City & Financial Global Ltd is one of the UK’s leading research-based conference companies specialising in high-level international conferences in the fields of Finance, Fintech, Cyber-finance and risk management to name a few.

It is the organizer of City Week, its flagship event which takes place in London every year, in partnership with the City of London Corporation, TheCityUK, the Department of International Trade, etc. City Week is the leading forum for the international financial services community bringing together over 700 delegates from more than 50 countries around the world each year.

The CEO and founder of City & Financial Global Ltd, M. Maurice Button, was kind enough to respond to La Nouvelle Tribune and www.lnt.ma’s questions, on the sidelines of the 2019 edition of City Week, which was held in London’s Guildhall on May 20^th and 21^st. 

La Nouvelle Tribune:
The theme of the 2019 edition of City Week is « FINANCIAL SERVICES AS A DRIVER OF INCLUSIVE GLOBALIZATION ». Why did you choose such a theme?

M. Maurice Button:
The world has entered a phase of deglobalization, protectionism and widespread populism, largely in response to the financial crisis and its impact on the real economy.

This is evidenced by the election of President Trump, BREXIT and the surge in populist, nationalist poiliticians in Europe and elsewhere in the world, such as Brazil.

These political movements have drawn on the support of large parts of society that have begun to feel disenfranchised, ignored and marginalized by, as they perceive it, the political elite. They also feel that the economic benefits of globalization have passed them by and that there is a growing gulf between the rich and the poor.

The only way of countering this rising tide is to reinvent globalization and to make it more inclusive. Hence the theme of this year’s City Week.

How do you reconcile this approach, which puts London at the center of global financial services, with Brexit-related developments? Is the London market still as attractive, and will it still be in the coming months?

London is a global financial centre, not simply a European one. Its time-zone, its well-respected commercial legal system, the advantage of English being the business language of choice globally, the unparalleled nexis of financial skills and expertise to be found in London, the depth of its capital markets, its preeminent position in foreign exchange trading, the size of its asset management and hedge fund industries, the fact that it is home to Lloyd’s of London and is a top centre for international insurance, and the inventiveness and adaptability of the City of London and its financiers, as demonstrated over many centuries – all stand it in good stead for the future.

Furthermore, the centre of gravity of finance and economic growth is shifting inexorably towards the East, particularly China ands South East Asia. The majority of growth in GDP in the decades to come is expected to come from this region. London is well positioned to benefit from this shift and to help finance the growth in the region.

Globalization is essential to financial operations and has contributed greatly to their development. Will it still prevail as we witness it being strongly challenged, particularly in the United States, champions of unilateralism with Mr. Trump, or in several countries in continental Europe?

As mentioned above, we are currently experiencing a push back against globalisation, free trade and the institutions that have supported the world economic order since 1945. Populist politicians have stoked up discontent and promised simplistic solutions to those in society that have felt left behind, marginalized, alienated or simply cheated by income inequality in their countries.

However, there are valid reasons for this discontent and, if globalization, with its enormous capacity to generate wealth and be a force for good in society, is going to regain the ascendancy and win the argument against populist politicians, then it does need to change.
Its proponents need to listen to their critics and to respond. It needs to become much more inclusive and transparent.

The wealth it generates needs to be shared more fairly. In particular, trust needs to be restored in the honesty and integrity of financial institutions. Fair and transparent regulation shoud ensure that the primary purpose of financial institutions is to meet the financing needs of the real economy and consumers.

Numerous topics that will be debated during this edition relate to Europe and the integration and development of financial services. Do you believe that London’s place will remain the heart of financial operations to and from the Old Continent?

Continental Europe does not have well-developed capital markets, which is why European governments and companies have historically come to London to raise capital.

The European Commission is well aware of this and launched the European Capital Markets Union project a few years ago. ECMU was, in fact, the brainchild of Lord Hill, the UK’s then EU Commissioner for Financial Services.

The question is whether ECMU will have much traction and also how long it will take to take shape. The difficulty is that the reason why continental Europe does not have well-developed capital markets is as much to do with cultural preferences as it is deficiencies in market structure or the legal system.

As a result, continental Europe is much more dependent on bank lending, which in turn is constrained by the balance sheets of its banks. For those European governments and companies that want to raise large sums, London’s capital markets are likely to be their first choice for the forseeable future.

What lines of thought could be outlined about the global financial regulation?

There are many topics in global financial regulation that came up during the discussions at this year’s City Week, but one of the most important was operational resilience.

Operational resilience is at the top of most national financial regulators’ agendas, but, surprisingly, there isn’t an international regulatory framework for it in the same way that we have the Basel Accords for banking supervision, IOSCO for the securities and futures markets, the IAIS for insurance, the CPMI for payments and the IASB for accounting standards.

And yet the need is certainly as great, as it is operational resilience that will be the key determinant for how deep the next financial crisis will be, and how fast and how far it will spread.

It is also crucial at a more day to day, micro level in terms of the durability of individual firms and their ability to compete and survive.

Furthermore, it is one of the key safeguards that protects the interests of consumers, investors, employees and the wider stakeholder community.

How should we define operational resilience?
In short, it is the ability of firms, financial market infrastructure companies and the sector itself to prevent, respond to, recover from and learn from operational disruptions of all kinds.

The forms of operational disruption have become more complex and intense in recent years, as the pace of technological change has become more rapid and the cyber environment has become more hostile.

Is green finance now a booming financial field? What are the paths of its upcoming development?

Green finance is set to be one of the dominant themes in finance over coming decades.

Without doubt, the Paris Agreement and the UN Sustainable Development goals have raised international awareness of the financial impact of climate change.

They have also increased collaboration efforts to transition to a low carbon economy, including the growth of green finance.

However, the sector remains comparatively tiny. Moody’s expects global sales of green bonds to be US$200 billion in 2019, after just 6% growth in 2018.

According to a recent discussion paper published by the FCA late last year, 38 green companies had raised US$10 billion in London at that point, including 14 renewable investment funds.

In the retail banking sector, green mortgages have been launched, as well as a number of asset/investment management products.

This is pretty small beer, and certainly won’t go far in terms of saving the planet. But this could be about to change. Regulators across the world have been driving a number of initiatives that could substantially increase the growth in green finance.

At the supranational level, the Financial Stability Board’s (FSB) Taskforce on Climate Related Financial Disclosures (TCFD) has launched an initiative aimed at helping companies quantify the risks associated with climate change, such as the physical effects of climate change on their operations and the impact of new green policies on their business models and their customers.

The TCFD is backed by companies responsible for some $100tn of assets. While it is currently a voluntary initiative, international regulators, such as the Bank of England and the FCA in the UK, are exploring whether it should be a mandatory requirement for financial services firms to report publicly on how they manage climate risks to their customers and operations.

And the FCA is also planning to consult on how all quoted companies, i.e. the large corporate customers of financial institutions, should report to the markets about their climate change risks.

This, in turn, would enable institutional shareholders to factor climate risk into their investment decisions with greater certainty. These enhanced reporting and disclosure requirements on financial institutions and their corporate customers may just be the incentives that are required to scale up green finance.

In order for the green finance market to flourish a further requirement is to agree on common, minimum standards and guiding principles for measuring the performance and impact of green finance products.
Minimum standards and a common taxonomy would enhance investor confidence and trust, thereby stimulating the market.

The EU Commission’s ‘Sustainable Finance Action Plan’, launched last year, seeks to do just this by introducing (a) a taxonomy for what should be considered as an ‘environmentally sustainable economic activity’, (b) new low carbon benchmarks to give investors guidance on their carbon footprints and (c) new disclosure obligations for institutional investors and asset managers.

Taking all the above regulatory initiatives into account, 2019 should see the start of real growth in green finance.

Interview conducted by Ms. Afifa Dassouli, London

The post Against protectionism and widespread populism, we need to reinvent a globalization more inclusive appeared first on La Nouvelle Tribune.

Reflecting on its future, the various threats undermining it, the serious shortcomings plaguing it and its very future itself in light of a series of recent events, is therefore a priority which needs to be rapidly resolved if it is to be given the best possible chance of success.

Indeed, faced with the hollowing out of our country’s industrial landscape over the last decade which has result in the loss of tens of thousands of jobs, we urgently need to consider a number of key factors if we are to provide a pragmatic response to the challenge of unemployment, especially among youngsters.

Donald Trump, a champion of protectionism

First, there is an evident need to strongly promote and orient investment towards industrial projects that provide jobs and ensure a degree of self-sustainability in meeting the country’s needs with a view to reducing the country’s trade deficit.

But there is also a need to preserve at all costs what already exists, that is to say, the existing industrial units that are struggling hard to survive and thrive in an international environment that has become deeply hostile.

This is characterised, in particular, by highly-developed dumping practices as well as the policy of safeguarding national interests by major industrial powerhouses which, to a certain extent, have revived interest in a form of protectionism, despite the WTO’s directives and recommendations.

A number of industries are now impacted, even threatened, by these latest developments, particularly the steel industry, which is the subject of a fierce war waged by major producers as well as by a number of States and their leaders.

One of the most telling examples is unquestionably that of the United States as typified by President Trump’s actions aimed at blocking entry into his country of steel produced in China, Russia, Turkey, Ukraine, Latin America or anywhere else.

These producers, which have been denied access to the US market, are shifting their attention to other regions and countries and are increasingly resorting to dumping measures, targeting those that are perceived as being the weakest.

These countries, like their ‘large’ counterparts, therefore need to preserve their existing units and ensure that local production is, to a certain extent, protected as provide for by the WTO policy’s general safeguard and anti-dumping provisions.

It is well known that the steel market is a global industry but the growth dynamics in terms of global demand and the pace at which new capacity is being installed make it highly cyclical. Since the beginning of the decade, however, the sector has experienced significant overcapacity and many analysts do not envisage a return to equilibrium before 2025.

Given that the steel industry is considered strategic for industrialised countries, the latter began to adopt, as early as 2012, an arsenal of trade defence measures, making it by far the most protected sector in the world.

And low-cost producers, engaging in dumping practices, have seen the major markets in America and Europe shut their doors to their exports. In addition, major industrialised countries have exerted strong pressure on China, obliging it, since 2015, to embark on a closure programme for many steel mills.

And while steel, together with aluminium, was the first product to incur additional duties imposed by the Trump administration, the European Union has acted similarly by imposing provisional safeguard measures on a wide range of steel products. And in both cases, the additional 25% duty came on top of the previous protectionist measures.

Such is the international backdrop against which Morocco’s public policy needs to be analysed, a policy which aims to protect domestic steel production in all its forms.

Morocco’s open-door policy

Given what is happening internationally, it is abundantly clear that Morocco currently has one of the most ‘liberal’ (lax?) policies when it comes to protecting its domestic production as well as being one of the least protected countries within the region among those with steel production capacity.

In fact, for hot-rolled steel for example, only European and Turkish steel incurs an anti-dumping duty of 11%. Imports from other countries which have a free trade agreement with Morocco are exempt all duties. As a result, US exports to Morocco are exempt while Moroccan exports to the US incur duties of 25%. Imports from other countries incur a 10% charge under the Common Customs Tariff system.

As a result, a suitably low-cost Ukrainian exporter will see its cargo taxed at the rate of 10% in Morocco versus 25% in the US, 77% in Canada, 25% + 15% in Mexico, EUR 60 + 25% in Europe and 20% in Iran.

Its Russian ‘counterpart’, equally low-cost, will see its cargo taxed at the following rates, depending on the destination:

Morocco: 10%

US: 25% + 74-185%

Mexico: 21% + 15%

Europe: EUR 96 + 25%

Thailand: 128%

Iran: 20%

South Africa: 20%

India: 10% + minimum price incurred

For a Chinese exporter of cold-rolled steel, the following rates apply:

Morocco: 16%

US: 25% + 266% + 256%

Canada: 92% + 12%

Mexico: 15% + 66% + 103%

Europe: 25% + 20%

It must be understood, however, that, given these rates and international market prices, there is no gain to be had from Morocco protecting an obsolete steel sector with production units below international industry standards.

Indeed, the steel industry is a heavy industry requiring a high level of mastery when it comes to production processes. As a result, to achieve the best possible results, the industry needs to invest in people, leverage its know-how and adopt rigorous production systems.

Today, Morocco can take pride in having industrial flagships that have progressed rapidly along the learning curve while improving performance in line with international standards. For example, at one of Maghreb Steel’s sites, processing costs fell by 20-40% at constant prices between 2014 and 2018 for its various lines.

Furthermore, at Sonasid’s and Maghreb Steel’s steel mills, consumption ratios for the main consumables are lower than the international average.

We’re not suggesting protecting an underperforming industry or adopting a rent-seeking approach but, rather, preserving the Kingdom’s national interests, its industrial fabric and the jobs that it generates.

Mention could be made, for example, of Maghreb Steel, whose past difficulties are well-documented. For more than three years, the steel-maker has been implementing a business recovery plan which has involved restructuring its production facilities with the government’s support. It has also enjoyed a moratorium on its high levels of debt from a number of local banks.

As part of this rescue operation, Maghreb Steel has recruited more than 400 executives and engineers. Their jobs and those of other Group employees would be under threat if the public authorities, which have until now turned a deaf ear to pressure from local lobbies, were to endorse the pro-dumping measures of importers partnering low-cost producers from Central Europe or Russia.

It must also be clearly recognised that, despite its industrial performance, the domestic steel industry remains fragile and is penalised by the country’s limited domestic market.

In this industry, economies of scale are needed to ensure a return on assets. Similar safeguard measures to those adopted by other industrialised countries within the region regarding processed products would allow producers to focus their efforts on their main challenge, which is to expand their market and promote steel usage.

Like the other countries that preceded Morocco in adopting a successful development model focusing on national interests, developing the country’s industrial fabric and its steel industry is something which must be done in parallel, with a long-term vision, government support and the disqualification of unfair competition. Because no country has industrialised without having a strong iron and steel industry!

Neither more nor less than the others!

Morocco’s development model must incorporate its industrial sector if it is to escape the ‘middle-income trap’. And, as mentioned above, the stakes are enormous in terms of jobs, value added and the trade balance, not to mention the social impact and the contribution to economic development from having a strong middle class, with a knock-on effect on other productive sectors.

That is why protectionist mechanisms, as permitted by the WTO, must be maintained to give sufficient time to emerging industries to improve their cost structures and their productivity to be able to build a genuine industrial base, as has been done by every developed country in the past.

Contrary to the allegations and posturing by a handful of importers of steel products which have only their own narrow interests in mind and which demand an end to the safeguard measures for steel, the government must continue to provide provisional and temporary protection. This must be the sole criterion which should be legitimately considered when it comes to the domestic steel sector’s sustainability, as the basis for a global and national industrial development model.

The effective protection that Sonasid has enjoyed in its speciality segment, that of long steel, should continue to be implemented for Maghreb Steel’s flat steel segment, so that the nation’s steel production is sheltered from international predators which know only too well how to activate their local networks at the risk of jeopardising the nation’s successful industrial concerns.

Afifa Dassouli

Original article : https://lnt.ma/secours-siderurgie-nationale-menacee-lobbies-dumping/

The post Help! The nation’s steel-maker under threat from the pro-dumping lobbies! appeared first on La Nouvelle Tribune.

The purpose of this somewhat curt preamble is to make the reader understand that, for our ‘politicians’, there is no sense of urgency since our country’s educational system would appear to be in an excellent state … as can be seen from the high school dropout rates, the tens of thousands of unemployed who wield diplomas that are entirely denigrated and rejected  by potential employers, the massive number of students enrolled in ‘worthless’ faculties such as Law, Social Sciences and the Arts etc. as well as the profound and structural divide in educational provision between the private and public sectors.

Our honourable parliamentarians and the parties – at least some of them – which pull their strings have no obvious remedy to these undisputed realities, which have lasted for years.

Because politicking and demagogical, populist, vote-catching and, lastly, ideological posturing would appear to be far more important than passing legislation that will stand for a number of years about an issue that is so vitally important to Morocco and its future generations!

An alliance of conservatisms

“But where is the problem?” is a question which might be asked by parents who are legitimately concerned for their offspring.

We are told that the problem lies with the choice of the language ​​of instruction, particularly for scientific subjects and with the definition of vocational teaching modules, that is to say, with the linguistic media other than our two official languages, Arabic and Tamazight.

Two major political parties, the PJD, which heads up the parliamentary majority and Istiqlal, which forms part of the opposition, uncompromisingly champion the cause of the Arabic language.

Mr Saad Eddine El Othmani and his friends above all challenge the choice of French for scientific subjects, the language of Molière being for such folk a tool used to adulterate our national identity and for embracing Westernisation and every conceivable (moral) evil that the latter begets.

The PJD, which in any case is unable to radically oppose legislation that has been approved by the Council of Ministers, is engaged in a war of attrition and is fighting a rear-guard action by proposing to substitute the language of Shakespeare for that of Victor Hugo.

A highly improbable endeavour that makes us think of Queen Marie Antoinette who, when faced with the cries and anger of the protesting crowds demanding bread, proposed that they be given cake …

Istiqlal, despite being currently led by Mr Nizar Baraka, a young, open-minded and educated man who speaks a number of languages, is even more radical and uncompromising, challenging foreign language usage, even for scientific disciplines. Instead, the party advocates the ‘Arabisation of knowledge’ and the exclusive use of Arabic rather than French and English for subjects which, the world over, are mainly taught in one or either of these two languages.

Quite evidently, by adopting such a stance, there is more than just a hint of electoral posturing with a strong tinge of populism which, more recently, encompasses a number of political statements (electronic invoicing, common company identifier (ICE), etc.).

But, is it not simply a case of “making a mountain out of a molehill”, as the adage goes.

Because, the root of the problem does not really lie in the choice of language used in vocational training or even the very principle underlying this choice but in our being able to and needing to provide our children with effective and modern cognitive tools, consistent with the demands of globalisation, embracing the wider world and upgrading our educational model in line with international standards.

It is patently clear, however, that the current system has failed, and every Moroccan knows that only too well.

If it were not so, private education, from pre-school to university, would not have grown so rapidly in recent decades.

If it were not so, employers in search of effective human resources that are capable of meeting meet the needs of businesses would not be complaining day and night about the lack of suitable candidates.

If it were not so, the statistics would not reveal such a shortage of Maths and French teachers while young teachers, hurriedly recruited to offset the retirement en masse of senior teachers, would not be putty in the hands of skilled manipulators dispatched by Al Adl Wal Ihssane sympathisers.

If it were not so, the current cultural and linguistic attainment levels of our students would not be what they are today, as poorly developed as their ability to write, express themselves and tear themselves away from the oft-evil clutches of social media!

If it were not so, as can be verified by anyone, the French-speaking sections of this country’s Law faculties would not be overwhelmingly filled by modern languages graduates with very little knowledge of French, but who consider that a language degree offers a better chance of getting a job!

If it were not so, everyone in this country would be eager to recall a remark made by the late King Hassan II, who rightly considered anyone who could speak only one language as illiterate!

Morocco does not figure prominently when it comes to global performance indicators, far from it! One of the major reasons is our education system and the graduates that the latter generates.

And if some remain entrenched in their retrograde, backward-looking and counter-productive positions, it is almost certainly because they are the system’s presumed offspring …

Unfortunately for us all!

Fahd YATA

Original article : https://lnt.ma/enseignement-do-you-speak-arabic/

The post Education, “Do you speak Arabic”? appeared first on La Nouvelle Tribune.

Indeed, in the aftermath of the 2007-2008 financial crisis, Mr Jouahri, its Governor, understood that the traditional role of the institution that he heads up could no longer be limited to containing inflation to avoid a decline in purchasing power.

He therefore introduced a new set of bank refinancing instruments for domestic banks, which, as a result of the crisis, might encounter liquidity shortfalls.

The reason being, was to enable them to continue, in turn, to finance the economy.

At the same time, the Central Bank embarked on a policy of lowering its key interest rate to enable the banking system to offer competitive lending rates for wealth creation.

After four rate cuts, the key rate, known as the ‘base rate,’ has stood at 2.25% since 2017.

Ne varietur!

Expectations by businesses and financial institutions were for BAM’s Board to maintain an accommodative policy to support economic growth.

They again expressed this wish in September and December 2018, after the Central Bank had left its key interest rate unchanged at 2.25%, which it considered an appropriate level given the country’s macroeconomic fundamentals.

In fact, there is widespread belief that, given the current slow rate of GDP growth, BAM could do more to incentivise bank lending with further cuts to its key interest rate.

Adopting an even more accommodative monetary policy would push down lending rates still further and boost the financing of the economy through larger loans.

Indeed, it is clear that non-agricultural economic growth is stabilising at a level that is below its long-term potential. This would appear to be corroborated by the Central Bank’s medium-term forecasts, which are hardly optimistic, and which have not seen any noteworthy changes recently. Inflation is forecast at 1.2% for 2019 and at 1.4% over an eight-quarter timeframe, while bank lending, which has stagnated for several months, is showing signs of weakness.

However, with the benefit of hindsight, the transmission of monetary policy into bank lending is easily discernible, despite the fact that low rates do not automatically impact growth in loans to the economy!

For example, in 2012, banking lending grew by about 10% while the key interest rate was only 3.25%. However, after four consecutive rate cuts, each of 25 basis points, loan growth has not picked-up but, on the contrary, has in fact continued to decline!

Bank lending saw a first deceleration phase towards the end of 2015, slowing to below 1% and has since only slightly recovered with growth currently running at between 1.5% and 3%.

On the other hand, it is clear that the transmission system of monetary policy into bank lending rates has functioned correctly. It can be seen from the trend in bank rates that, since 2012, each time the Central Bank has cut its key interest rate, the effect on lending rates has been almost identical.

In fact, when the base rate was cut by 100 basis points, the overall lending rate went from an average of 6.42% to 5.35%, a drop of 107 points, i.e. an entirely consistent move.

Conversely, is would be reasonable to ask why bank lending does not automatically grow when key interest rates and bank lending rates fall?

The answer is certainly economic since a pick-up in bank lending depends on other factors, the main one being business confidence in the private sector. The fact that, since 2012, public spending has contributed significantly to economic recovery by boosting aggregate demand is evidence of this.

Treasury investment has steadily increased and currently accounts for just over 6% of GDP.

As a result, since 2012, outstanding loans to non-financial public enterprises have spontaneously doubled.

Confidence, confidence, confidence …

By comparison, over the same period, outstanding loans to non-financial private enterprises have declined by MAD 20 billion to MAD 346 billion.

At 31 December 2018, outstanding bank loans stood at MAD 866 billion, a 2.7% year-on-year increase, albeit slightly below the 3.1% rate of growth posted a year earlier.

Every loan category listed in the Central Bank’s statistics (equipment, treasury, real estate and consumer loans) registered weak growth.

More seriously even, in 2018, average outstanding bank loans stood at only MAD 841 billion, an increase of just 2% year-on-year i.e. the weakest rate of growth over the past 20 years.

One thing is clear, which is that growth in bank lending has remained weak for more than six years.

Year-on-year annual growth in bank loans has fluctuated between a peak of 4.6% in 2012 and a trough of 2.2% in 2014.

Since March 2012, the Central Bank has cut its key interest by 25 basis points on four occasions. As we have shown above, the cuts have been fully passed on to borrowing costs without there being any meaningful impact on bank lending!

As a result, the effectiveness of monetary policy cannot be called into question! The question might also to be ask what would have actually happened to bank lending if BAM’s monetary policy had not been so accommodative. Perhaps loan growth might have been even weaker!

And if we look back to 2007, it can be seen that growth in bank lending enjoyed a somewhat euphoric phase which saw the year-on-year annual growth rate exceed 30% when the economy was growing by 6%.

Growth in bank lending was even thought to be excessive as illustrated by the increase in non-performing loans from 4.3% in 2011 to 7.9% in 2016.

As it stands today, the economy has undergone a certain degree of deleveraging as illustrated by the ratio of bank loans to GDP, which has fallen by 10 percentage points from 85% to 75%.

Lastly, if it is confirmed that the current level of bank lending is consistent with non-agricultural growth of between 3% and 3.5%, then loan growth is likely to hit a ceiling at around this level over the next two years.

In the meantime, monetary policy in a low interest rate setting, with no meaningful expansion in bank lending on the horizon, has led to a significant decline in bond yields and has trimmed the investment returns of institutional portfolios, life insurance funds and investment savings, raising a fresh risk of economic deterioration which can only be detrimental to our country’s overall growth!

Afifa Dassouli

Original article : https://lnt.ma/bank-al-maghrib-limites-dune-politique-monetaire-accommodante/

The post Bank Al-Maghrib, the limitations of an accommodative monetary policy appeared first on La Nouvelle Tribune.

But can we genuinely celebrate the anniversary of a regional entity which, apart from a handful of bureaucratic structures filled by career diplomats, only exists in a formal capacity on the paper on which the Constitutive Act of the ‘Treaty of Marrakech’ was drawn up?

While this thirtieth anniversary passed by completely unnoticed by the peoples of the Maghreb, their respective partisan political institutions and the media, the Algerian President, Abdelaziz Bouteflika, alone deemed it worthy to make public and official mention of it, marking the occasion with a message to the King of Morocco, His Majesty Mohammed VI.

The reader will be spared the sickly-sweet convolutions that pepper this text. We will instead focus exclusively on the proposal of Algeria’s Head of State to mark the occasion with a ‘break’, for the purpose of collectively reflecting on how to revive a shared vision for the Maghreb and, consequently, its regional construction.

The Algerian authorities’ deep-seated malaise

A willingness to revive a North African vision is scarcely plausible, however, without definitively settling some essential prerequisites over which the Algerian authorities, with as much diligence as hypocrisy, have taken great care to stall for several decades.

The Arab Maghreb Union is an abortive institution precisely because the Algerian State has never consented, in almost half a century, to stop interfering and end its policy of systematically blocking Morocco’s goal of achieving national and territorial unity.

Algiers, which continues to host, finance, arm and support the mercenary Polisario separatists, is the iniquitous and sole mastermind of a hypocritical policy which consists of doing the exact opposite of its promises, declarations of faith, assurances and formal undertakings!

And it is the President himself, Abdelaziz Bouteflika, who has assumed the principal role, which is to issue pious platitudes on the one hand while pursuing, on the other, his viscerally anti-Moroccan designs!

This double-talk, in reality, reveals the Algerian authorities’ schizophrenic state. There is nothing to indicate that this sad state of affairs, often accompanied by paranoia, will end in the near future.

How could it be otherwise with the Algerian people preparing to go to the polls for presidential elections in which Abdelaziz Bouteflika, 81, affected by a massive stroke since 2013, will run for a fifth term?

Such behaviour is utterly surrealist and inacceptable to any rational and logical mind, so too, the fact that the entourage of a diminished President, who is unable to get about, has difficulty speaking and is isolated in a presidential complex that is as closed as was the Chinese Empire’s Forbidden City, is to impose this state of affairs on millions of our neighbour’s citizens?

