aspects of business like training and improvements in infrastructure as serving not only the company, but also the local population. To make investments both profitable and sustainable, companies must implement impact investing that uses value chain and supply chain analysis to determine how the local community can contribute to the investments of the company.

The future of Africa needs action now

The future of Africa needs action now

At its core, a business must remember that it has many stakeholders, and the most critical audiences are its shareholders, and the local people. When you contribute to building skills in an area, you enable people to take better control of their lives. The benefits spill over into the economic and political sectors, and open even more business opportunities.

Think globally, act locally

The question of engaging with the local community through social impact investment relates directly to the approach that advises  “think globally and act locally.” A larger vision that is complemented by connections with African business leaders and the local African population  will undoubtedly lead to better strategic and operational outcomes. Correspondingly, a vision disconnected from local, human realities doesn’t have nearly as much promise and leaves a company vulnerable to more savvy competitors. Africa’s increasingly global role will only accentuate the importance of those local African voices.

“Countering Violent Extremism” The Moroccan Way

Women playing a major role in counter-terrorism strategies

I have just finished reading “A Gendered Approach to Countering Violent Extremism – Lessons Learned from Women in Peacebuilding and Conflict Prevention Applied Successfully in Bangladesh and Morocco.” It was written by Krista London Couture of the National Counterterrorism Center and released by the Center for 21st Century Security and Intelligence at Brookings. Countering Violent Extremism (CVE) is the latest acronym to join the list of references to conflict between state and non-state actors and the environments in which they persist.

Brookings study on women and counterterrorism

Brookings study on women and counterterrorism

The assumption of the study is that “an increase in women empowerment and gender equality has a positive effect on countering extremism.” She gathered data on 16 indicators to identify any linkages between women’s role in a society and its ability to counter extremism. , Ms. Couture claims that “violent extremism is most effectively countered through increased education, better critical thinking, and enhanced opportunities” for women and sets out to prove it in her study Ms. Couture chose Bangladesh and Morocco because of “their direct and indirect emphasis on women empowerment to fight terrorism and its perceived factors that drive recruitment and radicalization to violence.” In Morocco, she focuses on two programs – the Moudawana, the reform of the family law code in 2004; and the mourchidates program in which women are trained similarly to imams (prayer leaders) to act as community social workers and advisors to families.

Her research “focuses on identifying and assessing the ways in which women can and do commendably serve in the prevention role [not that of enabler or participant in terrorism or counterterrorism].” According to her account, “Research and policies indicate that female empowerment and gender equality indicators continue to be valuable gauges in peacebuilding and conflict prevention.”

When an indicator is a labeled a “gauge” it indicates to me that there may not be a causal link on which to build sustainable strategies. While the relationship may be important, even vital, there are no guarantees that improving the lives of women is more salient than other factors in preventing extremism. So how does her methodology provide more insights into how policy makers can assess prioritizing women’s empowerment over “hard” power solutions to terrorism?

Challenging Traditional Notions of Counterterrorism

Mourchidates have the same studies as imams - prayer leaders

Mourchidates have the same studies as imams – prayer leaders

As Fatima Nezza, a Moroccan mourchidate , remarked to Ms. Couture, “If you train a man, you train one person. If you train a woman, you train an entire community.” This remark echoes the observation that in Muslim-majority countries, as in most traditional societies, women are significant anchors to social stability and development. So the author’s 16 “Key Female Empowerment Indicators,” cover social, political, economic, and quality of life indicators as a baseline for assessing the status of women in a particular society. When women are valued and supported as credible voices for stability in a country, “Programs where women are active participants moderate the intent and action of extremism at varying stages of radicalization.”

The relationship between CVE and human development has been the subject of many studies since 9/11. It is clear that to Ms. Couture that “Investing in civilian populations is critical to the success of curbing violent extremism. An essential element of effective CVE programs mandates long-term stability.” In this context, a country’s level and extent of development is a crucial factor in CVE efforts. The Organization for Security and Cooperation in Europe (OSCE), the United Nations, and the US Department of State and Department of Homeland Security have issued reports on the role of women in countering extremism. “Strategists believe that when women are empowered socially, politically, and economically in culturally appropriate and relevant ways, they will become contributing members of society who hold the answers and solutions to complex aspects and issues inherent in CVE,” according to Ms. Couture.

The organization Sisters Against Violent Extremism (SAVE), has written “Women have a key role to play in funding and implementing new, alternative approaches to ending violent extremism. …their close proximity to potentially vulnerable youth through their roles as the main caretaker in most societies provides them with a unique point of view that can lead to vital insights into how to steer youth away from violence.”

