UAE and Morocco train sights on further trade with rail deal

WAM

• Commitment to bilateral trade
• UAE to invest in Moroccan rail
• AED3.6 bn trade in 2022

Leaders from the UAE and Morocco have signed a declaration aimed at boosting bilateral trade, including a commitment to invest in high-speed trains in the North African country.

President Sheikh Mohamed bin Zayed Al Nahyan and King Mohammed VI met during a state visit to Abu Dhabi last week.

No specifics were disclosed about the rail investment deal with ONCF, Morocco’s national railway operator.

The country’s 2040 Rail Strategy includes plans to extend its high-speed rail network, with trains travelling at speeds of up to 320 km/hr. They also aim to connect 43 cities, up from the existing 23, covering 87 percent of the population.

A budget of $37 billion has been allocated to the strategy, according to ONCF.

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In October, local media also suggested that Morocco will build a high-speed rail link between Casablanca and Madrid – to be completed ahead of the north African country hosting matches at the 2030 Fifa World Cup.

Samer Talhouk, a country risk analyst at BMI, formerly known as Fitch Solutions, said the transport and logistics sector is of particular interest to the UAE, as evidenced by visits from Emirati companies such as Abu Dhabi Ports Group and Etihad Rail earlier in 2023.

“The enhanced economic alliance with the UAE will serve to bolster Morocco’s position as a key exporter to Europe and enhance the kingdom’s efforts to position itself as a hub for foreign investment targeting regional supply chain diversification,” he told AGBI.

Several other memoranda of understanding were signed to establish new partnerships across sectors including rail, water, clean energy, phosphates, agriculture, ports and aviation.

“This strengthened partnership with the UAE will also help Morocco support its claim over Western Sahara,” Talhouk added. “The MoUs include plans to develop Dakhla’s airport and port, drawing the UAE into investments in the disputed territory.”

Dakhla is the capital of the Moroccan-administered province of Dakhla-Oued al-Dahab in the Western Sahara where a dispute began in 1975 following the withdrawal of Spain, the colonial power.

Morocco claimed sovereignty but faced resistance from local people and its military wing, the Polisario Front. A referendum was promised but has not materialised. Morocco’s claim to the territory has been recognised under the Abraham Accords.

Doubling trade

The UAE and Morocco want to double bilateral trade and investment volumes over the next seven years.

The two countries formed a taskforce in May to build on their AED3.6 billion ($991 million) non-oil foreign trade last year, which was up 16 percent from 2021 and more than two-thirds higher than 2020.

The UAE is the second-largest foreign investor in Morocco, accounting for $14 billion – more than 20 percent – of the total foreign capital stock in the kingdom.

During King Mohammed VI’s visit, the establishment of an investment partnership related to the Morocco-Nigeria gas pipeline project was also agreed.

Upon completion, the project – estimated to cost $25 billion – will be the world’s longest offshore pipeline and is scheduled for completion in 2046.

Agreements were also signed on joint cooperation between the countries’ financial markets, plus an investment partnership in the tourism and real estate sectors.

Morocco’s real GDP growth increased to 3 percent in the first half of 2023, but the country was devastated by the Al Haouz earthquake in September, which left more than 3,000 people dead.

However, the World Bank said preliminary evidence suggests that conditions have normalised quickly in most destinations and authorities have announced an ambitious reconstruction and development plan for the High Atlas Mountain region.