Of course, the future of the Algerian people does not concern us directly because it alone is master of its own destiny and any interference in that country’s internal affairs is not permitted.

But is it really a question of ‘interference’ in showing our concern about what is happening in Algeria in the knowledge that, in reality, power has been confiscated by a camarilla dominated by President Bouteflika’s family and supported by the military high command?

Given the fact that we are neighbours as well as fellow members of the Maghreb, we surely have the right to question the consequences of a new presidential term by a man who is barely capable of mastering his thoughts which, in any case, he can no longer express?

In Algeria and across the Algerian diaspora, voices are already expressing their refusal of this latest hoax which is only permitted because the various clans jostling for power still consider that Bouteflika’s candidacy is the only one which, by default, suits them all?

Morocco, standing firm!

Do we, Moroccans, onlookers to this debacle over which Algerian citizens themselves have absolutely no control, still believe that there is any hope left in the Algerian President, a president who, on the one hand, proposes a menopausal or andropausal AMU (each to his own), while, at the same time, engages his Tindouf mercenaries to challenge our sacred national unity in a variety of ways?

In fact, regarding this relationship in which official Algerian discourse acts as a conduit for its intellectual dyslexia, the Kingdom has taken great care to implement policies that are designed to protect its interests and consolidate its territorial integrity.

And, despite the fact that, since the start of the 1970s, obstacles have been systematically put in our way, Algeria has never been able to prevent, at the local level, our national flag from being flown uninterruptedly in our Southern Provinces!

And, given the diplomatic successes across the continent, the growing achievements within the African Union, massive European parliamentary approval for the Morocco-EU agricultural and fisheries accords, allocation by the US Federal Budget of loans for our Southern Provinces that are to be managed and underwritten by Rabat, everything would suggest that the Kingdom is beginning to reap the rewards of its policy of persevering in defending its inalienable rights.

It is impossible to predict where the current Algerian authorities’ decline will lead, as it disappears into the darkness of irrationality and pig-headedness.

But Morocco will not change course and will wait, patiently and determinedly, for the wind to change direction as far as our neighbours are concerned.

So, when President Bouteflika proposes that we take a break, we would suggest that he has a rest…

Fahd YATA

Original article : https://lnt.ma/123-va-lalgerie/

The post Eeny, meeny, miny, moe, in which direction will Algeria go? appeared first on La Nouvelle Tribune.

Originally purchased and restored by Yves Saint Laurent and Pierre Berge in the late 1990’s, the Villa Mabrouka was home to late couturier in the final decades of his life. Both Mr Saint Laurent and Mr Berge had longstanding and profound ties with the Kingdom of Morocco.

A resident of Marrakech, the acclaimed British designer Mr Conran will undoubtedly continue the rich heritage of the property and contribute to the vibrant and cosmopolitan revival of Tangier currently underway.

LNT with press release

The post The Fondation Jardin Majorelle have agreed to the sale of Villa Mabrouka in Tangier appeared first on La Nouvelle Tribune.

She was the first female journalist to enter Mosul with the Iraqi army when it was liberated as well as covering the Arab Spring in Egypt. Despite the risks, she has produced a number of reports and films about Syria and the war raging there since 2011.

We owe a huge debt to Sofia Amara’s brand of meticulous investigative journalism in exposing and denouncing the crimes of Daesh, those of Bashar al-Assad’s regime and of Islamist militias and in raising public awareness and understanding around the entire world about these issues.

She has just written an authoritative book on Daesh’s founder, entitled ‘Baghdadi, the Caliph of Terror, published last October by Stock, a French publisher, which explains Daesh’s origins and the personal story of its chief executioner, Aboubakr Baghdadi.

On visiting Casablanca last December to present this must-read book, she was kind enough to answer, in an all-encompassing and forthright interview, questions put to her by La Nouvelle Tribune.

Fahd YATA

La Nouvelle Tribune:

As it stands, a section of the international press and public opinion considers that the war in Syria is over and that Bashar al-Assad, with his Russian and Iranian allies, is the big winner. It would seem that only a few pockets of Daesh resistance remain in northern Syria. What is your opinion? Do you think that we have now returned to a pre-2011 Syria?

Sofia Amara:

Bashar al-Assad cannot be the big winner because he is not the main player in this conflict! The fact that he has been able to win back a large part of Syrian territory is down to the help and military support from his two allies, Iran and, in particular, Russia. But this has come at a price, a loss of both independence and freedom of choice. But he not been able to engineer a return to the situation as it was before, far from it.

Syria is playing host to not only the Russians and the Iranians but also the Turks and the Americans, without forgetting of course the Kurds, ‘boosted’ by their military victories. Every type of militia and thirty-four factions of the Free Syrian Army still have a presence there.

We also shouldn’t forget about the human cost of this conflict which will likely see Bashar brought before the International Court of Justice at some point in the future.

We will never return to a pre-2011 Syria after this monstrous chapter in Syria’s history, which Bashar imposed on his country and his people. Syria has been completely destroyed, millions of citizens are now exiled, foreign forces, both friendly and enemy, are encamped on its soil and the civil war has above all caused considerable damage to Syrian society.

And how can he regard himself or claim to be the winner when a large section of the international community considers him to be a war criminal?

But can’t the virtual disappearance of Daesh as a State that was partially established on Syrian territory and which, more or less, was the main adversary, be considered a victory for Bashar al-Assad’s regime?

Absolutely not! Of course, that’s Assad’s theory and he desperately wants public opinion to believe it. But it’s wrong. The Damascus regime’s main opponent is the Syrian Democrats, whom he threw into jail, tortured or killed in their hundreds of thousands while, at the same time, freeing jihadists from his jails in order to discredit the peaceful revolt of 2011. Daesh was not the Syrian regime’s adversary but its instrument, its ally, for pragmatic reasons. The terrorist organisation was neutralised when it no longer served any purpose, rather than the other way around.

But where are these Syrian Democrats? Can they be regarded as a credible alternative to the current Syrian regime?

They are everywhere, in Scandinavian countries, in France, in Canada, in Lebanon … They are fighting for a democratic Syria and they will surely end up getting one someday.

For them, the enemy is both Bashar and Daesh. They had to fight two enemies at the same time. With the emergence of the second, Daesh, there was no room left for the alternative that they intended to establish. Bashar al-Assad’s bet was “either me or chaos”! And he generated this chaos, in the ruins of which all contradictory voices were buried.

Assad is not of course Daesh’s only ‘sponsor’. This organisation’s precursor was established on Iraqi soil in 2006 following the US invasion of Iraq and the collapse of Saddam Hussein’s regime three years earlier.  But Bashar al-Assad’s strategy, to confront the challenge posed by his own people, was to stir up this jihadi monster.

On that basis, do you think that the United States is partially responsible for triggering the civil war in Syria itself?

No. It is worth remembering that this civil war only broke out after months of bloody repression by the Syrian regime of what had been a peaceful revolt. The Americans are neither responsible for this protest movement nor for the fact that it degenerated into a fratricidal conflict.

American responsibility lies elsewhere.

In 2001, the United States did not have a go at its Saudi ally despite the fact that the majority of the 9/11 terrorists were Saudi citizens. Instead, they preferred to attack bin Laden’s Afghanistan before invading Iraq in 2003 on the false pretext that Iraq possessed weapons of mass destruction.

The invasion placed an avenging Shia power as head of the country and saw the Iraqi army dismantled, consequently replaced by unlawful militias. During the occupation, the worst possible abuses were committed by American troops as well as by Iraq’s new masters. These included arbitrary arrests, humiliating acts, acts of torture, assassinations … as revealed in the various testimonies on the conditions of internment in Abu Ghraib prison.

America’s primary responsibility lies in the fact that it fostered an environment that was conducive for the Islamic State of Iraq, Daesh’s ancestor, to emerge.

It was Bashar al-Assad, in particular, who subsequently took up the cause, fuelling the war in Iraq. Not out of friendship for the Iraqis or Arab nationalism but out of pure calculation.

The Syrian regime thus recruited, trained and armed jihadists on its soil, before injecting them into the Iraqi quagmire.

At the time, Bashar al-Assad’s calculation was simple – he needed to complicate the task faced by the American occupier in Iraq, so as to dissuade it from attacking Syria.

Bloody jihadist attacks, which saw US soldiers killed as well as hundreds of civilians in Iraq, were planned in Syria under Syrian leadership.

This policy ended when Bashar al-Assad was obliged, under pressure from Washington and, in particular, the then Secretary of State, Colin Powell, to jail jihadists returning to Syria, after being driven out of Iraq by the latter’s Sunni Iraqi, supported by the US military.

These jihadists were detained in the infamous Saydnaya prison near Damascus, where they behaved as if they were actual leaders, enjoying their jailers’ favour, while the Syrian Democrats were humiliated, beaten, tortured and put to death in the same prison, qualified by Amnesty International as a ‘human slaughterhouse’.

The terrorists were then released from Saydnaya by Bashar al-Assad in 2011 so as to jihadize the Syrian revolt.

The Americans’ second responsibility lay in Obama’s climb-down in the wake of the chemical weapons attack on the suburbs of Damascus in 2013.

The United States had been a ‘passive spectator’ in this war, doing little more than reiterating the fact that the use of these prohibited weapons was a red line that the Assad regime must not cross.

Despite the summer 2013 attack, however, Obama decided not to punish Damascus.

A blank cheque for Assad. And one of the reasons why more moderate rebels fled into the extremists’ arms.

How was Daesh financed?

Daesh was able to generate the USD 2 million that it needed for its daily operations by engaging in profitable trafficking activities – the trafficking of oil, antiquities and human beings. Girls from the Yezidi minority were sold for 10,000 euros or more, if they were virgins.

There was also cotton production in the Syrian provinces of Deir Ez-Zor and Raqqa.

In addition, taxes were imposed by Daesh on the people then living under its yoke. Everyone had to pay – ordinary citizens, small businesses, drivers transporting goods … Even Lafarge Group is suspected of having financed the Islamic State to be able to continue running one of its factories in Syria.

And we also shouldn’t forget the looting of banks in Daesh-controlled regions.

What has been the role of the Gulf states in the civil war in Syria?

They helped ‘Islamise’ the Syrian revolution.

Military aid from the West to moderate rebels, mainly the Free Syrian Army, was insufficient.

Sometimes, this Western aid even ended up, via Qatar, in the hands of extremist factions.

In addition, countries such as Kuwait, Saudi Arabia and Qatar (individuals, NGOs and governments) provided support to FSA brigades and, taking advantage of the lack of aid from the West, Islamised them.

That said, the most dangerous of these organisations, Daesh, did not simply rely on Gulf donations in order to function. These donations were marginal by comparison with the colossal sums that the Islamic State was able to garner.

Why did the Arab Spring of 2011 occur simultaneously in Tunisia, Egypt, Libya, Syria, Bahrain, Morocco …

A number of uprisings failed while others succeeded. A particular theory often expounded, no doubt dear to the ‘conspiracy theorists’, is that the Arab Spring was in fact the realisation of Obama’s speech in 2009, which set out the American vision of democracy for the Arab world. This vision was also seen to be reaching out to Islamists such as the Muslim Brotherhood.

The protest movements of the Arab Spring can be seen as a rejection of ‘hogra’ (meaning, a sense of contempt shown by the State with regard to its people). Inspired by the success of the Tunisian revolt, Arab peoples living under dictatorships or authoritarian regimes felt insulted that they were deemed incapable of rising up, albeit belatedly, to demand democracy.

There was clearly a domino effect. Furthermore, to suggest that it was remote-controlled from abroad totally belied the actual facts on the ground.

I covered this revolt and was jailed in Cairo on two occasions alongside the activists who initiated the protest.

It was the April 6 Youth Movement which called on protesters to demonstrate in Cairo’s Tahrir Square on 25 January 2011, Egypt’s National Police Day. It was meant to be a simple demonstration, a dry-run prior to a more widespread demonstration which it intended to organise for the elections scheduled for late 2011.

But success was achieved so quickly thanks to social media and Mubarak was deposed in just 17 days. And when Hillary Clinton went to Cairo after the fall of the Egyptian president, the April 6 Movement refused to see her, blaming the Americans for supporting Mubarak to the end.

Egypt’s Muslim Brotherhood had watched this mobilisation with suspicion, even hostility. But it was achieved without them.

But wasn’t it the Islamists who, in the first instance, benefited from the Arab Spring?

In Egypt and Syria, it was the Muslim Brotherhood, in Tunisia, Ennahda, and even in Morocco with Al Adl Wal Ihssane and the PJD, etc.

You ask the question the wrong way around. It doesn’t matter who benefited. What matters is whether these parties were democratically elected. And then, of course, we need to ask ourselves why these people voted for Islamists; and how to steer this Islamised electorate into excluding religion from politics once and for all.

Admittedly, the peoples of the Arab region are all ‘Islamised’ but this does not explain the electoral victories, unless of course these movements were actively supported, encouraged and financed; because political power can never be attained without financial resources.

Islamist movements, particularly in Tunisia and Egypt, which suddenly came out of hiding, quickly won the popular vote …

But that’s not the problem. Parties have the right to finance their political action. What the public needs to know, however, is whether these financial arrangements were legal or not, internal or foreign. It is incumbent upon the judicial system, another pillar of the rule of law, to decide.

Except, the people voted for the Islamists because they had been Islamised. Some voters did not care much about the name of the party or candidate they voted for as long as he was an Islamist.

Lastly, the example of Egypt, the birthplace of the Muslim Brotherhood, that you mention, does not provide any evidence.

Secrecy has never been an obstacle to political or military victory, quite the contrary! It is in hiding that the Khomeini Cassette Tape Revolution took place. It is in secrecy that Baghdadi prepared the conquest of his self-proclaimed caliphate.

Sadly, the aftermath of the Arab Spring has provided little benefit to the peoples who started it.

Libya no longer exists, Syria is destroyed, Iraq is torn between Sunnis, Shiites and Kurds and Egypt is back in the hands of the army.

In what state is today’s Arab world?

Do you not think that Spring has turned into Winter? What are the lessons you have learnt, as an expert?

The Arab winter is an easy and deceptive allegory. Democratisation is a long process. We cannot judge history while we are still living in the present!

Of course, chaos currently reigns. People’s situations have taken a backward step. But need we consider that the Arab Spring has been of no use?

First, the most worrisome conclusion that I draw does not relate to the Arab world but to the powerful countries which have shown that the international community no longer exists.

Instead, there are crisis managers who act on the basis of their own interests which often change and are sometimes poorly calculated.

The Security Council is inoperative. Bloody-thirsty dictators still find backers in the West and chemical weapons are used without any reaction.

The so-called ‘free’ world has thrown in the towel.

In Iraq and Syria, Daesh managed to capture a territory as vast as Britain and it took more than three years to dislodge it …

The Arab world has certainly taken a backward step, underlining the high level of political immaturity in many cases.

Four dictators have been toppled, however.

Impunity is a thing of the past, in my opinion. It’s clearly not the optimal solution but it is already miraculous because there has been an enormous lead weight burdening Arab countries since the end of colonisation. Something had to give!

We’ve taken a backward step? It’s not surprising! But does it justify maintaining dictatorships? Ask those Syrians who lost their parents, their children, their homes if they regret their revolution. Many continue to say that “it was needed”!

And I would add that the more we delay the democratisation process in the Arab world, the more expensive it will be at the check-out till.

Are there currently any democratic forces within the Arab world that are capable of instilling and realising this sense of hope, when the majority of elites have fled their countries and unable to lead a revolution from abroad?

They will come back. General de Gaulle was abroad in London when the Nazis were in Paris. It doesn’t mean anything.

Syrian Democrats are in exile because they risk death if they return home. And then, we have to start somewhere.

Societies that have lived under dictatorship for decades, deprived of democratic norms, have done whatever they could.

In Syria, for example, despite 40 years under the Assads, the opposition has managed, through the Syrian National Council, to produce a credible alternative, made up of researchers, sociologists, women, Christians … They have done everything to prove that they were genuine democrats, worthy of taking over; but they have been side-lined by extremism due to inadequate Western action.

Finally, to conclude this very comprehensive interview, what do you think of Donald Trump’s Arab policy? The rules have gone out of the window, multilateralism has been blown to pieces with the American president preferring a bilateral approach.

And the key components of his Arab policy are poorly understood. We feel that, in reality, it is very erratic.

On the one hand, he supports democracy; on the other, he accommodates Assad and Russian support in Damascus. He has also done his best to exonerate the Saudi Crown Prince of the accusations brought against the latter after the murder of the journalist Jamal Khashoggi inside the Saudi consulate in Istanbul …

Donald Trump doesn’t have a Middle East policy. It’s non-politics!

Before he took office, three pillars underpinned this policy – oil, Israel’s security and the fight against Islamic terrorism.

These are America’s main concerns in respect of the Arab world.

This still holds true under Trump, but with two new features.

On the one hand, a heavy dose of political cynicism which at least has the benefit of frankness. Ignoring the heinous crime perpetrated against the Saudi journalist is one of the latest examples of it.

European countries are getting on with it or are trying to make the necessary adjustments wherever they can, despite the general cacophony. As far as Arab States are concerned, they are completely off the radar and should ask themselves why, instead of systematically accusing the West for all their ills.

On the other hand, Trump displays a worryingly high level of ignorance about the region and shows no inclination to be advised by competent experts.

The American President would appear to function on an ad hoc basis, as though driven purely by impulse.

When confronted by the intolerable images of the Syrian victims of Khan Shaykhun’s chemical attack, Trump was clearly overwhelmed and decided to hit back at Syria.

A serious act, which he implemented over small-talk during a dinner with his Chinese counterpart, Xi Jinping.

When interviewed by Fox News, he mentioned that he was “enjoying the most beautiful piece of chocolate cake” with his Chinese guest when he told him that he had just ordered the bombing of Syria. And during the interview, Trump even mistakenly confused the target country, confusing Iraq with Syria.

And the Syrian adventure stopped there.

Tomorrow, if someone convinced him that Assad was an infallible bulwark against Daesh, then he would likely visit him in Damascus!

For him, the last one to speak is right.

Interview by Fahd YATA

* Sofia Amara is an international reporter and producer of award-winning documentaries such as ‘The Lost children of the Caliphate’, which was awarded the AMADE Prize at the Monte-Carlo TV Festival, as well as the author of ‘Infiltrator into Syria’s hell on earth’ (Stock).

NB: This interview was conducted a few days before President Donald Trump’s decision to withdraw US troops from Syria.

‘Baghdadi, the Caliph of Terror’, by Sofia Amara

‘Baghdadi, the Caliph of Terror’, published by Stock, October 2018

Abu Bakr al-Baghdadi is something of an enigma. Is the most wanted man in the world still alive?

Where is he? Who is he really? What does the Caliph of Terror want to bequeath? What will be his legacy, the infamous Daesh brand?

He managed to create a Jihadistan, attracting fighters from all over the planet. He exported his model of terror to the heart of the free world. He is the perpetrator of a number of bloody terrorist attacks across our cities.

But the ghost with the black turban, who has a $25 million ‘Wanted’ tag on his head, is nowhere to be found.

(Editor’s note)

Recommended reading or viewing:

http://www.editions-stock.fr/livres/essais-documents/baghdadi-calife-de-la-terreur-9782234084919

Show reel: https://vimeo.com/58384452

Latest:
‘The Lost Children of the Caliphate’, Envoyé spécial/France 2 https://www.dailymotion.com/video/x6lw28x

‘Baghdadi, the Caliph of Terror’

Link: https://vimeo.com/212600399

Original article : https://lnt.ma/ny-a-de-politique-arabe-de-donald-trump-cest-de-non-politique-entretien-journaliste-realisatrice-sofia-amara/

The post “Donald Trump doesn’t have a Middle East policy. It’s non-politics!” Interview with journalist and producer Sofia Amara appeared first on La Nouvelle Tribune.

Indeed, Extraordinary General Meetings were held by Salafin and Taslif on the final day of 2018 to approve an equity issue reserved for Taslif’s shareholders and complete the merger between the two companies with Salafin acquiring Taslif and, in the process, deciding to keep its corporate name.

It is worth recalling that the merger of the two consumer credit companies, announced in January 2018, could have been completed much more quickly and certainly in less than the one-year period which had elapsed between announcing the deal and its completion.

And with good reason. A deal had been struck between Taslif, a Saham Assurance subsidiary, with Moulay Hafid El Alami and Said El Alj as shareholders, and Chairman Othman Benjelloun’s group.

This consisted of selling Taslif to Salafin, with the latter legally acquiring the former, without requiring any other authorisation or the need to consult the market.

And all the more so given the fact that the merger terms had been fixed and the deal price set at 24 DH per share on the open market.

Which meant that Taslif’s retail shareholders still had until 28 December to either sell their Taslif shares on the open market or wait to convert them into Salafin shares.

However, the sale of Saham Finances and therefore of its Saham Assurance subsidiary, Taslif’s majority shareholder to SEM, a South African company, resulted in a change in Taslif’s reference shareholder with Sanlam becoming, directly or indirectly, the majority shareholder.

As a result, Bank Al-Maghrib had to give its consent and approval to SEM becoming Taslif’s majority shareholder.

SEM was required to make a public offer to buy out minority shareholders.

This was followed by an application for Sanlam to be authorised as a finance company and an AMMC visa application for a Taslif takeover bid, not to mention Salafin’s visa application for an equity issue which was, however, inescapable.

Thus, a takeover bid for Taslif’s shares and rights was launched by SEM Ireland, Saham Finances, Saham SA, Saham Finances Participations, Saham Assurance, Sanam Holding and Mr. Said Alj, each being a direct or indirect shareholder in Taslif.

This takeover bid, whose details were outlined in a formal prospectus approved by the AMMC 4 October 4, was held 11-17 December.

It is worth specifying that that the offer was for 1,556,911 Taslif shares i.e. 7.25% of the company’s share capital at a price of MAD 24 per share.

The Stock Exchange published the results of this consultation Monday 24 December.

1,049,813 Taslif shares were tendered, representing 4.89% of the share capital.

38 shareholders thus sold their shares prior to the merger with Salafin, i.e. 67.43% of the offer.

A small holding of less than 4% owned by CDG accounted for a large portion of these shares.

The cost of this takeover bid to Sanlam Emerging Markets, for which it was responsible as TASLIF’s majority shareholder, amounted to more than MAD 25 million …

In addition, 17 December, the Moroccan Capital Markets Authority (AMMC) approved the prospectus in relation to Salafin’s equity issue in respect of the Taslif acquisition.

This issue was exclusively reserved for Taslif’s existing shareholders, modified somewhat by the results of the takeover bid, with the reference shareholder bolstered by some 5%.

The equity issue consisted of 550,577 shares, issued on the basis of precise terms of exchange.

In fact, the chosen exchange ratio was one SALAFIN share for 39 TASLIF shares.

In other words, based on the price of one TASLIF share being 24 DH, the price of one SALAFIN share was 936 DH.

The total size of the equity issue in question, including the issue premium, of course, and on the basis of a 100 DH nominal value, amounted to MAD 515,340 million.

This equity issue, aimed at attracting new shareholders within Salafin’s ownership structure, was put before Salafin and Taslif’s shareholders for their approval at EGMs held Monday 31 December 2018.

It was these two transactions that delayed the merger of these two finance companies, to the point that the EGMs had to be held on the deadline date of 31 December 2018, which could not be delayed any linger given the size of the merger in question and due to the aggravating legal circumstance of it being backdated to 1 January 2018, in accordance with the agreement signed between Taslif’s sellers and acquirers.

Taslif is therefore going to be delisted in favour of a new Salafin, bolstered not only with the assets and staff of the acquired company but with its customers and partners.

But Sanlam Emerging Markets, Taslif’s previous owner, has not finished with rearranging its operations in Morocco.

In fact, it expects to launch another takeover bid, on Saham Assurance, whose prospectus is due to be approved by the AMMC very shortly and which outlines the terms governing its acquisition of Saham Finances.

Afifa Dassouli

Original article : https://lnt.ma/details-de-lacte-final-de-labsorption-de-taslif-salafin/

The post Details of the final chapter of SALAFIN’s acquisition of TASLIF appeared first on La Nouvelle Tribune.

Not a single day has gone by since that fateful Monday 17^th December without Algerian hacks shamelessly rejoicing in this barbaric act, taking advantage of this tragedy to stigmatise Morocco and Moroccans, portraying them, from first to last, as supporters or active members of Islamist terrorism.

The scavengers …

Quoting an article from the sleazy Sun newspaper, London’s best-known gutter-press publication, the Algerian newspapers, in every language, have endeavoured to demonstrate to their readers that Morocco is not a safe country and that the vast majority of Daesh terrorists in Syria are of Moroccan origin.

Not satisfied with simply doing their dirty work of twisting the facts, the press of our Eastern neighbour has been cooing with pleasure and has been making such a big deal of announcing that our tourism industry will be affected, that the Kingdom will slide further into crisis, that foreigners will quickly desert the Kingdom or now will no longer go there.

According to these ‘vulture’ publications, European capitals are under threat from Moroccan terrorists affiliated to Daesh and Spain, with whom Morocco enjoys high-quality relations when it comes to security, is the country most at risk.

These articles from the neighbouring press are inadmissible, unacceptable and nothing short of scurrilous!

A case of the pot calling the kettle black

By behaving in such a way, the Algerian press has blatantly violated journalism’s professional code of ethics in making outrageous and systematic accusations and by ignoring the essential and fundamental requirement which is to reject any form of terrorism, regardless of where it occurs.

Admittedly, the Moroccan press generally tends to be hard on the Algerian regime but no one in Morocco ever dared glorify the Islamist armed groups that sowed terror in Algeria between 1998 and 2004, which resulted in more than 200,000 dead and missing during that civil war!

More recently, when AQIM terrorists led by Mokhtar The One-Eyed took dozens of people hostage at the BP-Sonatrach gas plant in Ain Amenas in January 2013, the Moroccan press did not seize upon this opportunity to stigmatise Algeria and its people.

Because, as far as we are concerned, the death of 40 employees of ten different nationalities is not an occasion to rejoice in such a tragedy.

We will be sure to look into the causes and reasons for such an outrageously anti-Moroccan attitude.

Algerian journalists, whom we have the decency to call our ‘peers’, are surely not ignorant of the fact that the knee-jerk reaction to any terrorist act perpetrated in any one North African country is, simplistically and harmfully, to lump together all other countries within the entire region.

All in the same boat!

The consequence of an attack in the Aurès Mountains in Algeria, a clash with armed Islamists near Mount Chaambi in Tunisia, a double murder in Imlil is that every North Africa state is stigmatised, blamed and blacklisted by a section of the Western press, reinforcing among European public opinion (in particular) the false but long-held conviction that these countries are plagued by insecurity and instability.