Morocco’s CVE Offense

Three factors cited in the paper that influence the impact of Morocco’s CVE strategy are improvements in development indicators for women, their empowerment as a result of the Moudawana, and the targeted efforts of the mourchidates. Ms. Couture points to King Mohammed VI’s continuing reforms, the pace of social liberalization, and its effective counterterrorism regime as elements that set Morocco apart from other countries in the region. Morocco’s moderate form of Islam is also a crucial factor, and she notes “The Moroccan Government initiated a program of countering extremist views and interpretations of Islam by reaching the wider population with moderate Islamic narratives.”

Mourchidate working in community center

Mourchidate working in community center

She describes the mourchidates program in great detail and praises their “optimism and tireless efforts. By educating women and mothers, providing a safe and productive outlet and activity for youths, and providing positive alternatives and choices for prison inmates, female mourchidates are changing the tide of terrorism by blunting potential catalysts.” She recognizes that it will “take a generation of teaching moderate Islam and tolerance through education and communication within a community” to change radical views of Islam, and Morocco has made that commitment. Holistically, “Providing an education, fulfilling basic needs, and affording opportunities to women are what Morocco has deemed necessary to counter violent extremism effectively.”

Ms. Couture concludes her analysis by linking the CVE role of women to the notion of “smart” power promoted by Professor Joseph Nye as bridging the gap between soft and hard power. She believes that “Women, who typically invest more in their families, can be the best defense against ignorance, intolerance, and a lack of opportunities.”

Morocco has made its CVE strategy clear: promoting economic and human development, encouraging greater equity and political space, and supporting greater understanding and appreciation of the moderate principles of Islam are integrated into a cohesive program to advance stability and security in the country and the region. While more study needs to be done across a broader population, results to date indicate that Morocco has made a “smart” choice in its CVE strategy and the primary role of women in that regard.

Morocco Strengthens Its Case as Gateway to Africa

As US-Africa Leaders Summit Concludes, Focus on Security and Governance Gathers Momentum

The US-African Leaders Summit closed yesterday with President Obama promoting his vision of partnership between the US and Africa. At the morning press conference on Wednesday, August 6, he said that “Africa’s rise means opportunity for all of us—including the opportunity to transform the relationship between the United States and Africa…a partnership of equals that focuses on African capacity to solve problems, and on Africa’s capacity to grow.”

Obama Speaks on Need for New Partnerships

Obama Speaks on Need for New Partnerships

This resurgent message on African solutions to African challenges echoes remarks by King Mohammed VI at a business forum in Ivory Coast this year. They have become a core message for how Africa, made up of 54 countries that do only 12 percent of their trade among themselves, should advance locally, regionally, and internationally.

The President noted the clear purpose of the Summit. “We are here to take action—concrete steps to build on Africa’s progress and forge the partnerships of equals that we seek; tangible steps to deliver more prosperity, more security, and more justice to our citizens.” The Summit sessions on peace and security, youth empowerment, trade and investment enhancement, and good governance produced recommendations and proposals that will serve as the US agenda with Africa through the end of this administration. How this will play out in the coming months was the topic of meetings, think tank programs, and media events occurring throughout the week.

Security, governance, and trade and investment challenges dominated the agendas of most of the public events. From the Corporate Council on Africa and the Africa Center at the Atlantic Council to the Center for Strategic and International Studies (CSIS) and the Africa Growth Initiative at Brookings, among others, events emphasized stronger business ties, changing perceptions, and enhanced security cooperation. The Initiative for Global Development premiered a multi-part video series on Investing in Africa dealing with issues of misperception and understanding the business environment. And the Atlantic Council’s Africa Center hosted two events: the first focusing on the release of a paper on Morocco’s role as a gateway to Africa and the second, a panel exploring how to develop sustainable African solutions to security challenges in West Africa.

What is the Bottom line?

In his closing press conference, President Obama reflected on the discussions held during the day. “We agreed that Africa’s growth depends, first and foremost, on continued reforms in Africa by Africans.” This theme was repeated several times, as corruption, lack of opportunity, marginalization of women and youth, and lack of reforms were mentioned as barriers to a healthy and prosperous Africa. The President made reference to commitments by leaders to “pursue reforms that attract investment, reduce barriers that stifle trade…and to promote regional integration.” There will also be an “action plan to promote the transparency that is essential to economic growth.”

Dr. Ahmed Abaddi speaks on the need for integrated efforts to combat extremism

Dr. Ahmed Abaddi speaks on the need for integrated efforts to combat extremism

The US announced several cooperative initiatives to support young entrepreneurs and empower women across Africa a well as a New Alliance for Food Security and Nutrition that “aims at lifting 50 million Africans from poverty.”

On the security front, the US is launching a “new Security Governance Initiative” to train self-sufficient security forces beginning with six countries, and a “new effort [in West Africa] to bolster the region’s early warning and response network and increase their ability to share information about emerging crises.”