In addition, by behaving in this way, the Algerian press is doing its very best to discredit Algiers’ official line which states that terrorism and armed groups are no longer operational in that country.

But, above all, to take such devilish pleasure in the misfortune of others, to take advantage of a horrible terrorist murder in order to attack a neighbouring state and a sister nation, is despicable, filthy, petty and vile!

Given the context, it is worth recalling the words of President François Mitterrand, who denounced the attitude of the French press whom he held responsible for the suicide of former Prime Minister Pierre Bérégovoy 1 May 1993:

“There can be no justifiable explanation for feeding a man’s honour to the hounds…”.

Allow us to adapt this verdict and write: “There can be no justifiable explanation for feeding the honour of a country and its people to the jackals and hyenas…”.

Fahd YATA

Original article : https://lnt.ma/presse-les-chiens/

The post Hurry, the hounds… appeared first on La Nouvelle Tribune.

Of course! The public offering went well, especially given the rather gloomy stock market conditions that we are currently experiencing and the backdrop of sluggish growth for the domestic economy!

Last September, Mutandis’ Supervisory Board decided to go ahead with this IPO in the belief that the stars would never be perfectly aligned, nor would there be a more opportune moment from a stock market perspective. The fact that our company was to be listed for the long term, it was important that the IPO price was attractive.

And what we proposed was an attractive 180 dirhams a share, a 19% discount to the company’s ‘fair value’ of more than 220 DH.

In addition, Mutandis is paying a decent dividend of 7.5 DH for a par value of 100 DH. We also decided to give the new shares entitlement from early 2018, enabling the new shareholders to benefit from the 2018 dividend even though they only joined us in December.

I would like to emphasise that the dividend is an integral part of the stock’s overall performance.

The dividend is not simply the icing on the cake!

By comparison with the expected return from the Casablanca stock market of around 9.3% annually (3.3% for the risk-free rate of return plus a 6% risk premium), Mutandis’ 4.2% dividend on its IPO valuation is already halfway to equalling this expected return.

So, the size of the dividend is already a good start!

The deal enabled us to raise MAD 1 billion for MAD 400 million offered, despite our road show only lasting for two weeks.

And there was a good reason for that. We did not obtain the AMMC visa until 16 November and we had to close the deal before 18 December since foreign investors are not able to settle beyond 21 December due to their Christmas break.

So, by counting backwards, the subscription period had to be between 3 and 7 December to allow the Stock Exchange ten days for recounts, allocations and attributions, prior to posting the results of the public offering.

Despite all this, the deal was a great success, being 2.5 times oversubscribed.

What was the breakdown of subscriber applications?

It is better to analyse it by investor type, knowing that applicants could subscribe for different tranches.

As a result, 54% of demand was from Moroccan institutional investors, 23% from retail investors and foreign institutional investors 23%.

It is also important to mention that Mutandis attracted 3,200 retail investors compared to about 1,300 for Immorente, 2,900 for Total and 1,900 for AFMA.

Of the last 4 public offerings (excluding Marsa Maroc’s privatisation), Mutandis has attracted the largest number of retail investors.

I personally attribute this success to our products’ simplicity. People have a perfect understanding of what we manufacture because they use our products on a daily basis.

The way in which we structured the different tranches was a technical arrangement to be able to allocate a significant portion to foreign investors who, should their allocation have been scaled back, would not have subscribed, preferring instead to purchase the shares at a later date on the open market.

But we wanted foreigners to participate in this IPO, in the same way as, in concertation with the AMMC, we wanted to attract retail investors.

And so, to ensure that their needs were met, they were allocated a specific tranche (Tranche III) with two requirements: a MAD 10 million minimum subscription and a 3-month ‘lock-up’ period.

This worked well and the allotment ratio for Tranche III was 76% compared to only 34% for Tranche II (Moroccan institutions investing more than MAD 10 million with a 3-month lock-up period) and 36% for the general public (Tranche I).

What does the post-IPO capital structure look like?

Mutandis’ stable (‘hard core’) group of shareholders account for 34% of its capital in the wake of this equity offering.

These shareholders include Adil Douiri, Label’Vie, the FinanceCom Group subsidiaries and Améthis.

It is worth mentioning that Mr Douiri and Rothschild Group’s Amethis Finance subscribed to the IPO so as not to be diluted.

The second third of the capital is held by long-standing shareholders which currently total just under 60, a number that has grown steadily in the wake of successive equity offerings since 2008.

The final third of the capital belongs to new shareholders which invested in this IPO with new foreign investors accounting for 8%.

But these last two shareholder categories should be considered as comprising Mutandis’ free float.

So, 65% of Mutandis’ capital listed on the Casablanca Stock Exchange comprises its free float?

Indeed, whilst it’s something of a novelty in Morocco for a company to be governed by a minority shareholder, it is, however, more common in more developed stock markets.

Assuming that a properly listed company must be sufficiently liquid to allow as many buy and sell transactions as possible, the share price will then reflect the company’s actual value.

For a society to be liquid and for its shares to be tradeable, it must have an adequate free float in dirhams; in Mutandis’ case, 65% of the free float equates to a MAD 1 billion free float.

There is no relationship, however, between having a sufficient free float and the upward or downward movement in the company’s share price. A sufficient free float simply ensures that a stock market price reflects market expectations.

It also ensures that foreign investors are not discouraged in advance by concerns about liquidity and will invest in the stock.

It is worth noting that on the Casablanca Stock Exchange, there is a free float-weighted index in which Mutandis is ranked around 20^th out of the 75 companies listed in terms of liquidity, while in market capitalisation terms i.e. its overall value, the company is ranked 40^th.

But one must also be aware that within this free float, there is some ‘false free float’ i.e. core portfolio holdings held by Moroccan institutional investors which, after bidding for MAD 540 million of the MAD 1 billion raised, were allocated about MAD 200 million.

They are known to be medium and long-term income investors who are remunerated through the dividend yield.

Mr Douiri, please would you explain to our readers why you chose the legal form of a limited partnership?

A limited partnership is a legal form which reconciles two generally irreconcilable goals, on the one hand, engaging in a series of equity issues so as to grow the company quickly and, on the other, ensuring stable governance. Moroccan limited companies often have an owner who owns at least 51% shareholder of the equity and has a controlling interest.

The result is that this shareholder, so as not to lose control, restrains or even slows the company’s growth.

In Mutandis’ case, because of its legal form, the company has grown rapidly without its founder needing to inject more capital. This has been achieved by increasing the number of partners (shareholders) and their contributions.

The limited partnership structure enables the company to achieve its goal of rapid growth through regular capital calls.

It is worth noting that a partnership structure is widely used in English-speaking countries where the ‘limited partners’ are the sponsors and the ‘general partners’ are the sponsored/ managers.

US Real Estate Investment Trusts, for example, are more often than not publicly traded limited partnerships.

In France, a number of very large companies are limited partnerships such as Michelin, global leader in tyres, whose general partner is the Michelin family, with the latter owning only a small percentage of the company’s equity.

Lagardère, which owns Hachette, and which heads up a number of media firms, is also a limited partnership that is publicly traded on the Paris Stock Exchange.

I recommend this legal form for Moroccan entrepreneurs wishing to expand, just like the Michelin and Lagardère families, who founded wonderful groups.

In what way has the limited partnership which you founded in 2007 managed to develop its brand portfolio?

I recall that we started with 15 shareholders and, just before the IPO, there were 60 of us. That’s how we were able to make a series of acquisitions!

And that is how Mutandis was able to buy brands such as Maxis from Lesieur or Marrakesh from Citruma-Delassus as well as sound family-owned companies that were no long wanted by the heirs as well as others in difficulty.

Then, from consumer goods, we moved into consumer durables when we acquired the exclusive importer of the SEAT and Honda brands.

Prior to the equity offering, however, to streamline and simplify our businesses, the Mutandis Board decided to split our limited partnership into two entities, while retaining the general partners of each entity.

On one side, Mutandis now encompasses the consumer goods businesses while the other is focused on consumer durables, with only the former listed on the stock market.

Please would you say something about the business activities of the listed Mutandis and their stage of development?

Mutandis has four product lines – detergents, seafood products, bottles and caps for beverages and fruit juices.

They are each at a different stage of their development.

The fruit juice business is the least mature of our businesses and is really in a start-up phase.

This business, which ranges from recipes to packaging, is a new venture for us. We acquired the business in February 2017 and have completely transformed it. It has just been relaunched in its new form in May 2018. We are acquiring experience in marketing our products via our distribution trucks which group together many of our products, distributing them to grocers who account for 80% of retailers in Morocco and who are our main customers.

The second business is seafood, acquired in January 2016. It is currently being overhauled and transformed. It is undergoing a shift on the marketing side, which consists of gradually changing our customer base in favour of countries where margins and sales prices are higher like Morocco, Saudi Arabia, Europe or the United States, as opposed to sub-Saharan Africa, where purchasing power is lower, especially given the fact that fish is an increasingly rare commodity around the world.

The detergents business has already been transformed and is now in a somewhat linear growth phase with new lines being added as well as trucks distributing to grocers.

Our production facilities in Berrichid consist of one factory for powder and another for liquids.

The final business activity, which is the most mature, is bottles and caps, which has seen relatively smooth growth since 2010, consistent with the expansion of Morocco’s beverages industry.

Mr Douiri, what message would you like to convey in conclusion?

First, it is important for our country that our entrepreneurs are ambitious and have a desire to succeed.

Second, to be able to generate uninterrupted growth, one must have a solid capital base and one must not restrict the quantity of capital to the depth of one’s owns pockets.

Third, to achieve this, one needs to identify the most appropriate legal set-up for the company to satisfy one’s ambitions.

And fourth, it is very important to surround oneself with the best possible human resources, by choosing people who can demonstrate that they have the necessary hands-on skills, who roll up their sleeves, go into the factories and work hard to grow the business.

These are the principles and values ​​that have guided Mutandis for the past 10 years. And, as we promised the market, we will continue to grow these businesses as a small Unilever, a small Nestlé …

Interview conducted by Afifa Dassouli

Mutandis’ financial results

The limited partnership houses common functions such as General Management and the Finance and Administration Department while business operations are carried out by subsidiaries. It is a group holding company which receives dividends.

As far as the company’s 2018 consolidated financial results are concerned, gross operating income, which is the operating margin, is likely to be around MAD 183 million.

The detergents business is expected to be the largest contributor, accounting for MAD 82 million of the total MAD 183 million, followed by seafood products with MAD 63 million, bottles MAD 45 million and fruit juice MAD 4 million.

These results are all up compared to 2017.

Forecasts for 2018 turnover are as follows: MAD 564 million for detergents, MAD 489 for seafood products, MAD 245 million for bottles and about MAD 60 million for fruit juices.

A.D

Public offering results breakdown:

The MAD 215 million raised from the public offering will be primarily used to build new factories.

This sum will enable the company to raise debt, the MAD 215 of capital generating MAD 300 million of additional investment capacity which will be allocated to additional factories.

The Group needs to launch other types of hygiene product because it covers only 65% ​​of the categories available on the Moroccan market.

Mutandis therefore intends to set up new turnkey plants, one for hygiene products, another to process seafood products and one for bottling and caps because the existing unit has reached maximum capacity.

All these units will be launched in the near future.

It is worth noting that Mutandis’ debt stands at 40% of its liabilities versus 60% of shareholders’ equity.

The company’s liability structure has been stable for several years.

A.D

Original article : https://lnt.ma/entretien-m-adil-douiri-fondateur-de-mutandis-apres-lintroduction-bourse-tres-reussie-de-lentreprise/

The post Interview with Mr Adil Douiri, founder of Mutandis, following the company’s very successful IPO appeared first on La Nouvelle Tribune.

Very quickly, no doubt, the security authorities took matters into their own hands and in less than forty-eight hours, four suspects were arrested.

Individuals who, according to judicial sources, had pledged allegiance to Daesh several days prior to committing their horrible crime.

A few hours later, the Central Bureau of Judicial Investigation (BCIJ) arrested nine other people in relation to the suspects.

The consequences of these ignominious acts perpetrated by savage and basically illiterate brutes, as confirmed by their curricula vitae, will unfortunately be terrible for our country, its image abroad, tourism in general and, in particular, visitors to Marrakech and its region.

These terrorist murders have provided the international media, the television channels, with ample material. The Kingdom, through no fault of its own, once again finds itself categorised alongside unsafe, dangerous and blacklisted countries.

The tourism industry, which was doing better, without the Ministry of Tourism realising it, will undeniably be affected by this heinous act. It is feared that the performance of the sector will suffer over the coming weeks and months.

Notwithstanding the fact that these alleged assassins will most certainly be sentenced to the maximum penalty, one cannot help wondering about the causes and responsibilities that led to this terrible event.

Indeed, it would be entirely inappropriate to question the efficiency of the security forces and the latter’s admirable track record when it comes to terrorist cells.

The BCIJ, in particular, is equal to the enormous responsibility entrusted to it and, together with the other services, its work deserves the highest praise.

But there is no such thing as zero risk, and the ultimate proof is there for all to see in what happened in our mountains.

It is well known that the Imlil region, where these murders took place, is visited by many foreign tourists, particularly those who enjoy mountain trekking.

This niche tourism segment, which has seen rapid development in recent years, is highly appealing to foreigners who are looking for outdoor adventure in beautiful landscapes, where Nature remains untouched and unspoilt.

While it is estimated that more than 25,000 foreigners visit this region each year, are we entirely sure that they can travel in safety and that the human and material resources are in place to prevent every conceivable type of risk?

Quite obviously, the answer is no, since these two young women were killed a few hundred metres from a village, while their killers, who were not local residents, also camped in the same place, most certainly with the intention of carrying out their terrible plans to assassinate foreign tourists.

As far as we are aware from the information available, there was no security force in the area. And, until that fateful night, anyone who wanted to, could stay in the area.

The damage, the terrible damage has now been done.

We’ll need to start all over again, put this ignoble act behind us, reassure and convince, urbi et orbi, that the Kingdom remains a safe and hospitable country.

In just one night, four thick brutes wanted to destroy what Morocco and Moroccans have built for years, trust!

The second lesson to be learnt in the wake of this unspeakable tragedy, besides reinforcing security for foreigners, is to ensure that, the incessant and resolute combat again the ideas and perceptions, as false as they are bloodthirsty, of the followers of Daesh and those who propound a vision of terror and obscurantism, remains a top priority.

The Moroccan people, on social media in particular, by gathering near the Danish and Norwegian embassies in Rabat to pay their respects, via the national media also, as well as the firm and rapid response shown by the authorities, demonstrated their compassion, their rejection of the unspeakable horror embodied in these murders.

We must now go further and faster.

We must show zero tolerance for all demonstrations of fundamentalism, including those at the intellectual level and we must implement targeted action against media sources that support, even indirectly, the bestial brutes who committed the irreparable in Imlil.

And this time, no question of burying our heads in the sand.

We must wage a relentless war against the monstrous hydra of Takfirist, Salafist and jihadist fundamentalism as long as it continues to pervert minds in Morocco itself!

Original article : https://lnt.ma/terrible-lecon-dimlil-combattre-relache-lhydre-terroriste/

Fahd YATA

The post The terrible lesson to be learnt from Imlil is to wage a relentless war against the terrorist hydra appeared first on La Nouvelle Tribune.

Social provisioning has increased with the proceeds from privatisation divided equally between the Hassan II Fund for Economic and Social Development and the General State Budget.

A social solidarity contribution is to be introduced at a rate of 2.5% on the profits made by companies which are liable for corporate tax and which will generate profits of more than MAD 40 million for two consecutive financial years, commencing 1 January 2019.

The 2019 Finance Bill contains a slew of other new measures in relation to the first two priorities, far too numerous to be listed here. This is something which we heartily encourage, given the many inequalities that exist in our country.

But to be able to sustain development and meet the needs of society, we have to recognise that an economy’s health is measured by its rate of growth, its unemployment rate, government debt and household debt levels etc.

In this respect, the 2019 Finance Bill sets out a third priority, which is to provide impetus to investment and support for the corporate sector.

In practical terms, this has meant amending the existing corporate tax scale and adapting it to the specific needs of SMEs i.e. capping the rate at which profits are progressively taxed at 17.5% for those companies generating profits of between MAD 300,001 and MAD 1,000,000 and which currently pay tax at the standard rate.

Providing impetus to investment and support for the corporate sector, so as to bolster support for SMEs and small businesses, also consists of reducing payment delays and accelerating VAT refunds for those businesses which deduct more VAT than they collect.

This may be otherwise described as clearing cumulative VAT credit and accelerating refunds.

The 2019 Finance Bill also promises improved access to financing by simplifying guarantee mechanisms and raising the financing ceiling through microcredit. It also provides for the introduction of a new guarantee mechanism for small businesses.

These are important measures that need to be implemented rapidly. Unfortunately, however, they are unlikely to provide enough impetus to investment and support for the corporate sector, which is one of the three priorities of the 2019 Finance Act.

Furthermore, while government investment of MAD 190 billion in 2019 will continue to drive private sector growth, it will not be enough to boost investment on a sustainable basis.

Admittedly, a new investment charter is being drafted by the department of Moulay Hafid Elalamy, Minister of Industry and Commerce. But it is perfectly legitimate to question why the charter was not drawn up sufficiently in advance so as to incorporate the measures outlined in the 2019 Finance Bill.

How can investment be revived without tax incentives? Conversely, how can tax incentives be granted it they are not even included the Finance Bill?

And the fact that investment needs to be promoted in all types of project, not just major projects of more than MAD 200 million, which qualify for 5-year exemption, if they are governed by an agreement with the State.

What is needed, in fact, is investment in companies, to enable them to grow, enhance their export competitiveness and generate wealth and jobs.

More specifically, we’re talking about current capital expenditure that SMEs are unable to make without the help of government, which must drive the process aimed at improving the economy’s entrepreneurial fabric. That is why the new investment charter is just as important as the slew of measures benefiting SMEs, proposed by the 2019 Finance Bill.

Investment enables companies to be resilient and should takes precedence over all else. The new measures for promoting investment provide a more effective panacea when it comes to revitalisation, the third of the 2019 Finance Act’s priorities.

Unfortunately, however, it takes time for them to become widely known, despite the business climate deteriorating and confidence ebbing away…

Afifa Dassouli

The post 2019 Finance Bill failing to provide sufficient impetus to investment appeared first on La Nouvelle Tribune.

And the injury toll? Seven policemen from the Civil Guard wounded, fifteen on the Moroccan side as well, all with injuries and burns to the face.

The following day, we are told that the immigrants have been handed over to the Moroccan authorities who announce that they are to be deported to their countries of origin.

This decision, apparently the first of its kind, is justified by a Spanish-Moroccan agreement dating back to 1992, which allows for immigrants smuggled into Spain from Moroccan soil to be readmitted.

21 October 2018, this time it’s the Melilla enclave, near Nador, which provides the stage for a massive assault perpetrated by more than 300 immigrants.

180 of them manage to get through, while 141 fail in their attempt and are arrested by the Moroccan authorities.

Violence is again used to gain forcible entry, resulting in injuries to about fifteen soldiers from the FAR and Auxiliary Forces and seven on the Spanish side.

While the Moroccan Ministry of the Interior announces that the 141 immigrants are to be deported to their countries of origin, Spain confirms that 55 of the 180 sub-Saharans, who have managed to get through, are to be handed over to the Moroccan authorities. The Kingdom is to instigate deportation procedures against the 55.

ZERO TOLERANCE!

We now understand, on the basis of the information provided, that a new Moroccan-Spanish policy on illegal immigrants is in the process of being drawn up despite the somewhat lively protests by Moroccan and Spanish NGOs, which denounce these accelerated measures and deportation conditions.

On both sides of the border, the authorities want to radically dissuade all candidates for the h’rig from attempting to do so via the enclaves.

Not just because the assaults are on an increasingly larger scale and more violent, not just because people have already died but, above all, because the other ‘routes’ (Libya, the Balkans) are now almost entirely closed. Madrid and Rabat would like to prevent this new option from gaining a foothold for those who dream of the European Eldorado and who flock in their droves to the Ceuta and Melilla enclaves.

A clear signal has therefore been sent to candidates for the h’rig that the perpetrators of any violence or attempt to illegally cross the border will be deported to the country from which they came. It also underlines the fact that the Moroccan government has more or less managed to commit a number of sub-Saharan embassies to cooperating in identifying and repatriating the arrested harragas.

Furthermore, after the tragic episode which saw a young candidate from Tetouan die aboard a go-fast, shot by the Royal Navy, the patera solution has also became very risky, primarily because the Moroccan and Spanish officials have finally understood that these illegal transfers by sea in fact serve as cover for drug traffickers across the Strait.

In recent weeks, several mafia-smuggling networks have been dismantled and a number of boats seized, while Morocco has heightened border vigilance along the Moroccan coastline and in our territorial waters.

Thus, while the European Commission finally promises to specifically allocate funds to combat illegal immigration, providing a hundred or so million euros to help Morocco in its efforts, governments on both sides of the Strait are also aware that clandestine immigration has surged exponentially.

LA MANO EN LA MANO

Pedro Sanchez, Spain’s prime minister, has toned down his threat to dismantle the fencing around Ceuta and Melilla, while cooperation between public security officials from countries seems to be working effectively.

It is true that, for both the Moroccan and Spanish authorities, the number of attempted illegal border crossings is increasingly worrying.

While the Moroccan government announced that 54,000 attempts had failed in 2017, the International Organisation for Migration (IOM) specified that, since January 2018, 47,000 immigrants had entered Spain illegally including 5,000 by land.

According to the German authorities, the mafia networks that proliferate between northern Morocco and southern Spain are capable of organising passage for 6,000 illegal immigrants each month!

In such a context, while Rabat repeatedly proclaims that the Kingdom has no intention of assuming the role of prison warden to simply satisfy the populist and xenophobic desiderata of a number of European capitals, it is clear that Rabat and Madrid have nevertheless adopted a stronger and tougher policy aimed at closing off the ‘Strait Route’ to illegal immigrants, regardless of whether the latter are Moroccan or sub-Saharan.

Automatic deportation and forcible removal to the South of Morocco, if acts of violence have been committed in attempting to cross, await those candidates who, grouped together in the North, in Tangier in particular, await the ideal moment to embark or storm the fences. Such is the new order of things. Whereas, tens of thousands of sub-Saharans already in the country have succeeded in recent months and years in acquiring bona fide resident status.

But the major preoccupation of the Moroccan-Spanish authorities, as far as the h’rig is concerned, is to avoid opening the floodgates.

Fahd YATA

The post Illegal immigrants, a new line drawn in the sand… appeared first on La Nouvelle Tribune.

The nation was able to follow it ‘live’, enabling his presentation of the Finance Bill to reach a much wider audience, proof, if ever needed, of a genuine sense of heightened expectation as a result of King Mohammed VI’s new directives, set out in recent weeks in royal addresses.

From the outset, the Minister of the Economy and Finance admitted that the Kingdom’s public finances had deteriorated with the budget deficit widening and government debt reaching nearly 70% of GDP.

Confronted with this deteriorating situation, Mr Benchaaboun pledged, by the end of the year, to control spending and reduce the fiscal deficit to less than 3.6% versus an initial target of 3%.

Increases in various expenditure were unavoidable in 2018, suggested Mr Benchaaboun. Examples cited were the price of gas which had risen from USD 441 a tonne to USD 644 and the price of oil, which had increased from USD 52 a barrel to USD 82.3 between 2017 and 2018, resulting in 4.7% growth in spending on subsidies.

The other factor underlying the deterioration in 2018 budget deficit was a revenue shortfall, due to a drop of almost MAD 3 billion in corporate tax.

Then, highly instructive, Mr Benchaaboun detailed the various increases required under the Budget in the first year of the new three-year Organic Law 2019-2021, as well as the external constraints that had to be taken into account. In doing so, the Minister highlighted the Treasury’s funding needs and the means of meeting them.

Adopting a logical and rational approach, Mr. Benchaaboun listed the following 2019 budgetary constraints:

– Subsidy expenses of MAD 18 billion, an increase of MAD 5 billion compared to the 2018 Finance Bill;

– Increase in VAT refunds to MAD 9.3 billion dirhams versus MAD 6.3 billion in 2018;

–  Increases in social sector expenditure, including civil servants’ pay which will increase by MAD 3.3 billion dirhams to MAD 112.16 billion, public spending on education which will rise by MAD 5.4 billion to MAD 68.28 billion and on health which will grow by MAD 1.5 billion to MAD 16.33 billion;

– An increase of MAD 5 billion in business investment loans;

– Budgetary impact from reforms of MAD 2.7 billion.

As a result of these additional expenditures, the Treasury’s funding requirement will increase by MAD 27 billion.

And Mr. Benchaaboun, drawing on his experience as a banker, then set about highlighting the funding resources required to be able to meet these needs. The Minister of Finance outlined to journalists and internet users a variety of practical solutions to financing the government’s huge budgetary requirement in 2019 in order to implement the royal recommendations designed to combat precariousness and poverty while reviving the domestic economy.

The proposed additional financing will come from a MAD 1.8 billion increase in domestic consumption tax on tobacco, MAD 5.7 billion in corporate tax, MAD 5 billion in privatisation revenues and MAD 2 billion from improved governance of State-owned enterprises.

Admittedly, these sums add up to only MAD 15 billion out of the MAD 27 required but, this time round, Mr Benchaaboun is innovating by opting for new financing mechanisms.

Indeed, he intends to raise MAD 12 billion of finance by adopting a new approach to financing public spending based on a partnership between the State and institutions. The goal is to have the private sector finance investment projects in social sectors, infrastructure and agriculture.

This effectively amounts to the State raising the funds that it needs from the capital markets, a recipient of domestic savings, without precluding the possibility of signing finance agreements directly with insurance companies, pension funds or investment funds.

Furthermore, the regulatory framework governing real estate collective investment undertakings (OPCI), which provides for a reduction in tax by means of a 50% tax deduction on rental or other income, goes some way to facilitating the new relationship that Mr. Benchaaboun is striving to foster with the private sector.

And, to illustrate this new approach to government financing, the minister gave an example of the private sector financing the construction of schools and then renting them to the local authority, resulting in savings in terms of the investment cost and a reduction in government debt…

Afifa Dassouli

Original article : https://lnt.ma/plf-2019-m-benchaaboun-opte-mode-alternatif-de-financements/

The post 2019 Finance Bill, Mr Benchaaboun opts for an alternative method of government financing appeared first on La Nouvelle Tribune.

Just like any other section of society and social class, it, too, experiences moments of doubt, a lack of self-confidence. However, unlike the most disadvantaged sections of the population, the poor and even the middle classes, its future is guaranteed for no other reason than the fact that it possesses property, financial assets, stock market investments and life insurance contracts…

Being financially well-off no longer provides reassurance, however, as can be seen from the ‘migratory movements’ to greener pastures in recent months.

Of course, we’re not talking about flows of people who cross borders illegally in search of a better future, like the thousands of sub-Saharans who attempt, either by boarding patera boats or climbing over murderously high fences, to reach supposedly more welcoming shores in Europe.

“Open Sesame!” or rather “Open Schengen!”

No, our nations’ jet set harragas are not adventurers… They need comfort, certainty and security. They are simply looking for a back-stop, just in case…

It is by having a number of options ‘on the go’ that they will be able to achieve their goals.

The first step for those unable to obtain ‘citizenship’, as they say, is to acquire a Schengen visa.

Appropriating this famous ‘sesame’ or door-opener, ideally for a period of more than a year, has become the eternal quest of our nation’s bourgeoisie.

And the complaints and grievances of these ladies and gentlemen who remonstrate against the consular authorities of this or that EU member country are only too audible.

Why? Not only are the eligibility and qualification criteria much stricter than ever, but waiting times are long, far too long for those who never queue at the baker’s and triple-park when collecting their children from school.

The visa has therefore become very popular lately because it allows the holder to leave the country at any time as well as, in particular, providing him or her with a sure means of overcoming all that existential angst by purchasing property outside Morocco.

Some, if they are very wealthy and ‘in the know’, go to Canada to obtain a residence permit there in exchange for depositing tens of thousands of dollars. Others try their luck in the United States. But the vast majority turn towards neighbouring Spain, which unquestionably offers ‘the best value for money’!

Spain’s appeal lies primarily in its geographical proximity since only the Strait of Gibraltar separates us from the Costa Del Sol, in its beaches, its tapas bars, its El Corte Inglès, its night clubs and, last but not least, its huge housing inventory.

The latter has been made accessible to our ‘dear’ (by that I mean ‘wealthy’) compatriots as a result of the terrible financial and economic crisis which hit Spain in 2008.

The collapse of the US subprime mortgage market in fact led to the bursting of the real estate bubble in Spain (and elsewhere), which, by way of example, saw one of the industry giants, Fadesa, go out of business. This put a nail in the coffin of the National Azure Plan’s flagship projects, the Saidia beach resort, later recovered (begrudgingly?) by Addoha Group …

Rebajas, rebajas…

Andalusian real estate developers, to get out of a hole, had to lower their prices by 20% to 30%, while town halls such as the one in Puerto Banus, for example, granted new foreign buyers, that is to say Moroccans, ‘gold cards’, providing a permanent residence card to all members of a family owning a pied-à-terre in Andalusia.

Naturally, it’s not possible to determine very precisely the exact number of Moroccan citizens who have taken advantage of such ‘opportunities’ of making savings in euros, purchasing real estate and obtaining a permanent residence permit in one fell swoop.

Of course, the Moroccan authorities, after the famous one-time tax amnesty of 2016, have been unable to provide any figures about such acquisitions or the buyers’ identity. Because the amnesty was covered by a secrecy covenant. Phew …!

However, some reliable figures collected from the Spanish authorities ‘off the record’ state that there are now more than 350,000 title deeds held by Moroccan citizens in southern Spain!

Such a figure is consistent with another statistic indicating that since 1 January this year, more than 900,000 Moroccan tourists have been to Spain!

Cambio? aqui, aqui!

Spain and Andalusia, in particular, have therefore become havens for Moroccan society’s ‘upper crust’, which is prepared to gamble heavily, very heavily on ex-filtrating their hard cash, illegally of course, in order to own an apartment or a villa on the Costa Del Sol.

It’s very true that the Ceuta ‘channel’ has been much in demand in recent months. A large number of wealthy urbanites from Casablanca, Rabat or wherever know exactly where to exchange their dirham-filled suitcases for euros, provided by illegal money changers close to the border itself and, in particular, in the immediate vicinity of Ceuta’s old covered market right next to a fuel pump (take note customs officers and interested parties…)!

For the more cautious, a number of other channels exist for handling such transactions, which, incidentally, incur higher rates of commission, justified by the fact that such transactions are of course illegal.

And the consequences of this ‘rush’ by Morocco’s bourgeoisie to the south of Spain? As well as provoking a haemorrhaging in the dirham, it has led to an exodus of buyers which has directly penalised the country’s own luxury real estate and residential industry.

The big promoters, the very ones that took full advantage of the bubble a few years back, are now sulking because their prospective customers have fled.

Foreigners have also turned their backs on Morocco, Marrakech proving too expensive, while Moroccans are instead opting for ownership of a property in Spain, to the extent that many are now complaining that they are unable to resell their Moroccan properties or surplus landholdings, eager as they are to ‘invest’ elsewhere…

Ultimately, the entire domestic economy is suffering, from the real estate industry to foreign exchange reserves, and there is no sign of any meaningful response from the authorities.

But this behaviour of saving one’s own skin can hardly come as a surprise, given that this particular social class, both in Morocco and elsewhere around the world, has never really proved to be a paragon of patriotism!

Fahd YATA

Original article : https://lnt.ma/maroc-espagne-hrig-fric/

The post Morocco-Spain, dosh’s h’rig appeared first on La Nouvelle Tribune.

This private placement is the first time that Al Omrane Holding (HAO) has tapped the capital markets. The issue is also exceptional by its structure and size.

Al Omrane Group’s first ever offering is entirely consistent with the government’s recent decision to diversify its sources of finance by increasingly resorting to private capital! And in this its first offering, Al Omrane is not pulling any punches, asking the market to cough up one billion dirhams.

But the most important feature of this issue lies in the fact that half of the offering, MAD 500 million, is to be raised in the form of Green, Social and Sustainable Bonds. And, that the funds raised from issuing these sustainable bonds will be used to finance Al Omrane’s environmental and social projects.
Half will be green!

The environmental projects in question fall under the category of energy-efficient buildings, meaning construction and/or pilot housing projects that incorporate a variety of innovative architectural and technical solutions based on Morocco’s different climate zones.

In this category, the selected projects include Al Omrane’s head office – expected to generate 133 MWh/year of energy savings and reduce greenhouse gases by 62 tonnes of CO2 equivalent/year – and 3 pilot projects with an overall capacity of 481 units in El Hajeb, Tamensourt and Nador. The latter are expected to generate savings of 577 MWh/year and reduce greenhouse gas emissions by 51 tonnes CO2 equivalent/year.

Green projects and social projects will also be financed out of the same MAD 500 million sustainable bond tranche.
In this respect, 4 projects located in Casablanca and Marrakech are to be prioritised. These projects aim to provide 32,800 people with access to housing and essential services.
This issue represents a major strategic shift for Al Omrane, Morocco’s leading public-sector real estate and housing development company.

To satisfy the criteria for issuing bonds of this type, Al Omrane has established a clear framework for appraising and selecting eligible projects, allocating the funds raised, managing these funds as well as monitoring and reporting on their use and the social and environmental benefits of eligible projects.

This framework has been established in accordance with the relevant international standards (Green Bond Principles and Social Bond Principles) as certified by Vigeo Eiris, an independent third party which has reviewed the framework governing this offering.

The issue’s structure and terms

Turning to the financial side of things, the sustainable bonds issued by Al Omrane have a 10-year maturity with principal repaid annually on a straight-line basis.
The bonds will be allocated by the ‘French auction’ method and will offer a premium of between 100 and 110 basis points (versus a premium of between 110 and 120 basis points for the plain vanilla bonds offered concurrently).

It is worth noting that as far as the terms of Al Omrane Holding’s first ever issue is concerned, there is no difference between the plain vanilla bonds and the green, social and sustainable bonds.

Each of these two categories has three tranches: the first, not listed on the Stock Exchange, redeemable and with a fixed rate; the second, listed, redeemable and with a fixed rate; and the third, unlisted, redeemable and with a floating rate. These three tranches have been differentiated to meet the portfolio management requirements of the various categories of institutional investor.

It is also important for investors to have some detailed information about the company’s financial health and its business activity.
2017 results mixed

It is first worth pointing out that Al Omrane Holding is private limited company with Executive and Supervisory Boards. As at 30 June 2018, the company’s share capital was MAD 2,104,047,700, owned by the State.

The purpose of the holding company is to implement public policy with regard to housing by developing appropriate real estate development and financial strategies. The company has no fewer than 14 subsidiaries that specialise in various business lines and projects. Consolidated turnover was MAD 4,635,231,000 in 2015, MAD 5,326,826,000 in 2016, an increase of 14.9%, and MAD 5,048,287,000 in 2017, down 5.2%.

HAO’s consolidated net income over the past three financial years went from MAD 464 million in 2015 to MAD 582 million in 2016, an increase of 25.6% before declining by 56.5% to MAD 253.5 million in 2017.

HAO’s shareholders’ equity stood at MAD 5.6 billion in 2017 with total liabilities of MAD 53.6 billion dirhams. HAO’s consolidated financing liabilities amounted to MAD 2.85 billion, without it of course having issued any bonds. Current liabilities including accounts payable to suppliers, customers and other parties – government employees – stood at MAD 42.6 billion.

HAO’s bond issue prospectus is very explicit about the group’s debt position in the paragraph which states: “In order to support its development plan, Al Omrane Group is financed by domestic and international financial institutions. Al Omrane Group’s debt position remains under control with a net gearing of 56.5% at 31 December 2017.

To reduce its currency risk exposure on its foreign currency-denominated debt, HAO hedges its exchange rate exposure so as to minimise debt servicing costs and reduce the overall cost of its debt.

Furthermore, HAO is gradually replacing its foreign currency-denominated debt with dirham-denominated debt.”
The most important feature of HAO’s MAD 1 billion mixed bond issue is its investment plan for the period 2018-2020, which is predicated on it generating MAD 5.7 billion of turnover in 2018, MAD 5.9 billion in 2019 and MAD 6 billion in 2020.

For the current financial year, the holding company’s consolidated turnover is expected to reach MAD 5.3 billion with net income of MAD 397 million. In 2019, turnover is forecast to reach MAD 5.67 billion and net income MAD 446 million.

Turning to HAO’s risk profile, one of the major risks facing the company is its high level of inventory as mentioned in the prospectus in the following paragraph:
“At 31/12/2017, inventories amounted to MAD 32.1 billion, the equivalent of almost 60% of the Group’s total assets, MAD 15.7 billion of which were work in progress and MAD 15.3 billion of finished goods.

The Group’s inventory committee, management committee and sales department are monitoring this situation closely so as to identify any specific programmes encountering difficulties as far as marketing is concerned. The Group has also adopted an official process for reporting inventory data.”

Lastly, it is worth recalling that that the subscription period runs over 3 days from 12 to 14 November inclusive.
There is no question of this transaction being anything but a success since institutional investors are keen on diversifying their investment portfolios. This is due to the fact the returns earned on financial investments are extremely low…

Afifa Dassouli

Spotlight on Green, Social and Sustainable Bonds as defined by the AMMC:

Green, Social and Sustainable bonds are the preferred investment choice when financing projects that help achieve the UN’s global sustainable development goals.

Sustainable bonds comply with the general principles governing relations between issuer and investor (duty to respect agreed contractual terms and provide ongoing and frequent information etc.) without there being any specific legal regime.

Given the market’s rapid growth, however, the various stakeholders have endeavoured to develop principles and best practices when it comes to investor-issuer relations in relation to bond issues and agreements entered into with local authorities. International standards for sustainable bonds do not require any specific features in terms of how a Green, Social and Sustainable Bond issue is structured. In addition, the operating principles governing these instruments are identical in every aspect, the only exception being the way in which the funds raised are allocated.

The way in which the funds are allocated is therefore the cornerstone of sustainable bonds. The funds raised must be allocated to projects which have an environmental and/or social impact. Eligible projects may be either prospective projects, where finance is needed to implement them, or existing projects, for which the issuer is looking to refinance its debt.

The projects requiring finance must be clearly defined by the issuer and their impacts clearly described and quantified. In addition, to qualify as a social bond, the issuer must also define the target population(s) that is/are expected to benefit from the projects’ positive social impact.

In its guide on sustainable bonds, the AMMC states that it is not able to act as guarantor for the issue’s social or environmental attributes but instead relies on a second opinion provided by an independent auditor or external certification provided by the issuer. The AMMC ensures, however that sufficient information about the process adopted by the issuer is provided to potential investors.

Green, Social and Sustainable Bond issues are therefore subject to the same due diligence customarily carried out by the AMMC. However, particular emphasis is place on describing those aspects which relate to how the funds raised are to be allocated, the specific target, the criteria used to select investments as well as the latter’s’ environmental and/or social impact.

In addition, the procedures for communicating with investors must be well defined, ensuring that the latter are provided with clear, relevant and up-to-date information. Investors must also be informed of the independent auditor’s conclusions.

AD

The post Al Omrane taps the capital markets for the first time with a huge offering appeared first on La Nouvelle Tribune.

The Ministry of Finance’s economic report, based on March data, states that after “a year in which the rate of growth accelerated to 4.2% in 2017, growth is likely to be around 3.2% in 2018”.

According to the DEPF, non-agricultural economic activity is expected to accelerate in relative terms, driven by an improvement in the tertiary sector and secondary export activities. This is due to the fact that exports, excluding OCP’s, performed well to end April 2018, reflecting the strong momentum of key export sectors such as automotive and aeronautics. Investment, in particular, is likely to remain robust based on the fact that these positive trends are likely to persist.

These positive numbers have had little impact, however, on overall business sentiment, with business confidence showing few tangible signs of improvement.

The question, therefore, based on these figures, is whether the Moroccan economy has emerged from the economic slump of the post-financial crisis of 2007-2008 and, if that is indeed the case, why has economic growth been so moderate?

We checked out these findings with a banker whose remit encompasses every sector of the economy, Mr Mohamed Agoumi, Managing Director responsible for International Coordination at BMCE Bank of Africa. Mr Agoumi, who is also an experienced economist, believes that, “Over the past three or four years, growth has undoubtedly been weak because Europe, our main customer, has struggled to deliver any significant level of growth.

Fortunately, since last year, the domestic economy has resumed its growth trajectory. But have we made up for those years in which Europe was in crisis? The world being what it is, probably not.”

Burdened by the past

In Mr Agoumi’s opinion, there are a number of important reasons for this.

First, payment periods between companies are extremely long.

Second, defaults remain at a high level, as illustrated by the banks’ non-performing loan ratio, which rose again this year to above 7%. This is high for Morocco, given that there was a time when it was 3% at most.

This clearly implies that the economy is not yet free of the burden brought about by this recent challenging period and that the current environment remains gloomy is therefore entirely understandable.

Mohamed Agoumi believes that there are at least three explicit structural reasons for this contradictory situation: “The first”, he says, “is administrative, because Morocco does not yet have an accelerated decision-making process.

There are of course two aspects to growth. First, economic health, and, above all, the speed at which economic transactions are executed. The faster the pace, the more money the State and businesses can make. This is called the velocity of money.”

There are countries where things are happening much faster. It is clear that a new approach is needed to accelerate the pace of investment. We hear interesting things, of course, without actually seeing concrete results. And this is a huge obstacle for the Moroccan economy.

The second reason, according to Mohamed Agoumi, is that “domestic growth, putting aside the manufacturing component, is largely driven by sectors such as agriculture and real estate”.

Agriculture, however, is highly dependent on the vagaries of the weather and its performance can fluctuate as a result. It is therefore impossible to build something that is sustainable with such high volatility. Agricultural performance can only be judged over smoothed 10-year periods.

The problems which have negatively impacted the real estate industry are ongoing and remain unresolved.

It is difficult to forget that far too many buildings were built by comparison with actual market demand at a time when the financial and economic crisis in Europe significantly reduced overseas demand, especially in the high-end segment, as well as impacting purchases by expatriate Moroccans.

The social housing segment was also affected, first by excess supply, then by a slowdown in demand over the past three years.

The result of all this is that most real estate developments have still not been completed.

The banks, which had lent heavily to real estate developers, have sharply reduced their exposure to this sector, adopting a more conservative and selective approach.

The third and final reason, according to Mr Agoumi, is that Morocco has enjoyed an exceptional period of growth and a positive image overseas since the beginning of the reign of King Mohammed VI.

There are now a number of sectors in which Morocco is a major league player such as steel, construction, banking and insurance and aeronautics.

For example, France now regards Morocco’s banking sector as a genuine competitor in Africa.

And the same could also be said for the insurance industry.

Perhaps Morocco is now perhaps ‘paying the price’ of its own success’?

The country enjoyed a period of “ten or fifteen glorious years”, explains Mr Agoumi, referring to the first decade of the reign of King Mohammed VI, during which the context was very different.

 “We opened up the economy to a large extent, we encouraged entrepreneurs, momentum was at its strongest! Today, I think we need this kind of ‘second wind’, an impetus which of course won’t be the same as before because we were small then and no one was watching us. This needs to be sorted out quickly because we are now competing in the major league in a number of sectors and competition is fierce on all fronts.”

It remains to be seen what kind of ‘second wind’ this will be.

Clean up our act and get going again

To achieve this, the country has to adopt a different stance which must take into account several new factors.

The first of them is the issue of ‘Doing Business’. It is crucial that a list is drawn up of what is wrong and then for each of the problems stated to be tackled one by one.

The most important of these is the issue of corruption and the judicial system, especially its effectiveness, speed and independence.

‘Doing Business’ also includes everything already mentioned with regard to the Administration, including delays in implementation, red tape, complexities in how the system works, as well as how to approach the tax issue.

What foreign investors need is far-sightedness and transparency.

What is most definitely needed is to have an overall tax framework that is strictly complied with, at grassroots level. Standardised rules for foreign investors are also extremely important because they need to know where they are heading!

This is all underpinned by the same reasoning that Mr Agoumi summarised in a single sentence, “The period of time that elapses between a government decision and actual implementation, at grassroots level, needs to be very short. In the private sector, this is known as the start-up phase.”

Morocco must make its reform process a top priority if it is to take advantage of the current upturn and tackle the many challenging projects that it faces head-on.

Among these are the real estate sector, education, which is crucial, as well as vocational training, sector by sector.

Last but not least, the final point is how to go about resolving the issue of the lengthy payment periods between the Administration and businesses and between businesses themselves.

The VAT refund initiative therefore represents a very good start when it comes to putting fuel into the economic engine.

Furthermore, to support SMEs, which constitute the vast majority of companies in Morocco, the State Budget needs to release funds to them to ensure that they receive what they are owed by the public authorities.

This would already be a major step forward and would have a positive impact on the credit approval process and bolster the banks’ confidence in companies as well as between businesses themselves.

It is simply a question of applying the law, as it stands, on payment periods as few companies currently wish to work for the State because of the delays in receiving payment.

Mr Mohamed Agoumi concluded on a somewhat optimistic note, however, commenting that “despite all this, a number of sectors are beginning to fuel growth on an ongoing basis. Entire swathes of the economy have returned to growth. Let’s be positive and help them to speed up the pace.

Our country is attracting more and more foreign investment, the tourism sector has picked up and agribusiness is performing relatively well, not to mention, of course, the automotive and aeronautics sectors.” 

Afifa Dassouli

The post Growth is returning but delays and blockages persist appeared first on La Nouvelle Tribune.

While Spanish banks and businesses experienced difficult times, with each accepting their share of the blame, Spain always knew, however, that the European Central Bank was on hand to provide a backstop.

The impact on the Moroccan real estate sector from the economic crisis that affected our country has been considerable, especially since 2014.

Real estate developers must of course take their full share of responsibility, many of which are accused of ‘badly-built’ developments and projects.

The banks’ responsibility, however, in this crisis affecting the real estate sector is also obvious.

Overwhelming support was provided by the banks to real estate developers to enable them to ‘keep their heads above water’, even going so far as using hitherto untried instruments such as repurchase agreements and dations-in-payment, in addition to rescheduling their debts when they got into trouble.

That was because the banks would appear to have had no other option since the entire banking sector was vulnerable to systemic risk as a result of the sheer size of the banks’ exposure, which amounted to billions of dirhams.

This is but an example showing that we are not yet done in solving the problems of the past.

This is because our domestic banking sector, unlike Spain’s, could and can only count on itself! Which means that more time is needed to resolve problems…

There is only one possible solution, however, to the domestic real estate market’s current crisis.  That single solution, in fact, is to shrink market supply by putting a brake on real estate companies’ business activity. And especially since buyer confidence has dissipated as a result of generally poor construction quality across all market segments.

The same can be said for Maghreb Steel, a steel maker, which is stuck with MAD 6 billion of bank debt, without the banks being able to find any means of resolving the situation.

A merger with Sonasid is envisaged, however, to enable Maghreb Steel to rid itself of its structural debt problems.

One of the questions that such a deal throws up is whether those banks with the greatest exposure to Maghreb Steel might not be able to convert their debt into equity in the new steel mill.

It would appear that Maghreb Steel has already entertained such a notion, having already converted some of its debt into shares, as was done in Spain’s restructuring.

In that country, the banks swapped their debt for equity in a number of companies which were then listed on the stock market, the level of required provisioning determined by their market value.

Morocco, however, is a different kettle of fish. In our situation, solutions always take time to materialise and even more time for them to be actually implemented…

The Moroccan economy suffers as a result, because growth is held back by the lack of any meaningful contribution to economic activity from these ‘sick’ sectors.

And while the banks are able to diversify into other areas of the economy that are growing, those sectors encountering difficulties remain handicapped, however, under the weight of their bank debt and a lack of impetus in their underlying business.

Afifa Dassouli

Original article : https://lnt.ma/secteurs-difficultes-crise-perdure/

The post Sectors encountering difficulties and the reason for the ongoing crisis appeared first on La Nouvelle Tribune.

Innovation is advancing rapidly but the legal framework is struggling to keep pace. This is indeed the case for biotechnology, big data, artificial intelligence, automation etc. These are major issues affecting today’s society which, if poorly understood, could put the planet and the very future of the human race at risk.

For all that, companies, especially larger ones, still have to make decisions and, in such circumstances, it is ethics which fills the void left by the relative decline in the importance of Law. Decisions made on the basis of management by ethical values ​​and principles are becoming more and more prevalent as a result of rapid innovation

As a result, the major forces behind these innovations are beginning to reflect deeply on the implications of these issues. And, given that the learning process is ‘on the job’, and that change is so rapid, mistakes will inevitably be made, as can be seen from the recent case of the web giants and management of internet users’ personal data

The recent crisis also reveals that the level of sincerity shown in pursuing an ethical approach is one of the main distinguishing criteria for decoding the decisions of organisations which claim to take ethics seriously. In fact, as soon as such principles and values ​​are uttered, the only thing that really matters is what follows in terms of genuine action and that those companies which have adopted an ethics-based approach are invited to ‘walk the talk’.

Ethics and trust, the flip side of the coin

Traditionally, companies are primarily valued on the basis of the tangible value that they generate or on their financial and accounting attributes.

For Mr Emmanuel Lulin, L’Oréal’s Director of Ethics, “the ethics aspect must be regarded as an additional factor to enhancing a company’s culture of integrity. The more upstanding a company, the higher its value and the greater the likelihood of it being able to survive over the long term.”

Similarly, a company’s ability to build and maintain trust is crucial to its enhancing its value. “L’Oréal needs the trust of its customers, its suppliers and each of its stakeholders, including its employees. If a business is not able to generate trust, its value can drop substantially” adds Mr Lulin.

The boycott of Moroccan brands in recent weeks perfectly illustrates the fact that a culture of integrity and transparency is not enough when there is a breakdown in trust.

To get back on track, time, sincerity, integrity, respect, transparency and even courage are required to restore trust and be once again deserving of it. Because ethics is a long road which requires a high degree of self-sacrifice.

L’Oréal, which has adopted an approach which differentiates it from its peers, provides a perfect example of this. At the instigation of its Chairman, Jean-Paul Agon, the Group’s ethical approach is one of positive choice based on conviction. “It’s not a response but, instead, a proactive and deliberate approach”, says Emmanuel Lulin.

“L’Oréal is convinced that, in the 21^st century, only those companies that have incorporated ethics into their culture, strategy and daily practices will survive over the long term. We aim to be one of the most exemplary companies in the world. The ‘L’Oréal Spirit’ embodies the commitment made by L’Oréal to act ethically and responsibly, based on our four Ethical Principles – Respect, Integrity, Courage and Transparency.”

The approach adopted by L’Oréal, which has operations in 150 countries and just under 82,000 employees, is founded upon sincerity, one which is relatively rare among large enterprises. Therein lies its secret, the ability to square the circle, place human beings at the core, ensure that ethical issues have real meaning.

For example, by conducting an open and frank dialogue, without any waffle, about a whole range of issues, including those which are taboo, employees are able to disseminate the company’s values while tackling issues head-on. A sincerity-based approach makes it possible to diagnose the root causes and take corrective measures without double standards.

Ethics, underpinned by sincerity, then becomes an irrevocable and definitive part of an organisation’s DNA.

Zouhair Yata

 MR EMMANUEL LULIN’S BIOGRAPHY

Emmanuel LULIN, appointed as Chief Ethics Officer and Advisor to the Chairman in 2007. Reports directly to the Chairman and Chief Executive Officer, also responsible for overseeing Human Rights compliance within the Group.

Emmanuel Lulin joined L’Oréal in 1999 as Group General Counsel for Human Resources. In 2007, he set up the Office of the Group Chief Ethics Officer. Before joining L’Oréal, he was admitted to the Paris Bar in 1988 and practised as a corporate and tax lawyer at Debevoise & Plimpton in Paris and New York. He holds a Master of Laws from Chicago University and a law degree from the French Universities of Paris I (Panthéon-Sorbonne) and Paris II (Assas). In 1988, he was the Lavoisier laureate of the French Ministry for Foreign Affairs.

He has been a Fellow of the Ethics Resource Center (Washington) since 2016. He was formerly Chair of the Global Council on Business Conduct (New York) and sits on MEDEF’s Ethics Committee. Emmanuel represents L’Oréal in a number of international organisations including the UN Global Compact, UN Women and the Institute of Business Ethics (London).

Instrumental in setting up the first Master’s in Business Law and Ethics in France, he is a member of several university scientific committees and journals specialising in business ethics. He teaches regularly at Stanford, Sciences-Po Paris, CEDEP and EDHEC.

Ethisphere Institute recognised Emmanuel as a Top Ethics & Compliance Officer in 2012, 2014 and 2017. In 2015, he became the first non-American to be awarded the Carol R. Marshall Award for Innovation in Corporate Ethics by the Ethics and Compliance Initiative (ECI). He was a member of the Ethics Committees of the French Agency for Development (AFD) and the French Institute of Directors (IFA) and was a former director of the Cercle Montesquieu, the Ethics & Compliance Officer Association in the United States (2007-2012) and the Cercle Ethique des Affaires in France (2011-2017).