Interestingly, Obama said that there was agreement that the Summit would be a recurring event, while some pundits question if this effort will survive his administration. In the post-Summit press conference, it should be no surprise that there was only one question related to the outcomes of the Summit, as political events elsewhere dominated queries from the media.

How Does Morocco Measure Up?

Prime Minister Abdel-ilah Benkiran lead the Moroccan delegation

Prime Minister Abdel-ilah Benkiran lead the Moroccan delegation

The Moroccan delegation worked hard during this visit to raise the visibility of Morocco’s Africa agenda among US and African policy makers and businesses. Throughout the three days of meetings, programs, and events, Morocco demonstrated that it is in fact part of the solution to moving Africa ahead. On the issue of reforms, Morocco continues to work to make its emerging parliamentary democracy an effective vehicle for implementing the reform agenda in the 2011 Constitution. As regionalization brings more decision-making power to local citizens and their public officials, as civil society is strengthened through more consolidation and access to resources, and as greater respect and protection of human rights is promoted through the realization of reform programs, Morocco’s “best practices” provide examples for others to consider.

With respect to trade and investment promotion, encouraging entrepreneurism, and supporting job creating functions in the informal economy, Morocco is making good headway. The Casablanca Finance City, continuing capital reforms, energized Casablanca Stock Exchange, networks of banking, telecoms, transportation, and IT services throughout west, central, and Atlantic Africa countries, and expanding efforts to build sustainable solutions for youth and women employment, are signs that it is headed in the right directions.

Obama pledges to make the Summit a regular feature of US-Africa relations

Obama pledges to make the Summit a regular feature of US-Africa relations

Morocco’s push for enhanced regional cooperation is strengthened by more than 50 preferential trade agreements with key markets in Africa, Europe, and the Middle East. It provides scholarships for African students in Morocco; supports training for men and women engaged in religious activities to promote moderate and harmonious Islamic practices; has extensive ties for security training and cooperation; and works at the UN and other forums to encourage stability, cooperation, and justice.

On Thursday, the US and Morocco signed a bilateral “Framework for Cooperation on Training for Civilian Security Services,” which will enable the two parties to “develop mutual expertise in the areas of crisis management, border security, and terrorism investigations.” The agreement will enable Morocco to develop its training expertise for civilian security and counterterrorism training throughout the region.

According to Morocco’s delegation, their time this week in Washington, DC was well spent, as it was for the other African participants, confronting US perceptions that continued to divide Africa up according to stereotypes based on out-dated notions of race and geography. Morocco and emerging Africa want to be recognized for their aspirations and their achievements. The Summit programs made it clear that this can be a concrete opportunity for the US to rebuild its foreign policy successes around shared values and notions of respect, opportunity, and dignity.

From Promises to Partnerships to Projects to Results

US-Africa Leaders Summit Opens Business Forum to Promote Opportunities and Collaboration

Spending time with members of the Moroccan delegation to the US-Africa Leaders Summit, which included a high-level business forum on Tuesday, one gets the feeling that, regardless of what the US is able to do to re-establish its leadership in Africa, Morocco is committed to moving ahead with its ambitious industrialization, energy, agri-business, tourism, and other development priorities.

Among the government and business leaders, there is unanimity on four points: Morocco needs to work very hard to promote jobs throughout the economy and the country; valued jobs are largely created through public-private partnerships that match skilled employees with employers who actively participate in training the workforce; international investors are a key component in the eco-system of stakeholders who are critical for economic growth; and much of this growth will result from Morocco’s ambitious efforts to become the premier gateway for business in west, central, and Atlantic Coast Africa.

Moroccan minister El Alamy

Moroccan Minister of Trade, Investment, Industry, and Digital Technology, Moulay Hafid ElAlamy, leads efforts to attract FDI

The government’s business side is well represented at the business forum, beginning with Minister Elalamy was quite active in the private sector before becoming Minister nine months ago, with interests in Africa and throughout Morocco. Minister Bouhdoub was also recruited from the private sector, and his portfolio, focusing on small and medium sized enterprises (SMEs) and the informal economy, highlights two of the critical areas facing policy makers. They are joined by Amina Benkhadra, former Minister of Energy and now Director General of the National Office of Hydrocarbons and Mines (ONHYM), probably the country’s leading proponent of mining and hydrocarbon and renewable energy policies.

The business delegation is quite impressive, featuring long-established leaders who bring both experience and vision to their roles. Mostafa Terrab is the CEO of OCP Group, Morocco’s phosphates producer, which manages an array of training programs in communities in which it works and also for the larger workforce. Its global policy footprint focuses on issues of energy, food, and water security and feeding the rapidly growing countries of Africa. Miriem Behsalah Chaqroun, a businesswoman and President of the Moroccan Confederation of Businesses (CGEM), makes its clear in her interviews and meetings that enabling small and medium-size companies to actively participate in Morocco’s growth is vital to promote significant job opportunities.