He founded the Cercle Ethique des Affaires’ Club for Ethics Professionals in 2012 and chaired the ORSE working group on Ethics, Responsibility and Corporate Strategy (2017). He initiated ThinkH + with Sciences Po Paris’ Law Clinic, France’s first think tank on transhumanism.

L’Oréal’s has been recognised 9 times by Ethisphere as one of the ‘World’s Most Ethical Companies”.

In 2017, L’Oréal was awarded the first ever Transparency Grand Prix for its Code of Ethics. In 2018, L’Oréal was honoured to receive the Award for Excellence from the Law and Business Ethics Chair of the University of Cergy-Pontoise for its initiatives in business ethics and governance in the following categories: Ethical Governance, Ethical Leadership and Ethical Influencer.

L’ORÉAL’S CODE OF ETHICS

• Benchmark document for the Group
• First published in 2000 (one of the first French companies to do so)
• Second edition published in 2007 (available in 35 languages/43 versions + in braille English/French)
• Third edition published in 2014 (available in 45 languages ​​+ braille English/French)
• In 2017, L’Oréal was awarded the L’Oréal was awarded the first ever Transparency Grand Prix for its Code of Ethics

Original article : https://lnt.ma/confiance-ethique-deux-marqueurs-de-loreal-2/

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On reading the communiqué issued by the general secretariat of Mr Saad Eddine El Othmani’s party, which had already vehemently admonished his colleague and ‘brother’, issued during the night of Tuesday 5^th June to Wednesday 6^th June, one might rightfully believe that the ‘activist-Minister’ was compelled to resign, rather than choosing to leave a government criticised for its inertia (the least that can be said) in managing the boycott crisis.

This decision represents the first fall-out of the boycott campaign, impacting the political landscape and the politicians themselves. Although it does not come as much of a surprise, it does, however, raise a number of issues not only for political decision-makers but citizens too.

In fact, is a government minister first and foremost a citizen and, potentially a member of a political party, or, as a member of the executive, is he not duty-bound to confidentiality?

Was Lahcen Daoudi ousted because he broke the moral contract which bound him to the government team or was it because he openly expressed his solidarity with Moroccan citizens who were employees of a multinational enterprise and who were tossed out into the street in the middle of the month of Ramadan?

Given the insults that rained down on him on social media by the PJD’s grassroots ‘activists’ for having exercised his freedom of conscience, it is undoubtedly because he took a stand against the boycott that Lahcen Daoudi was expelled from the government team…

And to such an extent, in fact, that the communiqué issued by the Islamist party urged its supporters to refrain from attacking the future former Minister of General Affairs!

The PJD’s leadership and Mr Saad Eddine El Othmani in particular have adopted a position that is as clear-cut as it is dangerous, by expressing and clearly stating that this party and its government representatives basically refuse to oppose the boycott movement launched on 20^th April…

They have shown their true colours on this occasion (the boycott); official recognition has been given by the head of the government himself to the practice of saying one thing and meaning another!

Daoudi would not have been excluded if he had not supported the hundreds of employees dismissed unceremoniously as a result of a movement which had begun on social media, and whose founders, in the wake of this PJD minister’s sacking, are not so anonymous anymore…

Because no one will believe that merely expressing a ‘different’ opinion has resulted in a member of the government being carted off manu militari in the middle of the night!

If that were indeed the reason, then the El Othmani team would have undoubtedly been decimated already on account of the series of ministerial postures occurring in recent months, as illustrated by the episode of RNI ministers sulking and boycotting (already!) a cabinet meeting and refusing to participate in the head of government’s tour to the Eastern region.

This latest government incident says a great deal, a very great deal about the state of decay in which the majority coalition finds itself.

The boycott of Centrale Danone’s dairy products has provoked a systemic crisis in an industry that is strategically productive for both the domestic economy and several million, mainly rural, citizens.

Public opinion, or at least the opinion expressed on social media which is broadly representative, aware of the dramatic consequences inflicted on 200,000 families, as the Minister Aziz Akhannouch pointed out to a parliamentary commission on the evening of 5^th June, has still not understood that the boycott is harmful to the most disadvantaged sections of society, those on small incomes, rather than a multinational enterprise that will very quickly endeavour to ‘limit the damage’, as we have seen.

Despite Centrale Danone losing significant market share and seeing its profits melt like butter in the sun, other milk producers have taken the helm, although the latter are already alleged to have cheated on the quality of the milk distributed to consumers!

So, who is right in this affair, Lahcen Daoudi, who courageously took up the cause of angry workers, ever faithful to his reputation as a committed activist, or the PJD, its grassroots supporters and its leaders, held hostage by social media, incapable of weaning themselves off their populist habit and lacking the courage that is sometimes required of swimming against the tide?

The head of government, Saad Eddine El Othmani, must therefore ask King Mohammed VI to accept Lahcen Daoudi’s resignation.

Might the Sovereign refuse it?

Fahd YATA

Original article : https://lnt.ma/lahcen-daoudi-vire-gouvernement-quoppose-boycott/

The post Lahcen Daoudi, sacked from the government for having opposed the boycott! appeared first on La Nouvelle Tribune.

The PAM, which would now appear to provide the main parliamentary opposition to the majority government, especially the PJD, now has a genuine leader, despite the latter’s lack of charisma, elected by the party’s grassroots supporters.

Public opinion did not really hold its breath over the election of Mr Benchemas, who is also Chairman of the House of Councillors. It is true that the PAM, despite being the second largest party in terms of the number of parliamentarians, had for a long time vanished under the radar, from the news and, even more so, from the hearts and minds of the vast majority of citizens.

Because, in truth, the history of the PAM, which will celebrate on 10^th August ten years since it was founded, has been a major fiasco. The aim of the party, which was founded ex nihilo, was to become the leading force on the country’s political stage.

Certainly, in the ten years since it was founded, the Tractor, a poor choice of name because it leaves everything fallow in its wake, has had as many as four general secretaries, Messrs Al Himma, Bakkoury, El Omari and Benchemas.

A plethora of parliamentarians have also joined it, who, as everyone knows, are consummate practitioners of transhumance, a practice which is also customary to livestock …

The party has also endeavoured to provide an alternative to a triumphal PJD, without, however, achieving the success hoped for by its founders. It has twice failed in successive legislative elections to become the No. 1 party on the political scene…

These different incarnations have not seemingly helped those who still believe that the PAM can be a useful and effective political platform in achieving its stated aims and goals.

Worse still, some would have us believe that the simple eviction of Mr Ilyass El Omari, of which nobody can be indifferent, irrespective of whether they are foes or acolytes, would be sufficient to restore to glory a party over which, for all intents and purposes, its leaders and elected members hold sway…

There is nothing to indicate, however, that the PAM is capable of achieving its aggiornamento, as has already been achieved, in more ways than one, by the National Rally of Independents (RNI), under the aegis of Mr Aziz Akhannouch.

Because, in addition to the lack of charisma and political experience of at least three of the four secretaries-general who have lead the PAM, there is an ongoing doubt as to whether the party is sufficiently appealing to the electorate.

It is not a question of whether it is capable of putting forward a political or electoral agenda or attracting candidates on the look-out for a label which is likely to generate benefits, honours, income or hard cash.

This modus operandi has been used several times before in modern-day Morocco without too much success. Any endeavour to reorganise the political chessboard requires much more than a blessing from the Powers-that-be, but rather, funds to generate patronage and to promote those who possess the qualities of populist showmen and who are purportedly capable of challenging adversaries.

There is no doubt, however, that Mr Benchemas’ assuming responsibility as PAM leader is entirely in keeping with the ambitions which led to the founding of this party.

But why would he succeed where his predecessors failed?

If it is to be believed that the various scenarios designed to reshape the political landscape are regularly studied and then implemented with a view to achieving future electoral success, then the PAM scenario should perhaps be thrown onto the garbage heap of history.

Establishing a forward-looking centre-left party is certainly still on the agenda, but this should not be done with actors who have clearly shown their limitations and their inability to assume their role as a credible alternative.

Because nothing can be done to patch the upper floors if the foundations are not solid!

If the strategists are already beginning to think about 2021, they may have to radically rethink their goals and the means allocated to achieving them.

But, believing that the PAM is still a valid option is probably not the best bet…

Fahd YATA

Original article : https://lnt.ma/politique-pim-pam-poum/

The post Politics: pim, PAM, poum… appeared first on La Nouvelle Tribune.

The boycott, launched on 20^th April and fuelled by thousands of fake news reports on social media, involving men dressed in black robes coming straight out of courtrooms, supported by a number of socially-correct newspaper publications eager to opportunistically adopt a populist posture, lauded by various far-left opponents who regard it as an opportunity to emerge from their torpor, like the perennial blossoming of a hibiscus flower, has ended up causing major damage.

However, those brands which have been targeted by the boycott, Sidi Ali, Afriquia and Danone, are they the only ones to have paid so heavy a price for it?

In fact, the financial cost of the social media campaign is not the only consequence of an affair which has gone viral, an affair in which the identity of the actual sponsors remains a mystery.

The boycott has dramatic economic and social consequences for hundreds of thousands of working-class Moroccan men and women, living in both rural and urban areas!

Widespread desertion

But who cares? As far as this affair is concerned, one thing is immediately obvious to everyone, which is the nonchalance of the government, the public authorities and the State!

Putting aside the mollifying declarations, verbal condemnations and pleas to refuse to join in the boycott or the inflammatory remarks made online which have made matters worse, the government and its officials have offered little in the way of concrete solutions, counter-measures or strategies to counter the boycotters, thwart the liars, pursue the slanderers and reduce the economic and social impact from such a destructive movement.

If the public security services are able to find and arrest, in just a few hours, masked individuals guilty of physically assaulting a couple in the Safi region, why is it not possible to be as responsive to a so-called journalist who testifies with face uncovered in front of a camera about the drought and the destitution affecting the inhabitants and regions surrounding the Lalla Haya and Sidi Ali Chérif springs?

If it is easy enough to prosecute an attempted rapist on an under-age girl caught on an amateur video taken by an accomplice, why it is not possible to stop people blocking service stations or attacking the drivers of the aforementioned brands’ distribution vehicles?

But, above all, what is the State doing to make its presence felt, its power, its durability, lawfulness and respect for citizens’ property and their safety?

120,000 small-scale milk producers have been forced to throw away one-third of their milk production. Isn’t that an absolutely urgent situation which demands, pronto, the public authorities’ speedy intervention?

What interim measures have been taken to reduce the social impact from this failure, announced and assumed by Centrale Danone?

It is the primary role of the government of Mr Saad Eddine El Othmani to act and respond, so as to support and protect the purchasing power of these citizens.

It is the primary role of those bodies responsible for security and public safety to take the necessary action if the law is violated, in strict compliance with the legal prescriptions.

It is the primary role of the State communications apparatus to choose the most appropriate way of explaining and informing citizens about the harmful aspects and consequences of the boycott, by mobilising public radio and television channels, rather than dulling them with boring and pointless programmes.

A case of Pontius Pilate

We are led to believe, however, that the boycott is a private affair between a few major brands, a few personalities and ‘shadow squads’, bitter about their loss!

Nobody within the government, the State and its institutions, would appear capable of gauging the feeling of desolation, the abandonment of responsibilities and the inertia felt so strongly and so keenly that it has become so deeply embedded in our citizens’ very souls!

A robust, rapid and powerful reaction can be expected from the public authorities, first of all, by providing a civic education about the boycott, its causes and consequences, as well as preventing dishonest and malevolent actions which, directly or indirectly, threaten social stability, seriously affect the economy, hinder free trade and ruin hundreds of thousands of small-scale milk-producing businesses.

Because in the weeks, months and years to come, when the time comes to evaluating the government’s action, the role played by the State in defending its own fundamentals, nobody will forget the void and vacuity generated by the absence of those who are responsible for defending us, protecting us, understanding us and helping us!!!

Fahd YATA

Original article : https://lnt.ma/boycott-ou-est-letat/

The post The boycott, what’s the government up to? appeared first on La Nouvelle Tribune.

The press, particularly the French-speaking press, has highlighted the extent of the damage caused by the boycott and the social and economic consequences of this campaign, which is clearly unjust, as far the three major brands are concerned.

For Centrale Danone, the consequences of this boycott include having to lay-off 886 temporary workers and reduce by 30% the volume of milk collected from the tens of thousands of (mostly small) farmers who supply the country’s main milk distributor on a daily basis.

Although it is obvious that the (anonymous?) perpetrators of this boycott campaign are guilty of social and economic crimes and must therefore assume entire responsibility for the consequences of their actions, Centrale Danone’s official reaction cannot leave one indifferent.

Left high and dry                   

This is because its approach would appear to be as inappropriate as it is credible. And for many reasons.

Making nearly a thousand of its employees redundant, temporary employees moreover whose lives are precarious, in the middle of the month of Ramadan, is simply inacceptable, socially as well as politically!

Leaving hundreds of employees high and dry, overnight, without informing the public authorities, the Ministry of Employment or senior members of the government, is inacceptable and would be totally unthinkable in other parts of the world.

Would Danone, for example, be able to behave in this way in France today?

Assuming responsibility, also, for depriving tens of thousands of its suppliers, small-hold and livestock farmers for the most part, of one third of their income, is also a major scandal perpetrated by a company which happens to be a subsidiary of a multinational enterprise with global commitments!

Has Centrale Danone’ local management really taken on board the social consequences of this lockout and the future of the many families in Morocco’s rural regions who, as a result, will now be obliged to throw away one-third of their milk production, rapidly get rid of their cattle which have provided them with a regular income as well as incurring a significant loss of income?

In behaving in such a way, Centrale Danone, which is the country’s leading distributor and producer of dairy products and derivative products, has adopted a cavalier attitude with little regard for the economic and social realities of Morocco.

It would suggest that, in this particular case, the multinational’s local management has basically used the boycott as a pretext for implementing an austerity and cost-reduction plan.

One wonders whether, as we have been led to believe until now, Centrale Danone was actually a collateral victim of the boycott campaign against Sidi Ali and Afriquia…

It is highly probable that neither Mrs Miriem Bensalah nor Mr Aziz Akhannouch would have allowed themselves to behave in such a way, despite their brands and their very persons coming under attack from the boycotters.

Mergitur, nec fluctuat!!!

In addition to the untimely nature of these measures which smack of social and economic disengagement, Centrale Danone’s approach brings to mind a number of other factors.

This company, which is listed on the Casablanca Stock Exchange, emjoys a somewhat unique status, in that, since the sale of Centrale Danone by SNI to French shareholder Danone, the latter owns almost a 100% stake in its subsidiary.

The result is that Central Danone stock’s free float on the Casablanca Stock Exchange is almost non-existent!

Perhaps it was for such ‘good’ reasons that local management again chose to ignore the legal prescriptions because, when alluding to the various difficulties encountered as a result of the boycott, it chose not to issue a profit warning, which would have in any case been somewhat pointless since Centrale Danone is (almost) the only shareholder in… Centrale Danone!

Lastly, how much credit should be given to the arguments and reasons put forward by Danone’s local management which, despite announcing a new communications policy designed to closer ties and empathy with Moroccan consumers, is adopting a rather narrow and highly selective approach? A French-only communications medium via our peer publication, L’Économiste, its radio alter ego, Atlantic Radio as well as Media 24, a French-only website constitutes its entire communications strategy, targeting 35 million Moroccans…

Was local management really targeting the millions of disoriented consumers, the thousands of families of those employees which had been made redundant and the tens of thousands of rural families deprived of one-third of their incomes by choosing these industry peers, or would it not have perhaps been better to have complied with the minimal union requirements regarding the French language which targets only the A and B+ socio-professional categories?

In this affair, Centrale Danone is not afraid of revealing its true nature, that of a colossus with feet of clay, which has behaved according to the idiom, ‘opportunity makes the thief’.

That is why the decisions should not be accepted by the public authorities and Centrale Danone should be held accountable to the government of Mr El Othmani who must now be prepared to take action…

(See page 11, Finance section, for Centrale Danone’s press release announcing its profit warning in respect of 2018 earnings)

Fahd YATA

Original article : https://lnt.ma/danone-boycott-de-se-moque-t-on/

The post Danone and the boycott, who is being made a fool of? appeared first on La Nouvelle Tribune.

The impact from public budget utilisation on economic growth and, inversely, revenue and expenditure elasticity as a function of the growth rate, will depend on whether each aspect of this reform process is successful.

Mention was made of this area of macro-economic analysis, highly important to a country such as Morocco which is rapidly modernising, by the Kingdom’s Treasurer General at a recent international symposium organised by Casablanca’s Hassan II University. Mr Noureddine Bensouda explained that “The essential functions of central government are resource allocation (central government intervenes directly in the process of producing public goods and services), redistribution (central government combats inequality) and stabilisation (central government deals with the effects of economic crises)”.

The benefits of good governance

Government intervention in the economy is carried out by various means.

First, central government and local government budgets have a direct impact, of course, on the economy’s functioning by impacting businesses and households.

Similarly, public spending contributes to corporate activity through public procurement and direct or indirect subsidies to different economic agents.

And even public debt generates revenue for creditors of the State (banks, insurance companies, investment firms).

That is why good governance of central government and local government budgets would improve the impact that they make on the economy.

For this to happen, budgetary governance has been at the forefront of budgetary reform in recent years. And, in particular, the reform of the Constitutional Bylaw governing the Budget Act (LOLF), which has made public policy transparent and understandable.

Indeed, the focus on governance is clearly defined by Article 39 of the LOLF. In particular, it specifies that the LOLF must consist of a programme that is based on a consistent set of projects or initiatives derived from the same ministerial department or institution.

This must be underpinned by well-defined goals on the basis of socially beneficial outcomes and, above all, on quantifiable indicators that make it possible to measure the anticipated results as effectively and efficiently as possibility and the quality of what has been achieved.

The LOLF makes it possible to “identify public policies and translate them into programmes”.

The central government budget is now structured into programmes that are linked to a strategy and goals which are monitored against appropriate indicators.

It’s simple: prior to this reform, the budget was structured by type of expenditure rather than by purpose as a means of costing public policy.

Public procurement has also greatly benefited from the introduction of budgetary governance, ensuring that public sector goods and services are produced, thereby generating growth. This is one of the main goals of the LOLF.

LOLF, performance remains an ongoing priority

The Constitutional Bylaw governing the Budget Act (LOLF), which is the veritable financial constitution of the State, primarily aims to improve State intervention by ensuring that public spending is effective, while performance remains an ongoing priority as well as service quality.

A culture of means in which budgets were routinely distributed between ministerial departments has now been replaced by a results-driven and performance-based approach.

This new approach can be seen in reforms made to budget classification, by which central government expenditure is now presented in terms of programmes, projects and initiatives.

The LOLF in Morocco has introduced an arsenal of mechanisms aimed at rationalising and optimising public spending.

Lastly, so as to remedy the issue of the low implementation rate for capital expenditure and its corollary, appropriations carry-over, the LOLF has restricted carryovers to 30% of payment appropriations for the annual Budget Act in question in respect of each ministerial department or institution’s investment budget.

Even before it was introduced 1 January 2018, this measure had the effect of substantially increasing capital expenditure under the central government’s budget, which reached MAD 67 billion in 2017 versus MAD 61.7 billion in 2016. It is therefore clear that the LOLF is organising “spending more effectively”.

As far as local and regional authorities are concerned, it is worth underlining that the new constitutional bylaws relating to the way in which they are organised financially reflect a similar goal, which is to speed up the pace of local budget implementation as well as reducing administrative supervision of project design processes, budget planning and implementation.

Budgetary governance may also be enhanced through the following reforms:

– Payment deadlines which introduce a time factor into managing budgets;

– Establishing integrated information and management systems which provide information on budget efficiency and transparency. These are also fundamental to accountability.

Public procurement, a critical role

Improved budgetary governance overall goes hand in hand with reforming public procurement.

Public procurement, in particular, the awarding of public contracts, is attracting interest from the corporate sector because of the high financial and economic stakes on offer.

Through public procurement, the central government’s primary aim is to produce quality goods and services, support growth by stimulating demand in favour of businesses and steer investment at the regional level.

In this respect, it is worth highlighting that “central government, as an economic agent, through public procurement, generates opportunities for wealth creation by businesses”.

In doing so, it must guarantee equal opportunities between them by ensuring that regulations meet international standards as well as being adapted to the Moroccan context.

This is precisely the aim underlying the reform of regulations regarding the awarding of public contracts, which came into effect 1 January 2014.

The new Public Contracts Decree has introduced a number of major innovations relating to the preparation, awarding and management of public contracts, including:

– Simplifying and clarifying procedures, in particular, by harmonising the legal framework for the awarding of contracts by public entities, which lies at the very core of the new regulatory system. The decree of 20 March 2013 shall now apply to contracts awarded by central government bodies, local authorities and public institutions as well as architectural services.

– Enhancing transparency, competition and equal treatment between candidates.

Public investment and growth, ‘could do better’

Public spending is one of the key components of demand and has a multiplier effect on economic growth, together with private investment and exports.

However, in Morocco’s case, according to an empirical study, the impact from public spending is ‘average’.

Indeed, it is worth noting that “economic growth in Morocco is positively correlated to public spending […]. Despite the positive impact from public spending on Morocco’s economic growth rate, the effect from this type of spending is average (0.37).

For every 1 percentage point increase in public spending, economic growth increases by 0.37 points.”

Factors explaining why public spending’s contribution to economic growth is only average include “the propensity to save, the propensity to import, the level of social security transfers and budgetary pressure”.

In addition, the above empirical study shows that the cause of the twin deficits lies in the fact that the effectiveness of capital spending is average and that the contribution from the economy’s degree of openness to growth is poor.

“The reasons for this are first, fiscal and second, trade-related.  Rather than stimulating economic activity, government spending simply exacerbates the trade and fiscal deficits.”

In addition, as far as the contribution from investment to economic growth is concerned, Bank Al-Maghrib and the Economic, Social and Environmental Council specify that “Morocco’s Incremental Capital Output Ratio (ICOR)” is not only very high but is still actually on the rise, reaching a level of 7 in 2014, while the global average is slightly above 3.

This would imply that investment generates less and less economic growth and, therefore, the resulting impact on the domestic economy is less and less effective”.

The Treasury’s assessment

Central government support for businesses, particularly SMEs, does not generate all the anticipated effects, largely due to the negative consequences resulting from payment delays regarding public contracts.

Despite the significant levels of central government injections into the economy in the production of goods and services, payment delays have snowballed. This is because payment delays are passed on from companies awarded a public contract to their suppliers…

By way of example, according to data published by the General Treasury of the Kingdom on government contracts, average payment periods over the period 2012-15 far exceed the regulatory requirement, varying between 138 days in 2012 and 2013, 156 days in 2014 and 146 days in 2015, while payment periods exceed 200 days for some ministerial departments.

One year on since this reform was adopted, the overall average payment period for central government has come down from 146 days prior to January 2016, the date that this reform became effective, to 55 days in 2017.

The same applies to local authorities, which has seen the average payment period fall from 142 days to 55 days. This substantial reduction in the overall average payment period is mainly due to the decrease in average payment periods at payment mandate issuers which have dropped from 140 days in 2016 to 51 days in 2017.

As far as public accountants are concerned, their performance in terms of approvals and payments has improved from 6 days in 2016 to 4 days in 2017.

The Integrated Expense Management (GID) system is one of the most important. It is a standardised joint budget and accounting information system that is used by everyone involved with expenditure.

The GID system aims to speed up processing for all types of public expenditure in compliance with current legislation, simplify and streamline the circuits and procedures for implementing it, reconcile the public accounts of the various stakeholders and develop the necessary reporting schedules so as to enhance decision-making.

In fine…

Improved budgetary governance, which has a positive impact on the economy and raises citizens’ living standards, will require simultaneous action in the following areas:

– Expenditure by central government and local authorities needs to be improved if the multiplier effect on economic growth is to become more effective

– So too, their resources, which should have an elasticity greater than one.

In conclusion, it is important to emphasise that by ‘spending more effectively’, the financial resources of central government and local authorities will be put to better effect.

Afifa Dassouli

Original article : https://lnt.ma/depenser-mieux-ameliorer-limpact-budget-leconomie/

The post ‘Spending more effectively’ to improve the Budget’s impact on the economy appeared first on La Nouvelle Tribune.

A positive reply to this question appears on the cards. Now, with the 3-year debt moratorium granted by the banks at an end, the company is once again confronted by a colossal MAD 6 billion mountain of debt. The company again finds itself with a noose around its neck in a situation which has become untenable…

 ‘Warrior’ Maghreb Steel must be saved!

Maghreb Steel, the nation’s steel maker, despite being restructured in 2014, is once again in serious difficulty. This, despite the management team, specifically recruited for the purpose, being able to turn around its business, as can be seen in the company’s EBITDA margin, which has consistently improved over the past three years.

The reason being is that the three-year memorandum of understanding (MOU) between the founding shareholder, the Sekkat family and its backers, the banks, came to an end this year.

And so, the time had come for all these bigwigs to sit down around the table to recapitalise the company and relieve it of its MAD 6 billion debt burden which has been weighing down the company and jeopardising its very survival.

With no solution reached to recapitalise the company, Maghreb Steel found itself having to meet the demands of the banks which have threatened to stop financing its working capital. Endeavouring to break the deadlock, management has continued to try to find an agreement with the banks, albeit unsuccessfully!

Mr Amar Drissi, Maghreb Steel’s Chief Executive Officer, who successfully saved the steel maker three years ago, has attempted every conceivable solution to save the company.

The first solution envisaged was to appoint an investment bank to identify a foreign industrial partner.

An international enterprise would have been the preferred choice given that Maghreb Steel is already a global concern and, as such, would have benefited from an alliance with a strategic player which would have given it its backing.

Such an enterprise, in addition to giving financial support, would have provided innovation, research & development and access to different markets, among other things.

There was no shortage of candidates from various countries, China and South Korea included, but the company’s heavy debt burden proved a major handicap!

Negotiations would have had to be conducted between a possible buyer, the banks and the company’s longstanding shareholder, to enable Maghreb Steel to finally achieve long-term debt sustainability.

And the outcome of all this is that a domestic solution has been found which is a merger between Sonasid and Maghreb Steel.

Both companies were recently restructured and now manufacture complementary steel products, the former, rebars and the latter, flat steel.

Understandably, the shareholders of the future merged entity are not yet known despite Maghreb Steel’s creditor banks being the ‘economic owners’ until such time as they have been able to recover their debtt.

A new national Moroccan steel maker is to be born which will most likely expand into Africa. Maghreb Steel, abandoned by its founding shareholders and whose financial health is at an advanced stage of disintegration, is going to be saved.

The history of the company’s bailout

Maghreb Steel’s balance sheet deteriorated in the following manner: Maghreb Steel had MAD 2.6 billion of capital, which, after making a series of losses at the operating level, had fallen to less than a quarter of that sum in 2014. As a result, the company was legally obliged to recapitalise within two years, without its operations being impacted.

To rectify this situation and, given the enormous structural losses accumulated by the company, the company engaged in creative accounting so as to reduce the size of its losses and to not have to increase its share capital.

The result is that, Maghreb Steel’s capital, after capitalising losses, today stands at only MAD 500 million.

It was for this reason that a memorandum of understanding was signed in 2014 between the company’s shareholders and the banks.

The MOU stipulated that the problem of indebtedness and insufficient capital should be put to one side for a three-year period to enable Maghreb Steel to engineer a recovery in its underlying business.

And to attain this goal, a new management team was appointed for this period.

It is worth recalling that this MOU was the result of the founding shareholders’ inability to recapitalise Maghreb Steel, despite their substantial investment, together with MAD 6 billion of bank finance.

Hence the strategy adopted was to separate the problem of long term finance from the challenge of reviving the business.

Today, three years on, with the MOU in question now at an end, there is no recovery plan in place with shareholders as far as Maghreb Steel’s financial situation is concerned.

Senior management, in its role as manager, finds itself in a situation in which the company’s underlying business is being negatively impacted by a lack of capital and the debt burden.

And as long as the issue of long-term finance remains unresolved, it will have an impact on efforts made by management to grow the business.

In concrete terms, Maghreb Steel, with the 3-year MOU between the banks and its shareholders, now at an end, has found itself in a situation in which its bankers are refusing to carry on financing the steel maker’s working capital just when its business is exposed to rising raw material prices.

Requested to repay its outstanding loans, the steel maker’s very future as a going concern is in peril since it is no longer able to meet the hefty interest expenses that result from such a level of debt.

Despite all this, over the past three years, its underlying business has recovered. Management adopted a new approach to managing the business which saw EBITDA move into the black after only two years.

And so, Maghreb Steel, despite its weak balance sheet, is genuinely viable from an operational standpoint.

Perhaps the most convincing indicator of this is EBITDA, which has risen from negative MAD 216 million in 2015 to MAD 200 million in the black in 2017.

Maghreb Steel has regained its status as the country’s steel maker. It provides MAD 1 billion of finance to customers and suppliers both upstream and downstream, thereby creating a veritable ecosystem within the flat steel market.

Its development is integral to the country’s industrial strategy. The expansion of the steel industry is entirely consistent with the Industrial Development Plan put in place by Minister Moulay Hafid Elalamy which aims to foster ecosystems.

Given Maghreb Steel’s strategic importance, its long-term survival is crucial. A merger with Sonasid provides a solution that not only bolsters the country’s steel industry but the entire ecosystem.

Afifa Dassouli

Original article : https://lnt.ma/maghreb-steel-sonasid-rapprochement-de-derniere-chance/

The post Maghreb Steel-Sonasid merger is last chance saloon! appeared first on La Nouvelle Tribune.

A simple notice published by the Casablanca Stock Exchange on 2^nd May recounted this transaction, which took place on 9^th May, according to the Stock Exchange.

Some clarification is required. The notice in question did not appear on the front pages of the Stock Exchange’s website, where details of the latest financial transactions are posted, such as CIH’s subordinated bond issue, the results of OCP’s perpetual bond issue and dividend distributions at Oulmes and Ciments du Maroc.

To find it, you had to be rather nosy, not to mention being familiar with the ins and outs of the stock market. You needed to go to the ‘Listed stocks’ link on the Stock Exchange’s website, select ‘Alliances’ from among the list of stocks and click on ‘Notices & Announcements’ which would enable you to find the article in question published 2^nd May under the heading, ‘Alliances: Capital increase by converting debt into equity!’.

And, what is more, the fact that ADI’s shares were not suspended since convertible bond holders were deemed to possess all the necessary information, there was a blanket of silence.

Specifically, the precise content of the notice, numbered AV-2018-043, announcing the transaction, was as follows: ‘Event: Capital increase by converting bonds at maturity into shares; Stock(s) in question: ALLIANCES.

The purpose of the issue mentioned in the notice was simply: ‘An increase in ALLIANCES’ capital by converting bonds at maturity into new shares’, stipulating that:

‘In view of the provisions outlined in the prospectus relating to the issue of bonds which may be converted into new ADI shares, as approved by the Moroccan Capital Markets Authority (CDVM) 17/08/2015, reference number VI/EM/023/2015; in view of the decision taken by ALLIANCES’ Board at its meeting 30/04/2018 and, in particular, the resolution relating to carrying out a capital increase by converting the convertible bonds’.

Mention was of course made of the features of the transaction including the type of transaction, which was to convert the bonds held by the convertible bond holders of the company in question into shares.

The new shares were issued at a price of 155.00 dirhams while the conversion rate was 100:155, with each new share having a face value of 100.00 dirhams, the same as that for each convertible bond.

Therefore, for 9,966,000 bonds converted, an investor would receive 6,429,660 new shares.

Or, in other words, a convertible bond with a face value of 100 dirhams, based on a conversion price of 155 dirhams per share, would equate to only 0.64 of a new share.

Applying this rate to 9,966,000 convertible bonds, 6,429,660 new shares would be created on converting ADI’s convertible bonds.

These, added to the 12,648,928 shares prior to this transaction, give a total of 19,078,588 shares following the capital increase, amounting to MAD 1.90 billion of capital.

These new shares, whose an entitlement date is 01/01/2018, will be listed 09/05/2018.

The important thing to remember about this transaction is, first and foremost, that it actually took place and that the bonds, issued by Alliances in 2012 and then rolled over in 2015, were actually converted into shares.

The envisaged conversion price in question, ‘determinable on the basis of a ruling at maturity’, would appear to favour the convertible bond holders who would have received far fewer ADI shares if the conversion price had been predetermined.

As it stands, Alliance’s founding shareholder has seen his stake diluted from just under 60% to 45%, despite remaining the relative majority shareholder. The convertible bond holders who are now shareholders in ADI are somewhat obliged to follow suit and retain their holdings, following the debt restructuring and business recovery, because none of them would wish to sell their shares at a price which is already trading at a discount to the 155 dirhams issue price.

And so, despite the free float doubling in volume, there is unlikely to be any improvement in market liquidity.

This transaction to convert ADI’s debt into equity is simply the penultimate step in the real estate developer’s deleveraging process. A prospectus is in the pipeline for another bond issue which is intended to roll over the outstanding debt as a result of a number of creditors refusing to accept property assets as dation-in payment.

This latest bond issue is expected to amount to more than one billion dirhams and is likely to be ‘guaranteed’. Its prospectus is apparently being reviewed by the AMMC which ought not approve it…

Afifa Dassouli

Original article : https://lnt.ma/alliances-suites-de-conversion-ora-actions/

The post Alliances, a surprising lack of info appeared first on La Nouvelle Tribune.

This bond issue, approved by the AMMC 23 April 2018, saw 50,000 securities issued, each with a nominal value of 100,000 dirhams. Subscription was reserved for Moroccan qualified investors, comprising institutional investors, mutual funds, insurance companies and other pension funds.

The subscription period, which was shortened to 3 days, closed last Friday and the results were highly satisfying.

OCP’s perpetual subordinated bond issue was 311% oversubscribed with applications received for as many as 155,480 securities versus the 50,000 on offer.

All subscriber categories were catered for with a higher pro-rata allocation granted to mutual funds. The latter, which had subscribed for 122,480 securities, were awarded 22,000 i.e. MAD 2.2 billion or 44% of the offering.

The other institutional investors accounted for the remaining 56% with the following breakdown: pension funds 22.6%, Caisse de Dépôt et de Gestion, which alone accounted for 20%, banks 9.4% and insurance companies 4% only.

The results of the offering also reveal that OCP’s allocation by tranche was consistent with its interest rate risk calculations. Pride of place given to the longer-dated tranches as can be seen from the manner in which the MAD 5 billion worth of subscriptions was allocated.

Demand for Tranche C, which has an annually adjustable interest rate, exceeded MAD 10 billion but only MAD 109 million was allocated to it.

Demand for Tranche E, with a 20-year maturity, totalled MAD 1.125 billion and was fully met, followed by Tranche D, with a 15-year maturity, which was satisfied to the tune of 84.4%.

As far as unlisted Tranche A was concerned, with a 10-year maturity, just under 90% of subscriptions were met, totalling MAD 875 million dirhams. This was not the case for Tranche B, identical but listed, which garnered just MAD183 million.

This second perpetual subordinated bond issue, similar to the MAD 2 billion issue of 2016, has to be seen in the context of OCP Group’s corporate strategy.

The offering was proposed by OCP’s Board of Directors of 14 March 2017 and approved by the Ordinary General Meeting of 22 June 2017.

This domestic bond issue, comprising several tranches, with principal of up to 5 billion dirhams (MAD 5,000,000,000), took the form of perpetual subordinated notes, listed and unlisted, with the risk premium increased at each ratchet up date. The purpose of the 2018 perpetual bond issue was the same as that previously issued, which was to continue financing the Group’s investment programme.

This is entirely in keeping with the Group’s corporate growth strategy, adopted in 2008, which aims to position OCP as market leader in its industry.

Three fundamental pillars underpin OCP’s strategy, which is designed to not only develop the business but to transform it, as follows:

To enhance its status as a globally competitive enterprise by asserting leadership on both the cost front and in terms of production capacity and, above all, by adopting a flexible and nimble approach to both manufacturing and sales.

These three pillars underpin OCP group’s industrial development strategy, which is supported by it 20-year investment plan, for the period 2008-2028 and a MAD 200 billion budget.

In concrete terms, the investment programme aims to double mining capacity (extraction and beneficiation of phosphate ore), triple chemical production capacity (manufacture of fertilisers), drastically reduce production costs along the entire value chain, and increase the Group’s penetration of every importing region and the largest markets around the world.

The investment programme is designed to be modular and flexible and to be implemented in phases, the first of which was completed in early 2018.

This first phase, which was focused on the Khouribga-Jorf Lasfar northern axis, consisted of bolstering extraction, beneficiation and production capacity at the Khouribga mine, which now stands at 44 million tons.

Likewise, for the Jorf-Lasfar chemicals platform, which now has a production capacity of 12 million tons, after construction of 4 additional fertiliser production units, JFC1, JFC2, JFC3, JFC4 (JFC stands for Jorf Fertiliser Complex).

During this first phase of OCP’s industrial plan, a supply pipeline linking the Khouribga mine to the Jorf Lasfar platform was built, to be able to transport the washed rock as pulp and to enable it to be transformed automatically in the different units.

This pipeline has generated savings in terms of transportation and energy costs, resulting in lower production costs.

The capacity at the Jorf Lasfar port was also expanded to allow for larger loads. A seawater desalination unit for industrial processes was built, thereby preserving the water table.

Such developments are designed to diversify OCP’s product portfolio and satisfy the needs of an increasingly broad range of customers by offering specific products, which are available in more than 40 formulas that have been developed to date.

Over the past 10 years (2008-2018), OCP Group has spent nearly MAD 75 billion in implementing Phase 1. The majority of the investment has been made over the past 5 years.

The forthcoming second phase will focus on the central axis (Gantour-Safi) and the southern axis (Phosboucraa) and will also aim to optimise production in a similar way to that achieved along the northern axis.

OCP is financing this major investment programme by debt as well as equity financing.

The programme is being strictly monitored by two credit rating agencies, Fitch Ratings and Standard & Poor’s, which are reviewing the financial strength of Morocco’s largest industrial group very closely.

The main role of both agencies is to ascertain and gauge the Group’s solvency as an issuer.

OCP is currently rated BBB- Investment Grade, the same as Morocco’s sovereign credit rating and the same as its industry peers.

The company’s decision to issue a perpetual subordinated bond on the domestic market is part of its strategy to optimise access to the capital markets and diversify its funding sources.

In particular, this type of very long-term finance enables the issuer to bolster its capital structure and meet the capital requirements of its rating agencies.

So much so that, so as to maintain the same level of long-term finance as part of the company’s capital structure, OCP intends to finance any eventual redemption of this bond, at the time of redemption, by issuing either equity securities or pari passu-ranked securities on terms that are at least equivalent to the redeemed securities’ level of capital, as mentioned in the prospectus.

The issue’s features:

OCP’s perpetual subordinated bond offering comprises five tranches. Each tranche has a ceiling of MAD 5,000,000,000 (five billion dirhams) and a nominal value of MAD 100,000.

The unlisted Tranche A has an interest rate that is adjustable every 10 years and a first repayment option on its 10th anniversary.

Tranche B, which is listed on the Casablanca Stock Exchange, also has an interest rate that is adjustable every 10 years and a first repayment option on its 10th anniversary.

The unlisted Tranche C has an interest rate that is adjustable annually and also a first repayment option on its 10th anniversary.

The unlisted Tranche D has an interest rate that is adjustable after 15 years for the initial period preceding the first repayment option and every 10 years thereafter, with a first repayment option on its 15th anniversary.

Lastly, the final unlisted Tranche E has an interest rate that is adjustable every 20 years and a first repayment option on its 20th anniversary.

The total amount raised from the five tranches shall not under any circumstance exceed the sum of MAD 5,000,000,000 (five billion dirhams). For each tranche, the ceiling is MAD 5,000,000,000 with a maximum number of 50,000 perpetual subordinated bonds, each with a nominal value of MAD 100,000, being the maximum number of shares permitted.

Careful consideration has been given to the chosen rate of interest for each tranche to enable each investor category to make a choice on the basis of the terms of their liabilities.

As a result, for the unlisted A and listed B tranches, the interest rate is adjustable every 10 years, benchmarked against the 10-year rate, determined on the basis of primary market Treasury bond yields with the same maturity as of 27 March 2018 i.e. 3.23% for the initial 10 years, plus a risk premium of between 80 basis points and 100 basis points i.e. between 4.03% and 4.23%.

This rate is fixed for the first 10 years, in the knowledge that the first repayment option date is 14 May 2028. However, the perpetual bond’s repayment option is hypothetical since the issuer may not in fact exercise it in exchange for offering a step-up, that is to say, an increase in the rate of interest rate which will be, as of 14 May 2028, +25 basis points for the unlisted tranches and, as of 14 May 2048, an additional step-up of +75 basis points for the listed tranches, which is also valid for Tranche C.

As far as the unlisted Tranche C is concerned, the interest rate is adjustable annually, benchmarked against the 52-week rate, determined on the basis of primary market Treasury bond yields as of 3 April 2018 i.e. 2.30%, plus a risk premium of between 70 basis points and 90 basis points i.e. between 3.0% and 3.2% for the first year. It is worth recalling that its first repayment option is 14 May 2018.

Tranche D, also unlisted, has an interest rate that is adjustable after 15 years until the first repayment date and adjustable every 10 years thereafter.

Its interest rate is adjustable, benchmarked against the 15-year rate, determined on the basis of primary market Treasury bond yields with the same 15-year maturity as of 13 March 2018 i.e. 3.67%, for the first 15 years, plus a risk premium of between 100 basis points and 125 basis points i.e. between 4.72% and 4.92% for the first 15 years. Its first repayment option will be 14 May 2033.

As of 14 May 2033, a first step-up (rate increase) of +25 basis points will be proposed by OCP, another of +25 basis points on 14 May 2038, and on 14 May 2053, an additional step-up of +75 basis points.

Lastly, Tranche E, also unlisted, has an interest rate that is adjustable every 20 years, benchmarked against the 20-year rate, determined on the basis of primary market Treasury bond yields with a 20-year maturity as of 27 March 2018 i.e. 3.98%, for the first 20 years, plus a risk premium of between 110 basis points and 130 basis points i.e. between 5.08% and 5.28% for the first 20 years with a first repayment date of 14 May 2038.

Of course, from 14 May 2038, a first step-up (rate increase) of +25 basis points will be introduced, a second from 14 May 2058, with an additional step-up of +75 basis points.

The perpetual subordinated notes are allocated by auction, which enables the issuer to select subscriptions that best match the rating agencies’ requirements as well as complying with the same requirements as for OCP’s international offerings, as a result of which the company has become a benchmark in terms of its risk profile.

Therefore, Tranche E’s interest rate is adjustable every 20 years, Tranche D every 15 years, Tranches A and B every ten years. Only Tranche C has a rate that is adjustable annually.

As a result, OCP is able to minimise the interest rate risk arising at each revision date…

Afifa Dassouli

Original article : https://lnt.ma/lemission-obligataire-docp-de-5-mrdh-sursouscrite-a-311/

The post OCP’s MAD 5 billion bond issue, 311% oversubscribed! appeared first on La Nouvelle Tribune.

6^th February 2016, its Chairman was appointed, Mr. Hassan Boubrik, previously Director of DAPS (Insurance and Social Welfare Directorate, Ministry of the Economy and Finance), the forerunner of the newly-established supervisory authority of Morocco’s insurance and social welfare industry. 

14^th April 2016, the Authority’s first Board meeting was held after all its members had been appointed or nominated, including three independent members, by order of the Head of Government.

The ACAPS Board has seven members, three of whom are women, Mrs. Fouzia Zaaboul, Director of Treasury and External Finance, Mrs. Nezha Hayat, AMMC Chairperson and Mrs. Imane El Malki, Magistrate at the Court of Cassation. A number of internal and external projects have since been launched with significant progress made.

Over the past two years, the Authority’s Board has sat on eight occasions, enabling the Authority’s work to progress at a rapid pace.

And, what has been important is that the internal modus operandi, including staffing, internal organisation and organisational structure, was drawn up and implemented quickly. A number of different projects have subsequently been initiated and are currently being carried out, primarily those involving information systems upgrade.

In its first year, ACAPS recruited 70 staff, including lawyers, inspectors, actuaries and financiers with experience of the insurance industry as well as computer scientists, many of whom have come from the private sector. While DAPS had a staff of 100, ACAPS currently employs 170 persons.

As the regulatory authority, ACAPS has managed to attract the talented personnel needed for it to assume its responsibilities effectively. The different projects carried out by the Authority include those related to digitising services, particularly for processing ​​claims or declarations of regulatory statements by entities that come under its supervision.

In this respect, mention must be made of the ‘Web’Inter’ software application, which provides a one-stop-shop, enabling insurance brokers to file declarations and carry out other administrative tasks (change of address, etc.).

This software application was finalised and introduced in December 2017, thereby enabling the Authority to receive reports from brokers and provide them with reliable and transparent feedback regarding their business.

It replaces paper-based declarations which used to sometimes cause problems from an operational point of view. Today, figures about production, fees received, etc., are available almost in real time, i.e. one week after the end of each quarter.

The information is not only easily exploitable but, more importantly, is very comprehensive.

The new insurance supervisory authority has also introduced a system for managing its documents digitally. Any information received in hard copy is scanned and archived.

Mail is computerised to enable easy access to documentation and ensure that discussions with all parties are digitised, so as to improve productivity and shorten deadlines.

With ACAPS now fully operational, its President, Mr. Boubrik, was kind enough to answer our questions during the following interview.

La Nouvelle Tribune:

Mr. Hassan Boubrik, the 5^th Insurance Convention, which opens this Wednesday, 4^th April 2018, deals with one of the key issues affecting the insurance industry, ‘disruption’, reflecting the various changes that have occurred. How does the regulatory authority intend to tackle these disruptive developments? 

Mr. Hassan Boubrik:

New technologies have caused major upheaval in every possible way. They have had a significant impact on financial services, particularly on the insurance industry.

These developments create extraordinary opportunities as well as presenting us, the regulatory authority, with a number of challenges. How does one take full advantage of the opportunities offered, while ensuring that policyholders are appropriately protected? What support should be given to insurance companies, particularly the distribution network, to enable it to adapt to these changes? Other issues such as personal data protection or cyber-risk must also to be taken into consideration.

You have headed up ACAPS for the past two years. Please could you tell us about the main changes brought about by this new authority to the insurance and social welfare industry?

It is first worth recalling that the Authority was established to provide the insurance and social welfare industry’s supervisory authority with the independence and flexibility needed to assume its responsibilities. In achieving, our country now complies with the highest international standards.

ACAPS is almost two years old. Since it was established, in addition to the numerous internal projects, it has also initiated a number of important regulatory projects. As far as the insurance industry is concerned, we first prepared a general authority circular aimed at consolidating and codifying the various regulations that were previously dotted among a large number of decrees, orders or circulars. This general circular also includes a number of important new features, particularly in terms of governance and the framework governing reinsurance.

This circular was reviewed by the regulatory commission in November 2016. It has also been approved by the Ministry of the Economy and Finance and is currently being reviewed by the General Secretariat of the Government (SGG). We are also working hard with SGG staff in the hope of publishing it in the Official Gazette in the very near future.

We have also drawn up a series of implementing regulations relating to catastrophe insurance, takaful insurance and builder’s risk insurance and decennial liability. All such regulations have been reviewed by the regulatory committee and submitted to the Ministry of the Economy and Finance for review and signature or ratification.

As far as the social welfare sector is concerned, we carried out a statutory inspection, at the end of which we published a report containing a number of recommendations which was submitted to the Head of Government. We have also worked in coordination with the Prime Minister’s office and with all stakeholders on the implementing regulations regarding extending social protection to non-salaried workers.

You spoke of new developments brought about by the general circular relating to reinsurance. Please could you tell us more about them?

This circular, when published, will bring about significant changes to the framework governing reinsurance. Change has become necessary given that the SCR’s statutory assignment has been abolished.

Reinsurance claims will, from now on, be accepted as cover for technical reserves depending on their rating. The Kingdom’s reinsurers will continue, however, to be treated in a manner consistent with the best ratings.

We are also abandoning the concept of approving reinsurance contracts beforehand, moving instead towards increased accountability by insurance companies’ decision-making bodies and a retrospective approach to inspection. From now on, each company’s Board will have to approve, within the framework of its solvency report, guiding principles and strategy governing its reinsurance policy. The latter will have to satisfy three criteria: having adequate risk cover (not letting risks exceed a company’s uninsured capacity), using local capacity appropriately and having a diversified portfolio of high-quality reinsurers.

What are the other new features introduced by the new general insurance circular?

This circular also introduces provisions relating to the rules for calculating and maintaining technical provisions, the aim being to ensure transparency and consistency with regard to these rules and to avoid situations in which certain companies might adjust their provisions so as to ‘massage’ their earnings (e.g. recognising more technical provisions when financial results are good or fewer provisions or making write-backs when financial markets and investment portfolios perform less well).

New rules relating to claims on brokers have also been introduced. Until now, the latter were provisioned at each company’s discretion, which led to somewhat questionable practices, resulting in a sharp increase in the inventory of such claims.

DAPS published a circular more than two years ago with the aim of introducing a little order and to begin tackling the problem.  This circular related to, among other things, insurance kick-backs.

Since the circular was published, additional rules have been introduced obliging companies to provision for claims on brokers for premiums that have not been repaid within the prescribed deadline.

Other rules include those relating to governance and accreditation of insurance companies’ directors and auditors.

Does the accreditation procedure for insurance agents and insurance brokers still apply?

Yes, because the bill of law making wholesale changes this regulation is still being reviewed by the General Secretariat of the Government.

Under the new legislation, insurance agents will not have to sit the exam, but insurance brokers will. The aim is to make companies more responsible for their agents in terms of training, qualification and support.

In the meantime, it is worth recalling that a professional exam has just been held in February 2018 with around 1,300 prospective insurance agents and brokers sitting the exam.

Candidates had to complete a computerised questionnaire (QCM) with eligible candidates then undergoing an oral test before a jury. Of the 1,300 or more candidates, 377 were admitted.

What about the new compulsory insurance contracts?

As I mentioned before, we have drawn up implementing regulations for these new insurance contracts and submitted them to the Ministry of the Economy and Finance.

This is indeed the case for catastrophe insurance which will soon affect a very large number of people. In fact, automobile insurance, for example, will include a compulsory clause covering any type of catastrophe, such as earthquake, flood, etc. This insurance will cover not only the vehicle and its occupants, but also the policyholder, spouse and dependent children, even if they were not in the vehicle at the time of the event.

A solidarity fund for catastrophes will compensate uninsured victims. It will be funded by the premiums paid in respect of this clause by insurance companies as well as by the Solidarity Insurance Fund.

I would also like to talk about builder’s risk insurance, construction insurance and decennial liability.

Builder’s risk insurance covers third parties for personal injury and damage to property arising during construction work (including damage to adjoining buildings). The prime contractor is also covered under this type of contract and will, from now on, be covered for any damage to the structure on completion of and/or during construction work.

Decennial liability provides investment protection for buyers and future owners. The fact that this insurance is compulsory will enable buyers and owners, should their building collapse or be in danger of collapsing, to be rapidly compensated without needing to identify who is responsible, regardless of whether they are civilly liable and solvent at the time of the catastrophe.

These compulsory insurance contracts, which will provide security to developers as far as their investment is concerned, are also likely to contribute indirectly to making the construction industry more professional and to improving construction quality by ensuring greater compliance with standards.

The legislation and other implementing circulars in respect of these insurance contracts are in the process of being approved by the Ministry of the Economy and Finance.

Regarding alternative insurance products, aren’t you a little late given that participatory finance companies are already operational? 

The process of drafting and adopting implementing regulations for takaful insurance is at an advanced stage. These regulations were drawn up by ACAPS after consultation with the sector and submitted to the Ministry of the Economy and Finance and the General Secretariat of the Government. Presentations have been made to the High Council of Ulemas because, as you know, its assent is required for any legislative bill or regulation as well as for products that come under the remit of takaful insurance and participatory finance. These bills are now being reviewed by this Council and we await its opinion. Once its opinion has been given, the insurance companies will then get involved…

Interview by Afifa Dassouli

Original article : https://lnt.ma/entretien-m-hassan-boubrik-5e-rendez-de-lassurance-lacaps-face-aux-defis-de-disruption/

The post Interview with Mr. Hassan Boubrik: 5th Insurance Convention, ACAPS facing a number of challenges posed by disruption appeared first on La Nouvelle Tribune.

At the meeting, the Group’s senior management provides a wealth of information and figures (see below). It’s not possible to mention BMCE Bank Of Africa, however, without first alluding to the statements of its iconic chairman, Mr. Othman Benjelloun.

BMCE Bank Group’s Chairman and Chief Executive Officer began his address by reviewing the Group’s development and progress since it was privatised in 1995. And although the banking business was doing well, dixit Mr. Othman Benjelloun, one had to be equally satisfied that BMCE Bank, since it was privatised twenty-three years ago, had seen its fundamentals register double-digit annual growth, rising five- to ten-fold!

Chairman Benjelloun also expressed pride in seeing the institution which he heads become a benchmark in terms of governance and financial soundness, thereby making a significant contribution to financing cornerstone projects as well as providing support to many of the Kingdom’s major corporations such as OCP.