Karim Hajji, CEO of the Casablanca Stock Exchange (CSE), noted that CSE is soon launching an initiative focusing on outreach programs to grow small and medium-size companies through training in the core elements of running a business, including planning, financing, management, labor relations, dealing with government regulations, legal issues, and entrepreneurism. His colleague Mohammed El Kettani, chairman/CEO of Attijariwafa Bank, points to the Bank’s network of operations in 14 African countries as well as four in Europe and four in the Middle East as an indicator of how Moroccan banks can serve the needs of international investors wanting to work in Africa and want a stable and developed infrastructure to support their offices.

Othman Benjelloun, CEO of BMCE Bank, heads one of the largest banks in Africa, with a money management firm and investment fund specifically targeting Africa. As a senior leader in the group, he speaks from several generations of experience with markets from the US and Europe to Africa and Asia.

President’s Aspirations for US-Africa Collaboration

President Obama started by saying “I’ve made it clear that the United States is determined to be a partner in Africa’s success – a good partner, an equal partner, and a partner for the long term…we want to build genuine partnerships that create jobs and opportunities for all our peoples and that unleash the next era of Africa growth.” Conscious of the need for concrete actions to enable this collaboration, the President pointed to new projects by Blackstone (energy investments), Coca-Cola (potable water treatment and distribution), GE (infrastructure projects), and Marriott (hotels) totaling more than $14 billion.

Moroccan Ministers speak at the US Chamber

Moroccan Ministers speak at the US Chamber

Despite a very contentious year with Congress, Obama pledged to keep pushing to renew the African Growth and Opportunity Act (AGOA), which gives preferential treatment to trade with most African countries in sectors that enhance local job opportunities. Additional steps included pushing for EX-IM Bank reauthorization, $7 billion in US trade financing support, a new advisory business council to support efforts in Africa, and more money for Power Africa, the project to double the access to electricity in sub-Saharan Africa.

What does this have to do with Morocco? Although there seems to be some deafness at the State Department regarding Morocco’s potential contributions to Power Africa, Amina Benkhadra quickly points out at least four. Morocco has vast experience in rural electrification – which now covers more than 95 percent of the country, over difficult terrain. It can supply the training and expertise to energy companies in other countries. Morocco relies on public-private partnerships (PPPs) for more than 60 percent of its energy and is well-schooled in the negotiations and management of PPPs, the key factor in energy projects across the continent. Morocco has the engineers and technicians who can train African workers to assume responsibility for their power systems, from installation, to testing, to operations and maintenance. Finally, Morocco is the most experienced African country in solar, wind, and hydropower generation, and its projects and expertise would benefit the overall strategy of Power Africa.

Backing this up is the fact that Morocco already has at least four power projects in Africa and, thanks to the more than 100 agreements signed by Morocco over the last six months, is poised to take on even more partnerships in Africa for power generation. So Morocco is already modeling the types of initiatives the US is coming to appreciate and support. And the Moroccan delegation has as one of its priorities that the US recognize the great potential of triangular projects wedding US finance, Moroccan expertise, and local African market requirements.

Moroccan Business Delegation at Launch of Paper on Morocco at Africa Center, Atlantic Council

Moroccan Business Delegation at Launch of Paper on Morocco at Africa Center, Atlantic Council

An excellent example is the Memorandum of Understanding signed during the summit by the US Overseas Private Investment Corporation (OPIC), Morocco’s Attijariwafa Bank, and Wells Fargo, which gives Attijariwafa a new credit line to expand lending to its SME customers, both in Morocco and African countries where the bank is present, and also facilitates American entrepreneurs’ access to the continent. The goal of intensifying its ties with American partners, says Attijariwafa, is “making Morocco a hub of trade and investments flows to Africa.”

Where Will This Go?

Looking ahead, President Obama also emphasized his priority on empowering young African leaders, some of whom are part of the Young African Leaders Initiative (YALI). He announced that the 2014 Global Entrepreneurship Summit (GES) will be held in Morocco and in Sub-Saharan Africa in 2015. President Obama noted four elements “essential to Africa’s growth” that would be discussed at the US-Africa Leaders Summit the next day: the need for rule of law, regulatory reform, and good governance to safeguard human and investment capital and promote transparency; agricultural development given the large portion of Africa dependent on farming; rebuilding a strong health infrastructure; and promoting security and peace, “because the future belongs to those who build, not to those who destroy.”

From promises to partnerships to projects to results…is a generational challenge. Business thrives over the long term in a stable and predictable environment. Africa at this point is as much a challenge as an opportunity. Transnational and regional collaboration for economic growth will help stabilize areas experiencing difficulties despite their potential. Morocco has much to offer; it is a proven partner for the US; and it is, perhaps, a very smart option for rebuilding the US presence and influence in Africa.