Alluding to the various constants underpinning BMCE Bank Group’s ongoing development and success, Chairman Benjelloun highlighted the solid and enduring values ​​fostered by His Majesty King Mohammed VI and the Monarchy’s determination to constantly promote stability, modernity and an outward-looking Morocco.

Such constants, which engender progress and success, are highly appreciable at a time when the Kingdom is facing challenges that are common to other countries in North Africa as a whole, crises and conflicts that are afflicting a number of regions within the Mediterranean basin and populist movements that have taken continental Europe by storm.

As far as Africa is concerned, Chairman Benjelloun’s preferred continent, he notes that not only will Africa’s population reach 2.5 billion by 2050, but the continent will enjoy almost unlimited resources and potential. This is also true for China, whose population growth will roughly equal Africa’s by the middle of this century and which should see it emerge as the world’s leading economic power.

These promises and premises fully justify the strategic importance placed by BMCE Bank Of Africa on Morocco’s partnership with China and, in particular, the joint venture with major Chinese businesses regarding the Mohammed VI Tangier Tech project. The project, which requires investment of USD 11 billion, will see 100,000 jobs created and cover a surface area of ​​2,150 hectares with 300,000 inhabitants.

The Kingdom will therefore be one of the 70 countries to whole-heartedly embrace the ‘Silk Road’ project that has been already proposed by Beijing. BMCE Bank, consistent with these goals and ambitions, will open next October in Shanghai a bank whose purpose will be to finance Moroccans in China and Chinese in Africa.

Afifa Dassouli

Original article : https://lnt.ma/hauteur-anticipation-patriotisme-valeurs-porte-president-othman-benjelloun/

The post Noble-mindedness, foresight and patriotism, values that epitomise Chairman Othman Benjelloun appeared first on La Nouvelle Tribune.

The visit by the Moroccan Minister of Foreign Affairs had a dual aim. First, to inform the Trump Administration of the seriousness of the current situation in the ‘buffer zone’ in the Moroccan Sahara to the east of the Royal Armed Forces’ defensive wall, that is, in Guerguerate, Mahbès, Bir Lahlou and Tifariti, as a result of the Polisario’s provocations, in blatant violation of the September 1991 ceasefire agreements and their annexes.

Second, to present to the UN Secretary-General and the current Security Council President, tangible evidence of these violations, which had been underplayed, ignored even by Mr. Dujarric, Mr. Guterres’ spokesperson, at the start of this week.

It is worth noting that Mr. Bourita’s brief stay in North America coincided exactly with the publication of Mr. Guterres’ report on the Moroccan Sahara, which contained a number of positive findings as far as the Kingdom was concerned and several blatant and hostile prejudices as to our sacred cause.

It was as though the United Nations Secretary-General had wanted to produce a ‘balanced’ document, with little regard for either the truth or reality, as is so often the case in the corridors of the Glass Palace.

Yet, with Mr. Guterres enjoying his role as Pontius Pilate, the Kingdom’s response has been as lively as it has been swift. Mr. Bourita’s remarks to the UN-accredited press illustrate this perfectly.

It is worth noting, above all, that, the prior meeting between the Moroccan Minister and the acting US Secretary of State had enabled the Kingdom to obtain the support of the United States since, on that occasion, the Kingdom’s “positive and constructive” initiative (proposing greater autonomy for the southern province) had been reiterated by Washington.

This suggests, among other things, that Rabat had already sewn things up well before the Security Council meeting at the end of this month, which was to decide on whether or not to extend the MINURSO mandate.

The anaphora…

But, coming back to what Mr. Bourita said, it is worth noting that there was something new about his remarks, uttered with a new-found sense of determination not witnessed for such a long time.

Morocco’s Minister of Foreign Affairs, by royal decision undoubtedly, deliberately chose to put Algeria in a tight corner, face-to-face with its responsibilities, by stating loud and clear what everyone has known since 1975 (at least), but which language and diplomatic protocol have too often avoided recognising.

The Polisario is nothing but a puppet in the hands of Algiers’ leaders who, for several decades, have consistently opposed the Moroccan people’s just and legitimate cause of national unity. Which is what Mr. Bourita expressed perfectly when he uttered the anaphora: “It is Algeria which…”.

And if, until now, Morocco’s official diplomatic approach has more or less been to avoid direct (verbal) confrontation and accusatory allegations against Algiers, the time has now come to call ‘a cat a cat’ and invite the international community to measure the consequences, every possible consequence, of this new approach.

Because Bourita has taken up Ambassador Omar Hilale’s casus belli option, because Morocco has produced tangible evidence of Algiers’ and the Polisario’s intent to undermine the status quo that has existed in the Western Sahara’s No Man’s Land since September 1991, because the Minister of Foreign Affairs has presented other evidence which relates directly to the separatists’ actions, the possibility of war (or at least a robust military response) to clear the ‘buffer zone » of Algiers-backed mercenaries is highly conceivable.

Morocco will not tolerate any fait accompli from Algeria and its minions, whatever the consequences.

Such was the gist of the royal message conveyed to Mr. Guterres by Mr. Bourita, acting as go-between.

And if the powers that be at the United Nations had not until now fully appreciated the dangerousness of the situation and if the UN Secretary-General still intends to twist and turn to keep everyone happy, then Rabat reserves the right to act and react in accordance with the terms of the September 1991 agreements which Mr. Guterres may consult if he wants to.

In this affair, it is no longer a case of ‘being afraid’ to mention the influence of pro-Algerian lobbies, Western or African public opinion or the reaction of the international community.

Any advance made by the Polisario with a view to perpetuating its presence in the buffer zone will inevitably lead to others and will be perceived as a sign of weakness on the part of the Kingdom.

So, since it seems that there are a number of Spanish speakers among the Tindouf separatists, the famous slogan ‘NO PASARAN!’ should give them some food for thought.

Fahd YATA

Original article : https://lnt.ma/sahara-marocain-cest-lalgerie/

The post Moroccan Sahara: “It’s Algeria which…” appeared first on La Nouvelle Tribune.

The Convention, which is now a major national, regional and international event, has this year attracted more than a thousand participants from 36 countries, including 25 African countries.

Tanzania is the African ‘Guest of Honour’ country.

In the wake of His Majesty’s visit to Tanzania in October 2016, a number of partnership agreements were reached with this country, including one between the Moroccan and Tanzanian insurance federations.

It seems that the conference gets more innovative year by year. The main theme last year was the challenges posed by digital technology. This year, the main theme of topical interest to Moroccan insurers and their guests is disruption.

The era of ‘connected people’

If proof were ever needed, on show at the conference was a robot, ‘Beauty Face’, an unambiguous symbol of the technological revolution and the way in which artificial intelligence has taken our daily lives by storm, technology and AI being the main causes of what has become a major trend.

And, if the audience needed convincing or impressing of that, during the opening session, Beauty Face answered ‘live’ questions from Messrs. Mohamed Bensalah and Bachir Baddou, FMSAR’s President and Director General respectively.

Of topical interest, then, the concept of disruption was broadly defined by a variety of speakers during this inaugural session.

First and foremost, the global insurance industry is facing change and upheaval and undergoing pressures and profound changes that Mr. Baddou compared in his presentation to the way in which Uber has stormed the passenger transport sector (taxis, etc.).

As a result of the innovations, these so-called breakthroughs, the very concept of insurance is changing.

And customers are becoming increasingly demanding, requesting services and features that provide additional benefits and at a lower cost.

It is patently clear that the relationship between insurers and policyholders is changing. Indeed, relations are and will continue to be driven by a multichannel approach, using artificial intelligence in all its facets.

This explains why APEBI is one of the conference partners. The insurance industry, to be able to adapt, requires the expertise of companies specialising in new technologies.

In his welcome address, the FMSAR’s President, Mr. Mohamed Bensalah took the opportunity of mentioning those international partners which are sponsoring this 5^th Insurance Convention and which, unquestionably, are supporting the Kingdom’s insurers with this transformation process. These include the President of the French Insurance Association, Mr. Bernard Spitz, the President of the American Insurers Association, the Vice-President of the Japan Insurers Federation, as well as representatives of insurance markets in Africa.

In Mr. Bensalah’s opinion, the very future of the insurance industry will be determined by disruption. Insurers will need to explore, innovate and reinvent themselves to be able to deal with and integrate technology that has become ubiquitous in our daily lives.

According to President Bensalah, as a result of disruption, the industry will need to raise its game to come to terms with new technologies that are fast transforming the insurance industry, as evidenced by the growing number of people who use them, if not on a standalone basis, then at least alongside traditional insurance products.

The question posed at this conference is how will the insurance industry adapt to the requirements of these new connected populations and new technologies.

And one of the answers is that the profession must undergo a wholesale transformation as it will have to deal with new risks such as natural disasters, cyber risks, etc.

Disruption, a major revolution for humanity

In his address, the President of ACAPS, Mr. Hassan Boubrik defined disruption as “a word which comes from Latin, whose meaning refers simply to a rupture or break which upsets the nature of products and consumer behaviour. Disruptive change contrasts with incremental change, which brings gradual improvement to different sectors”.

“This revolution can be compared to the two most important disruptive revolutions experienced by humanity, the invention of writing and that of printing. It has something in common with these two revolutions, in that they all relate to information, how to convey it, store it and use it.”

Insurance is one of the industries in which disruption is likely to be felt most keenly.

The insurance industry’s very business model is being impacted.

In Mr. Boubrik’s opinion, as far as the development of the driverless car is concerned, the driver’s civil liability which will be insured but the manufacturer’s or software publisher’s.

Health insurance, on the other hand, is moving towards a system of individualised pricing, thereby undermining the sacrosanct principle of pooling insurance risk, as is the case with automobile insurance.

Insurers are fully aware of the challenges brought about by these changes and are therefore making digital acceleration one of their strategic priorities.

They are investing heavily in digital technology, buying into or tying up partnerships with ‘Insurtechs’ as well as establishing their own accelerators or incubators.

Insurtechs can be found along the entire insurance value chain as providers of technical services, brokers and, in some cases, insurers even.

In France, Alan, a new digitised end-to-end health insurer is the first independent insurer to have been granted an insurance licence in that country. This is proof indeed that digital systems are capable of breaking down barriers to entry in the most regulated of industries.

Mr. Boubrik suggested that it was important to retain a sense of perspective. While more mature insurance markets were already seeing disruption, new technological innovations were also responsible for disruption in Africa’s insurance markets. But as far as the latter was concerned, the issues at play and the manner of breaking with the past were not exactly the same as in developed countries and markets.

The domestic and African contexts

Driverless cars are not going to happen in the immediate future on our continent. Investment in Insurtech, of sufficient size at least, requires ecosystems and a certain level of funding that most African countries cannot afford.

Over the coming years, the major issue in Africa is going to be the increase in the penetration rate of insurance products.

The African market accounts for just 1.6% of the global market while GDP is nearly double that percentage. And, the simple fact of the matter is that Africa is largely under-equipped when it comes to insurance.

How can financial services, particularly insurance, be made available to a very large number of people who are currently deprived of them? How can reasonable products be provided that meet their needs and provide cover for their all-too-apparent risks?

The use of new technologies can significantly help us to achieve these goals.

And so, the kind of disruption that we will see in Africa is more likely to relate to the distribution and use of digital platforms and low-cost technologies so as to facilitate access to products.

New technologies are also likely to focus more on claims management and customer relations in general.

And that would already be a decent start because, as well as expanding access to insurance, it would also improve services to policyholders and restore consumer confidence in an industry which has a relatively poor image and in which there is a general lack of trust.

Lastly, we sense, at the end of this opening session of the 5^th Insurance Convention, that Morocco has become a platform for hosting high-level regional and international events.

The chosen themes for discussion relate to issues that are relevant to all countries. Disruption is clearly an important issue for the insurance industry.

But we cannot escape the fact that that there will be a cost to all this change, it will take time and the regulatory and supervisory framework will need to be bolstered.

Afifa Dassouli

Original article : https://lnt.ma/5e-rv-de-lassurance-de-disruption-de-concretisation-locale-africaine/

The post The 5th Insurance Convention: disruption and development at home and in Africa appeared first on La Nouvelle Tribune.

For a number of years, it has been the chief organiser of City Week, alongside official partners such as the City of London, TheCityUK and the Department of International Trade

It has partnered the UK government, the US federal government, the European Commission and the UN.

Its chief executive and founder, Mr. Maurice Button, was kind enough to answer questions put to it by La Nouvelle Tribune and www.lnt.ma on the occasion of City Week 2018 held in London 23^rd-24^th April 2018.

La Nouvelle Tribune:

City Week is an important event for the City of London. What can you say about Brexit, which is the main theme this year?

Mr. Maurice Button:

Brexit is indeed the overriding theme of City Week 2018.

Participants are interested in knowing more about the implications, from a financial point of view, of course, of the United Kingdom leaving the European Union.

And, as Mr Dombrovskis, the current EU Commissioner for Financial Services, said this morning, we could expect to secure the same advantages and terms as those granted by the European Union to third party countries such as Switzerland for example.

However, as the Swiss Deputy Minister of Finance said yesterday, what is currently being granted to his country is hardly advantageous, primarily because the measures are short-term.

If such was the content and scope of the agreement reached between the United Kingdom and the EU in financial services, then that would be neither adequate nor positive.

By contrast, here in London, it is felt that the financial agreement should be part of an international financial services strategy, with the possibility that London as a financial marketplace is given greater access to European markets as part of a mutually beneficial arrangement.

Admittedly, our discussions and analyses in the context of this year’s City Week show that the various points of views are still quite far apart as to the possibility of reaching a Free Trade Agreement with the EU, particularly when it comes to financial matters.

Experts and specialists in the City are of the opinion that a mutually satisfactory solution is achievable but, for now, nothing is certain, and we will have to wait further.

One of the consequences of Brexit would be to broaden the scope and influence of London as a financial marketplace?

Certainly, if only because it’s clear that, the world’s major financial centres are today outside continental Europe.

And this morning’s speakers at City Week, including Europeans, all agree that the City will remain at the financial heart of the Old Continent.

Indeed, there is a growing concern among experts, British and European alike, that international finance’s centre of gravity is shifting from London to New York, Singapore or Hong Kong, which would be damaging to both the United Kingdom and Europe.

Because, no one can deny the possibility that one of the unexpected consequences of Brexit would be to give a decisive advantage to a financial centre outside European territory.

But couldn’t Paris or Frankfurt take London’s place?

I believe that London is irreplaceable for many reasons. Remember that the City has a concentration of intellectual capability like no other when it comes to financial skills, not to mention the networks and financial circuits that have been woven together over the years. In addition, London is much larger in terms of size and the City is, for all these reasons, in a very strong position.

Lastly, let’s not forget that those regions and centres registering the strongest economic growth are generally not in Europe, far from it, but are rather other geographical regions around the world.

The major opportunities generated by these regions and here, I’m thinking China, India and Asia’s tiger economies, will not be heading towards the financial centres that you mentioned. The ties are already in place with the City of London and that will not change after Brexit.

But what about the prospective threats in terms of regulation, taxation, etc.?

That will depend on the sort of Free Trade Agreement that is reached with the European Union.

Some advocate what is called a special ‘enhanced equivalence’ arrangement, that is, an agreement based on reciprocity and mutual benefit between the UK and the EU.

We are currently playing a waiting game. Only time will tell what options will be available when it comes to fostering new relations between Great Britain and the European Union.

What do you know about Casablanca Finance City?

I know Casablanca Finance City very well in fact because of its prior participation in City Week in previous years.

I know and appreciate CFC’s success and I understand that a growing number of people regard CFC as an essential gateway into Africa, which is something we appreciate in the City.

CFC offers considerable benefits in terms of its appeal, particularly tax incentives, which represent great opportunities for the financial circles in question.

What about the partnership between the Casablanca Stock Exchange and the London Stock Exchange?

I believe that this partnership is important in raising the Casablanca Stock Exchange’s profile and providing corporates, financial institutions and investors with the services that they are entitled to expect from a major financial centre.

Interview conducted by Afifa Dassouli, London

Original article : https://lnt.ma/city-demeurera-premiere-place-financiere-atout-lue-egalement-selon-m-maurice-burton-ceo-de-city-financial-global-ltd/

The post The City will remain the world’s leading financial centre, an attribute for the EU too, according to Mr. Maurice Button, Chief Executive of City & Financial Global appeared first on La Nouvelle Tribune.

Sponsored by leading financial institutions, investment banks, investment funds and insurers, City Week is an event which has the full backing of London’s leading financial players, City & Financial Global, the City of London, TheCityUK, the Department for International Trade, UK Finance and Business is GREAT.

Attended by the finance industry’s bigwigs

This year’s event is attended by more than three hundred personalities from the world of business, finance, banking, insurance, consulting, audit and corporate law, as well as the press and academia, from all over the world, including the Commonwealth, Asia, Africa, Europe, North America and the Gulf.

This forum provides, of course, an opportunity to analyse, reflect on, inform and learn about the issues and challenges facing global finance, particularly the City of London which, despite the vagaries of British politics, is making every effort to maintain and bolster its dominant position in the highly competitive field of international financial markets.

That’s why City Week is such a popular event for all those in search of investors, those looking for investments, those who offer advice, those who are concerned about regulation or deregulation, those who advocate the UK distancing itself from Europe, those who regret the process of separation triggered by Brexit, those who wish for Article 50 of the EU Treaty and those who refuse to see it applied.

During City Week, in addition to the many meticulously organised conferences and workshops at which each speaker is respectful of his or her allotted time for speaking, a space is set up in the centre of the Guildhall for the major institutions from the world of finance to ‘hold court’, advertising their services to participants, thereby transforming City Week into an exceptional venue for  ‘B-to-B’ meetings, as productive as they are numerous.

The main talking-point of the 2018 forum, as was the case last year, is the major event with which the United Kingdom has been confronted since the June 2016 referendum, Brexit, which affirms the wish of the majority of the British people to leave the European Union.

Brexit or no Brexit…

The City of London has not yet recovered from this political tsunami, which may yet threaten its status as the world’s most attractive financial marketplace. It was against this backdrop of Brexit and its consequences that the discussions and workshops took place during the two days of this forum.

But finance people are a pragmatic lot. They are not in the habit of feeling sorry for themselves or giving up. One of main reasons for holding City Week in late April was to show the world that an international financial services forum of this kind held in London was still highly relevant.

Indeed, the City is the ideal place to try out the best and most effective innovations in finance, through ‘fintech’, that is to say, the emerging financial services sector which leverages technology as a means of improving financial operations, as well as ‘insurtech’, risk management, compliance, etc.

During City Week, three essential watchwords provided the common thread running through many of the workshops – ‘global outlook, efficiency and liquidity’ – which happen to be the cornerstones of London’s very existence as a financial centre.

Because this marketplace now has to live with the realities of Brexit, whose consequences are well known and feared by many, British financiers want to prove that Brexit offers an opportunity to diversify and expand their range of services and products and to foster closer ties with every financial centre on the planet.

Not to mention the fact that the City intends to develop new productive relations with the European Union, without losing the attributes and advantages that it hitherto possessed prior to the referendum to leave the EU.

It could be said therefore, somewhat tongue-in-cheek, that Brexit or no Brexit, the City wants to ‘have its cake and eat it’!

A win-win situation for all concerned!

That is why, as negotiations between the European Commission and Mrs May’s government enter an active and serious phase, the aim of City Week 2018 is to provide a clear and pragmatic response in terms of ‘enhanced equivalence’, meaning, establishing a win-win partnership between the United Kingdom, now looking to broaden its horizons and a European Union that is incapable, in the near future at least, of replacing or usurping the City’s pre-eminent position in global financial services.

A determination to adopt a pragmatic and realistic approach to overcoming or circumventing political decisions was the overriding theme underpinning each debate and workshop during the two days of this forum, which was peerless in terms of the quality of the speakers and participants.

But, above all else, what was evident during this City Week was London’s tremendous ability as a financial centre to respond and adapt to international, European and local developments, fully intent on maintaining its status as the world’s leading financial marketplace.

The City is clearly reflecting on, acting on, planning and organising its transformation, extending its scope, proposing financial and other innovations so as to continue to retain its appeal, which has hitherto been its strength.

By organising such a forum, it has opened its doors to all the ‘movers and shakers’ in global finance, operators, investors, experts and institutions, ensuring that they are fully aware of the efforts made to maintain the City’s leading status and that it is indeed remains ‘the place to be’.

London, Casablanca, simply no comparison!

Observing such dynamism at first hand, the myriad of initiatives made on an ongoing basis, this ability to constantly re-evaluate the situation, a determination to move forward whatever the obstacles encountered, one cannot help but think that London as a financial centre has truly discovered a means of self-sustainability

One cannot help but draw the comparison with the ‘initiatives’ of our own domestic institutions and decision-makers responsible for developing the Casablanca marketplace.

While the City opens its doors and welcomes all-comers on ‘home turf’, offering a comprehensive range of services, innovative tools and the most attractive products, we Moroccans, by contrast, prefer to huddle together in closed circles, conducting road-shows among ‘familiar faces’, which, despite taking place in London or New York, are generally unproductive, simply content to ‘market Morocco’s stable institutional framework’, which itself exists in spite of the institutions and those responsible for our domestic financial services industry!

London cannot of course be compared to any local financial centre with simply regional aspirations. But the City proactively and pragmatically endeavours to offer more and better. Casablanca, by contrast, is simply content to present a ‘three-year development plan’, accompanied by sanctimonious vows and false promises.

A ‘global outlook, efficiency and liquidity’, such are London’s three attributes, which are but a pipe dream for Casablanca!

DNES in London

Afifa Dassouli

Original article : https://lnt.ma/city-week-2018-brexit-londres-restera-pole-position/

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Succeeded by Al MADA, the Group has been rebranded under the eye-catching slogan, ‘Positive Impact’. This is highly significant because this slogan embodies a number of fundamental strategic implications for an investment fund whose remit is international, particularly African and whose reference shareholder is none other than the royal holding company, Siger.

Its new logo, which has a clean-cut yet powerful graphic design, is in different shades of green with a stylised ‘M’ which expresses, with its three branches and two dots which complete it, a sense of movement implying continuity and sustainability as well as inspiring confidence and responsibility. This new logo reveals the full import of AL MADA’s intrinsic nature, while the Arabic term means ‘scope, time, impact’.

Exit then SNI, whose company name was no longer apt for implementing the strategic decisions taken by the holding company’s shareholders in 2014, in choosing to develop the Group’s investments and business activities in Africa and overseas.

This change has proved to be not only sensible but pragmatic since, just three years on, more than 27% of SNI holding company’s earnings are derived from overseas, primarily from Africa, versus 11% in 2013. Corporate strategy, which, until 2014, was largely focused on the domestic market, has since embraced the African adventure resolutely, with the continent becoming a growth engine for Moroccan companies eager to expand overseas as well as a catalyst for economic development in both Africa and Morocco.

AL MADA’s founding is entirely justified considering how successful and effective its African subsidiaries are in banking, insurance, mining, solar and wind energy, cement manufacturing and automotive distribution, among others.

Given its past successes, which are best illustrated by the Group’s earnings, new operations are in the pipeline or are already underway such as the insurance business in Tunisia and in Egypt, solar energy in Senegal and mining in a number of African countries.

As well as being essentially an African group, AL MADA is strongly committed to CSR and social causes, which is entirely consistent with its ‘Positive Impact’ slogan.

This newly-created holding company is clearly determined to strive to generate wealth for the peoples of Africa and the Moroccan people. The Group’s employees can take pride in working for an organisation that upholds these values and adopts such an approach.

Al MADA also aims to foster strong relations with its employees who contribute to its success. Its status as a role model within the domestic and African economy makes it an attractive employer for the many skilled and able Moroccans that live in our country and around the world.

Now more than ever, AL MADA wishes to continue to work hand in glove with domestic entrepreneurs and investors. Even in its former guise, SNI intentionally chose to invest in capital-intensive and high-risk projects.

AL MADA is particularly interested in investing in those strategic sectors, in Africa of course, which have fast become a battlefield for global heavyweights such as Russia, the United States and China. It is eager to participate in the multi-sector helter-skelter development of a continent which is still almost entirely untapped; a continent in which Morocco and AL MADA, its would-be growth engine, justifiably aspire to take their place and their share, their rightful place and their full share!

In the domestic market, which is equally important from a strategic perspective, AL MADA’s role is that of an investment fund, investing in sectors that are under attack from multinationals which have far too often considered our country to be a cash cow!

Last but not least, AL MADA will compete with major international investment funds, especially those from the Gulf, thereby affirming loud and clear that Morocco’s ‘big business’ is not afraid of going head-to-head with other players on the global investment stage.

AL MADA, which officially begins its new life today, already benefits from its predecessor’s achievements, that is to say, operations in 24 African countries and an existing investment portfolio worth MAD 6.5 billion. But, in the future, this long-term pan-African private investment fund intends to categorically surpass those achievements, driven by a vision and a strategy that will benefit Morocco and the entire African continent and their peoples, in accordance with the express will of our Sovereign, His Majesty King Mohammed VI.

Fahd YATA

Original article : https://lnt.ma/sni-cest-fini-al-mada-locomotive-developpement-africain-national-lui-succede-jour/

The post SNI, it’s over! Succeeded by Al Mada, a domestic and African growth engine appeared first on La Nouvelle Tribune.

Mr. Nasser Bourita, Minister of Foreign Affairs, Mr. Omar Hilale, Morocco’s Permanent Representative to the United Nations and Mr. Saad Eddine El Othmani, Prime Minister, in turn, issued serious warnings to the Algiers-backed mercenaries, who are guilty of serious provocations, first in Guerguerate, and then in the No Man’s Land located between the Royal Armed Forces’ frontline and the Algerian border, in the south-east of the Kingdom.

Unrelenting provocation

At the Guerguerate border post in the direction of neighbouring Mauritania, the Polisario’s militia has hindered the movement of cargo vehicles heading south on a daily basis and has continued to behave in a manner which has caused serious tension in recent months, refusing to give in to the withdrawal orders issued by UN Secretary General, Antonio Guterres.

The separatist leaders, which have adopted an extremely threatening stance, have openly shown that they are intent on lending credence to the fallacious theory of a “state inside a liberated zone”, which would be governed from the observation posts occupied since 1991 by the MINURSO at Bir Lahlou and Tifariti.

It is well known that when the ceasefire was declared in 1991, Morocco accepted the creation of a buffer zone in the south-eastern region of the Southern provinces, provided that there was no incursion by the Polisario’s militia or the Algerian army and that the zone was placed under the supervision of the MINURSO.

The separatists have announced that “ministries of sovereignty”, including a Ministry of Defence, will soon be transferred from the Tindouf camps to one of the two aforementioned places.

Such a decision is indeed in blatant violation of the ceasefire agreements and the commitments made at that time under the supervision of the United States and France.

Algiers and the Polisario, who have suffered a series of diplomatic setbacks since Morocco re-joined the African Union, are clearly looking to heighten tensions again, less than a month before the UN Secretary General presents his annual report to the Security Council at the end of April, with a view to extending or repealing MINURSO’s mandate.

And, according to a number of ‘calculated’ indiscretions, it would appear that the draft report is somewhat favourable to Morocco …

Faced with such a situation, the Kingdom is faced with a triple option.

The three options

It could simply ignore the shenanigans and provocations of the Tindouf mercenaries, showing that it was insensitive to their bluff, relying instead on Mr. Guterres’ wisdom and the sense of responsibility for which Security Council members are generally renowned.

But, a major disadvantage would be that the establishment of a ‘sovereign state’ within Morocco’s own borders might come to be accepted as reality rather than pure fiction, placing the separatists on par with the Kingdom, a State constituted more than twelve centuries ago! Since November 1975 and the glorious Green March, Morocco’s sovereignty over the southern provinces has never been undermined and there can be no question of ever accepting such a fait accompli.

The second option would be to influence the UN decision-makers and the Security Council’s permanent members so that they urge the separatists and their ‘leaders’ to come to their senses and cease provocation, which would otherwise result in a situation that was irreparable.

This would seem to be the Kingdom’s preferred option, if the firmness and seriousness of the warnings given by Morocco (Bourita, Hilale and El Othmani) last weekend and the way in which the political parties have come together on the home front, are anything to go by.

But there is no guarantee that the warnings made by our officials will be quickly followed up by action, while the deadline of the end of April is not far away.

And Moroccans are probably beginning to think that Algeria and its Tindouf puppet have finally opted for an open crisis to oblige the Kingdom, volens, nolens, to come to the negotiating table.

But, if, as the saying goes, “the camel driver knows exactly what the camel is thinking” and Rabat has seen right through this strategy waged by Algiers and the mercenaries, it cannot be ruled out therefore that our country, certain of its rights and the fact that the separatists have indeed violated the 1991 agreements, considers it to be casus belli and takes the provisional military measures that such a situation requires.

At the present time, we can therefore rule out the hypothesis of a robust and definitive military response from Morocco which would put an end to these provocations by the Polisario by cleaning out Guerguerate, Bir Lahlou and Tifariti in one fell swoop.

It is well known that the Royal Armed Forces have the means, if not the burning desire (!!!). The fact that they hold the balance of power is beyond any doubt.

Therefore, “si vis pacem, para bellum” (If you want peace, prepare for war).

Fahd YATA

Original article : https://lnt.ma/maroc-polisario-guerre-possible/

The post Morocco, Polisario, why war is possible… appeared first on La Nouvelle Tribune.

This method of financing, known as ‘crowdfunding’ or collaborative finance, has grown rapidly around the world in recent years.

This bill, numbered 15-18, may be consulted by the general public on the SGG website, with the consultation period running from 21^st March to 19^th April 2018. Comments and observations are invited from anyone before the final version is drafted.

And the Moroccan Capital Markets Authority (AMMC), the body primarily responsible for legislation relating to the financing of the economy by capital raised from the general public, is tasked with generating maximum visibility for this bill so as to ensure that it is complete, prior to parliamentary review.

Aims and legal framework governing crowdfunding

First and foremost, it is important to understand that collaborative finance takes place directly and transparently between entrepreneurs and contributors via online platforms.

There are three types of collaborative finance activity: loans, capital investment and donations.

As far as implementation is concerned, collaborative finance is governed by a legal framework which aims to:

– Attract new sources of funding for micro-enterprises, small and medium enterprises and young innovative entrepreneurs;

– Encourage the Moroccan diaspora to participate actively in the country’s development via a simple, secure and transparent funding mechanism;

– Support civil society by financing projects which have a strong social impact, and which foster human development;

– Free up young people’s creative and cultural potential;

– Enhance the country’s appeal and influence as a financial centre.

This legal framework governing crowdfunding oversees the creation of collaborative finance companies (SFCs), tasked with carrying out the different types of crowdfunding.

The purpose of the collaborative finance bill is to define the legal framework governing the different types of collaborative finance carried out by collaborative finance companies (SFC). To achieve this, the bill provides a comprehensive set of regulations for these activities, including:

• Establishing the status of the collaborative finance platforms (PFC) manager, in this particular instance, the SFCs, which is similar to other frameworks governing capital markets activities;

• Defining a system for accrediting SFCs by the Administration and supervising collaborative finance activities, which will be carried out by Bank Al-Maghrib in the case of loans and donations and the Moroccan Capital Markets Authority in the case of capital investment activities;

• Defining procedures and methods by which PFCs are established and function;

• Defining the responsibilities and obligations of SFCs in terms of public information, advertising, reporting etc.;

• Defining the rules for checking projects which are to be financed beforehand, rendering transfers secure and protecting contributors;

• Setting limits in terms of the amounts raised by project and by contributor for each type of collaborative finance;

• Defining specific rules for each of the three types of collaborative finance.

It is worth noting that the bill also provides for the possibility of establishing participatory collaborative finance platforms (PFCPs) so as to be able to carry out Sharia-compliant collaborative finance.

Specific features of the bill

As crowdfunding is a new and original initiative for our country, the bill governing its creation contains a number of important details.

Article 4 of the bill specifies that collaborative finance, which is carried out via PFCs, may be conducted in Morocco, in a free zone or in a foreign country. Funds may be denominated in foreign currencies and contributions may originate from resident or non-resident contributors, subject to foreign exchange regulations.

In addition, regardless of the type – loans, project finance or donations – the terms and conditions that would normally apply, as prescribed by previous legislation, are not applicable in this case, as stated in Article 5:

“The provisions of Act No. 44-12 relating to public offerings and the information required of persons and organisations making public offerings, shall not apply to collaborative finance transactions”.

“The funds paid in by contributors in respect of a collaborative finance transaction are not regarded as funds received from the public as defined by the provisions of Act No. 103-12 relating to credit institutions and similar organisations”.

Collaborative finance transactions, under the ‘loans’ category, are not regarded as credit transactions or transactions which are similar to credit transactions as defined by the provisions of the aforementioned Act No. 103-12.

Collaborative finance transactions, under the ‘donations’ category, are not subject to the provisions of Act No. 004-71 relating to appeals to the public’s generosity.

Since loans and donations from crowdfunding are supervised by Bank Al-Maghrib while appeals for funds for investment are the responsibility of the Moroccan Capital Markets Authority, SFCs which manage one or more PFCs are required to apply for accreditation either from BAM or the AMMC. Each supervisory authority has up to 45 days to validate or reject the application for accreditation.

In addition, collaborative finance companies, as profit-making enterprises, are obliged to state that crowdfunding via online collaborative finance platforms is their main business activity. They must also be domiciled in Morocco and have share capital of at least MAD 300,000, which must be fully paid-up on constituting the SFC.

Some of the obligations of SFCs 

In carrying out its business, SFCs are subject to a number of obligations, the most important of which, drawn from the bill’s various articles, are as follows:

• Provide the public, clearly and comprehensibly, with all the necessary information relating to the PFC’s functioning, including eligible projects, the terms and conditions of selection and the SFC’s terms and conditions of remuneration;

• Inform the public, clearly and comprehensibly, of the operating procedures for each category of collaborative finance, the related risks, the resulting commitments for the project’s contributors and promoter(s);

• Ensure that collaborative finance transactions comply with the provisions of this Act and the management regulations, particularly those relating to the type of project to be financed and the suitability of the project’s contributors and promoter(s);

• Inform the public, clearly and comprehensibly, of the characteristics of each prospective project and the financial terms and conditions specific to the proposed collaborative finance transaction. The information shall primarily relate to the terms and conditions for releasing the capital and making it available to the entrepreneur, the terms and conditions of remuneration and the repayment of contributions.

In addition, an SFC shall specify on the PFC home page, clearly and comprehensibly, as well as in all correspondence and advertising media, its company name, head office address, email address, trade register registration number, accreditation references as well as the account holder’s name and address. Lastly, the SFC must prepare an annual report within three months of the financial year end for each PFC it manages.

About collaborative finance transactions

The collaborative finance bill, in Article 43, specifies that the contributions collected in respect of collaborative finance transactions shall be exclusively assigned, in accordance with the SFC’s management regulations and the project prospectus, to the envisaged project.

As far as the size of the investment and contributions are concerned, the bill specifies, in Articles 45 and 46, that:

• The amount raised in respect of a single project, which qualifies as a collaborative finance transaction, may not exceed the statutory ceiling for each collaborative finance category of five (5) million dirhams.

• The cumulative contributions from an individual in respect of a single project may not exceed the statutory ceiling of 250,000 dirhams.

• The cumulative contributions from an individual, at the end of a calendar year, in respect of collaborative finance transactions may not exceed the statutory ceiling of 500,000 dirhams.

• Individual contributors who are angel investors are not subject to the aforementioned ceilings.

SFCs, which come under the ‘investments’ category, are subject to AMMC supervision, the terms and conditions of which are stipulated in Article 64 of the bill as follows:

• SFCs which manage ‘investment’ category PFCs are subject to AMMC control in accordance with the provisions of Act No. 43-12 relating to the Moroccan Capital Markets Authority;

• The AMMC shall ensure that the companies referred to in the previous paragraph comply with the provisions of this Act, the implementing legislation, AMMC circulars and well as all applicable legislation and regulations;

• As part of its supervisory responsibilities and in accordance with the provisions of the aforementioned Act No. 43-12, the AMMC is authorised to conduct on-site inspections by any sworn agent, specially appointed for this purpose, of documents belonging to SFCs within its supervisory remit.

• The AMMC may also ask SFCs to submit any type of information required for it to be able to assume its responsibilities. It shall define a list, content, reporting format, frequency and deadlines.

Lastly, the collaborative finance bill, which comprises more than 75 articles in total, understandably includes provisions relating to the penalties imposed on those who commit violations. The penalties will be disciplinary for certain offences and criminal for the most serious violations.

The attractiveness of such a bill is evident to those who have witnessed the multiplier effects of crowdfunding transactions abroad, catalysed by both the internet, which has proved an invaluable tool, and the fillip provided by different social networks to a number of legitimate social causes and entrepreneurs with noble, humanitarian, or altruistic aspirations.

As far as the participatory aspect of investing is concerned, collaborative finance appeals primarily to young entrepreneurs and start-ups looking for business angel-type funding.

The public authorities’ willingness to organise a one-month public consultation period (from 21^st March to 19^th April) for this project is as welcome as it is smart.

Afifa Dassouli

Original article : https://lnt.ma/projet-de-loi-crowdfunding-ouvert-a-consultation-publique-demarche-constructive/

The post Crowdfunding bill open for consultation, criticism, proposals appeared first on La Nouvelle Tribune.

Of course, the government ‘governs’, parliament ‘parleys’ and ministers ‘administer’, but it is a far cry from an environment that is conducive to getting things done, from a sense of dynamism, a willingness to act and a lack of impetus ‘from on high’, which so often provides a fillip…

By contrast, the main issues and conversations are dominated by fake news and rumours, not only among the vulgum pecus but, also, at the very highest echelons of power, whose strategic departments are beset by a sense of torpor.

While the performance of the tourism industry is more than respectable, a department such as the ONMT has not had a General Manager since the beginning of autumn 2017. The Kingdom’s renewed appeal undoubtedly owes much to external factors but is that reason enough to leave this institution waiting for an actual boss?

The same question applies to the Press Council, which we have been promised for ages. Everything is ready, we are assured by the Department of Communications, except that the candidates, aside from SNPM apparatchiks, are not exactly plentiful, particularly for the Directors of Publication college, while the written press is dying a slow death and the new contract program with the State shuttles back and forth between the various administrative departments…

What can one say about the ‘major issues’ that galvanise public opinion, reduced, unfortunately, to the antics of a few lawyers in need of personal advertisement, for never-ending trials, which perpetuate the lack of interest and sense of weariness…

What about the sackings endured by the brightest of Morocco’s female intelligentsia such as Dr. Asma Lamrabet, guilty, in the eyes of some old codgers, of expending her mental faculties in advocating ijtihad?

Beyond the various debates on job creation, how can one expect unemployment to fall when GDP growth remains hostage to rainfall and is, when all is said and done, still too weak to ensure a genuine economic recovery?

What about the ongoing climate of social tension, as illustrated by the recent happenings in Jerada, while trade unions make their presence felt on the eve of Labour Day?

Who cares whether it is simply play-acting or a genuine desire to do battle, knowing full well that neither the State budget nor corporate treasuries are able to meet the wage demands of labour organisations which, deserted by the activists, are less and less representative.

And what about Management, which seemed to enjoy a bright spell under the rule of a certain Lady, but which now finds itself waiting for the ‘right candidate’?

Where are the political parties, apart from the PJD, which is gradually clearing its ranks of the Benkirane lot and the RNI, which is diligently preparing for a leading role, which the other parties, limp, lifeless, demoralised and occasionally disowned, will not be able to deny it in a few months’ time?

What has happened to our sacred cause of national unity and the defence of our territorial integrity, just a few weeks before the report of the United Nations’ Secretary-General is published, which will recommend extending (or not) the MINURSO mandate?

Is the issue about the Moroccan Sahara ‘alien’ to our people?

Are we aware that our youngsters are losing their way for lack of prospects and alternatives, their only business being to live with their eyes permanently riveted to their smartphones, surfing social media, which buries them under a mountain of lewd videos and false information?

As the saying goes, “If a single sole is missing, then the entire world feels empty”. No comment!

Fahd YATA

Original article : https://lnt.ma/immobilisme-attentisme-routine-mal-maroc/

The post Morocco afflicted by torpor, inaction and routine appeared first on La Nouvelle Tribune.

The launch of this fund, which will be listed on the Exchange, must be seen in the context of the property company’s debt restructuring programme. It is worth recalling that this securitisation transaction, amounting to MAD 1,210,551,400, will help bring down the company’s overall debt from MAD 9 billion to less than MAD 2 billion.

The different phases of this debt restructuring process are known, beginning with the dations-in-payment and repurchase agreements provided by the Kingdom’s three main banks, AWB, BMCE and BP. The second phase, which was all about negotiating ADI’s debt with mutual funds, proved more challenging because fund managers cannot hold property assets on their balance sheets.

This led to a delay, both in terms of the negotiations regarding the value of the assets put forward by Alliances and the search for a new formula which would provide mutual funds with the solution to the problem of holding these assets while respecting their legal form.

The creation of the FT DOMUS securitisation fund has proved to be the solution!

Admittedly, the AMMC, while taking its time to approve the prospectus, has not only provided reassurance that this innovative solution resolves the problem of Alliances’ debt being held by mutual funds but has, in particular, helped Alami Lazraq’s property company get on with its financial restructuring programme.

This is in fact the penultimate stage of a long process which will culminate with the company issuing a new bond which will consolidate all debt not traded until now.

It is already established that this issue will not only be underwritten but will have a long maturity with a two- or three-year grace period as far as interest payments are concerned.

This will give ADI a little more breathing space to enable it to focus on its business recovery, the key being to develop new projects.

This issue is unlikely to amount to more than 2 billion dirhams with annual interest repayments amounting to not more than MAD 200 million for ADI.

Coming back to FT DOMUS, it is worth knowing that the subscribers to this property fund have already been identified.

These are the mutual funds which hold ADI debt, which they have not been able to exchange against real estate assets.

Similarly, FT DOMUS’ assets are none other than those accepted by the latter as dations-in-payment.

BMCE Capital Titrisation’s role as fund manager, assisted by property experts, will consist of valuing the real estate assets in question at fair value and finding buyers with the admirable goal of enabling ADI’s creditors, FT Domus’ unit-holders, to liquidate their commitments.

FT Domus is a new kind of financial product which is similar to collective property funds, the only difference being that its initiating shareholders are none other than Alliances Group’s former mutual fund creditors.

And therein lies the genius of Finance …

Afifa Dassouli

Further information about the Fund

FT DOMUS is a securitised umbrella fund governed by Act No. 33-06 relating to asset securitisation, as amended and complemented. The Fund, whose purpose is to acquire property assets, put forward by ADI Group as part of its corporate debt restructuring and accepted by a number of creditors, will issue securities to the said creditors listed in the Fund’s prospectus, on an exclusive basis. The said creditors will subscribe directly or indirectly via a designated subscriber with qualified investor status.

The assets acquired by the fund will be valued on a half-yearly basis in accordance with RICS professional standards and will be managed by an independent expert, which will be responsible for managing the property, tax, administrative and technical aspects of the asset portfolio.

This transaction has been set up to enable debt repayments to be made, via the securitisation fund, to participating creditors such as mutual funds, which cannot participate directly in the dations-in-payment phases due to constraints regarding their investment universe.

The anticipated subscription period is 26-28 March with 30 March set as the issue date.

Orginal article : https://lnt.ma/ft-domus-ouf-alliances/

The post With FT Domus, ALLIANCES can breathe a sigh of relief! appeared first on La Nouvelle Tribune.

Assuming responsibility for the RNI’s fate, the political agenda of ‘Mr. Agharass’, the nickname given to him since his first ex officio meeting in Agadir, was clearly different to that of ordinary politicians, who, in the way in which they go about their business, clearly aim to promote themselves (and a number of friends along the way).

But Mr. Akhannouch is no ‘ordinary’ politician.

The long march

Prior to entering public life, Mr. Akhannouch enjoyed a successful career as a businessman, skilful investor and ‘mover-and-shaker’. He was then elected to municipal, regional and parliamentary office before embarking on an (already) long and unquestionably successful ministerial career.

There is no question, therefore, that the RNI’s incumbent leader is in any way intent on reviving his personal popularity or profiting materially from his position, since he is already endowed with a handsome fortune.

So, what is it that really ‘motivates’ Aziz Akhannouch, a person who has set out his stall on transforming the RNI into a real political party?

Very likely, it is his sense of patriotism. He grew up under the shadow of his late father who, as a recognised and respected activist in the struggle for national independence, was imprisoned in the harshest of conditions for his part in the National Movement and the Resistance under the Protectorate.

And the reason that he entered politics so late in his career was that he first had to win his managerial spurs when his father, the late Haj Hmad Oulhaj, passed away, obliging him to take up the reins of Akwa Group.

Today, after a year which has seen the RNI restructured from top to toe, several satellite organisations established (Youth, Women, Self-Employed Professions), regional congresses held (13 including Moroccans of the World), in the wake of the congress held last May in El Jadida to relaunch the party, nobody can no longer call into question Aziz Akhannouch’s reputation as a veritable statesman nor his status as one of the nation’s genuine political leaders.

And if he has acquired such stature, which is further enhanced by his reputation as a gifted orator, it is undoubtedly because of a realisation that he was entirely suited to politics.

How else could it be, given the manner in chalked up a personal victory in managing to remove Abdelilah Benkirane from the race to head up the government?

Para bellum…

When laying down his demands and conditions, he successfully side-lined the PJD’s populist firebrand in favour of its second-in-command, the more sedate and more civilised Mr. Saad Eddine El Othmani.

It was Aziz Akhannouch who contributed most to definitively resolving the political crisis which had lasted for six months, while the RNI, despite being relatively weak in terms of parliamentary representation, had become the lynchpin in every conceivable scenario in forming a government under the PJD’s aegis.

It was this man who took a gamble to ensure that his party, the National Rally of Independents (RNI), became the main political force on the domestic political stage.

Nothing is left to chance or to improvisation for an enterprise whose leaders are clearly determined that the RNI should become the leading political force within the modernising and liberal camp and the main party of opposition to the conservative Islamic movement.

With this in mind, besides building a major political party in the widest sense, Aziz Akhannouch has put forward detailed figures and projections which constitute a genuine programme for government. As a result, the RNI is endowed with a list of concrete and actionable proposals that are unlikely to be enacted before the current parliamentary term comes to an end.

And it is clear, therefore, that a new political reality has emerged, one in which the RNI and its leader are intent on bringing down the curtain as quickly as possible on the current government…

But of course, Aziz Akhannouch is wary of shouting it from the rooftops!

But, if one is able to come up with a detailed and credible political programme, highlight the three main ills afflicting the country – Employment, Health and Education – and the people’s demands, set up a committee to appoint candidates to cabinet posts (4 years before 2022!!!) and demonstrate a fighting spirit and sense of assurance as shown by Aziz Akhannouch at the meeting on 24^th February in Agadir, it is clear that the time has come to do battle with the PJD, a political force which is the RNI’s nadir (look it up in your dictionaries!).

Is it not surprising that the RNI’s proposals on employment, health and education, are being made today despite the fact that RNI ministers are not currently in charge of these portfolios?

Is it not interesting to note that Mr. Aziz Akhannouch is proposing very specific initiatives, on recruitment, training, health, today, while the mandate of the current majority runs until the end of 2021?

Despite the government recently signing a pact of good conduct, the days of this coalition are now surely numbered, aren’t they?

Only time will tell but, already, it is clearly understood that, from now on, Aziz Akhannouch and the RNI are a force to be reckoned with, volens, nolens …

Fahd YATA

Original article : https://lnt.ma/politique-aziz-akhannouch-marche/

The post Politics: Aziz Akhannouch, on the move… appeared first on La Nouvelle Tribune.

This event came under the spotlight due to it being organised under the patronage of His Majesty Mohamed VI as well as being a pan-African forum inaugurated by Mr. Mohamed Boussaid, Minister for the Economy and Finance, Mr. Hassan Boubrik, Chairman of the Insurance and Social Welfare Supervisory Authority (ACAPS), and Mr. Mohamed Bensalah, Chairman of the Moroccan Federation of Insurance and Reinsurance Companies (FMSAR).

In his opening address, Mr. Boussaid emphasised “the event’s African dimension, thanking the International Actuarial Association for having chosen Morocco and recalling the strategic importance that His Majesty the King has placed on the strong and sustainable development of this continent which is ours!”.

The actuarial profession, playing a crucial role

But the most important aspect was the interest shown in the actuarial profession, remarked on successively by the Minister of Finance and the chairmen of both the supervisory authority and the insurance federation, affirming that it was a real turning point for the insurance and pensions sector.

Because actuaries are involved in the sensitive aspects of risk management such as calculating technical provisions, premiums and solvency ratios and, therefore, in implementing risk management systems effectively.

Indeed, for Mr. Boussaid, “the insurance and pensions sectors pose major challenges for all African countries, and as such, the actuarial industry has a crucial role to play. It is also important to the banking sector given its role with regard to each stakeholder in the capital markets industry. In African countries, this profession is still relatively immature.”

And the minister then recalled that “in our country, actuaries were heavily involved in the recent pensions reform, culminating, in 2016, in parametric changes to the civil pensions system managed by the Moroccan Pension Fund (CMR)”.

Especially as one of the key responsibilities of actuaries is to ensure that life tables, a fundamental instrument in pensions as well as in life insurance, are appropriate and properly adapted.

In this respect, Mr. Bensalah regretted that the life tables used in Morocco had not changed for a very long time and harked back to the time of the French protectorate.

International regulations now require that the mortality experience tables used are certified by an actuary. And, in Europe, the actuarial function is now considered to be a “key function” by the Solvency II Directive.

Mr. Boubrik confirmed this to be the case in his opening address, noting that “with the different jurisdictions around the world gradually converging towards risk-based regulations underpinned by international standards, the actuarial profession is in the process of assuming a new importance. Actuaries will no longer be limited to simply making quantitative calculations within the actuarial department or the risk department. They will be required to go far beyond that, fostering a risk culture at every level of the organisation by adopting an overall qualitative approach”.

And Mr. Boubrik unveiled that new “risk-based” prudential regulations for determining solvency were under discussion with the insurance and pension funds industry in Morocco under ACAPS’ supervision.

A risk culture, absolutely essential!

This reform should bolster the risk culture in every aspect of the insurance business and, as a result, profoundly change the supervisory approach adopted by insurance and reinsurance companies. Satisfying this reform’s requirements will pose a real challenge to both insurers and the regulatory authority.

The timing of this African Actuarial Congress is therefore particularly opportune on the eve of introducing a major reform, which will see the insurance industry assume a risk-based approach.

And Mr. Boubrik then asserted that actuarial practice was a science that combined a number of disciplines including economics, probability, statistics, financial mathematics and IT. It was absolutely crucial in maintaining financial equilibrium in an environment of growing uncertainty.

Actuarial science was therefore crucial to resolving the challenges faced by life insurers, as well as property and casualty insurers, pension funds, banks and asset management companies.

To understand this issue more fully, Mr. Boubrik made a short but very interesting instructive demonstration: “The insurance industry is inherently complex and uncertain.

Despite an insurer having a precise idea of its turnover, this was certainly not the case when it came to knowing the amount of benefits that had to be paid out to policy-holders. It could therefore be said that insurance was a business which had an inverse production life cycle.

It was this specific characteristic that made actuaries an essential cog throughout the entire insurance value chain… Their skills were needed to devise viable products for customers and insurers alike, as well being able to prudently evaluate an insurer’s liabilities to its policyholders in order to implement an appropriate reinsurance policy or establish appropriate investment and asset/liability management policies.”

The implication of the choice of theme for this 5^th African Actuarial Congress, ‘Financial Development in Africa: Expertise and Public Interest’ is that the latter cannot be served without actuarial science. And this was clearly demonstrated during the two days of the congress.

Two aspects were highlighted. First, the worldwide trend towards regulatory convergence in support of better risk management by all financial institutions and insurers. Second, the importance of actuarial practice when factoring in risk in a preventive and structural manner.

There is also a genuine need for additional actuarial training with the International Association of Actuaries (IAA) needing to increase its focus on member countries in the southern hemisphere, especially in Africa. The IAA must also help standardise actuarial practice as a financial tool so as to be able to meet international regulations.

Morocco can hold its head up high as far as actuarial training is concerned. A variety of training courses exist, and the Moroccan Association of Actuaries lists a number of practising actuaries.

However, actuaries will be required in growing numbers given the rapidly changing regulatory environment surrounding the insurance industry, as foreseen by ACAPS. Furthermore, given the growing need by banks and other fund managers for these kinds of specialist to appraise the temporal dimension of risk in finance, there is a definite need to emphasise training…

Afifa Dassouli

Original article : https://lnt.ma/lactuaire-colonne-vertebrale-de-lassurance-caisses-de-retraite-aujourdhui-de-banque-demain/

The post The actuarial profession, the backbone of the insurance and pensions industries today and tomorrow’s banking industry! appeared first on La Nouvelle Tribune.

Indeed, the implications, consequences and, above all, underpinnings of this transaction are just as important as the formidable windfall generated, which will now enable MHE to pursue more extensively and more comprehensively his strategy of expanding into Africa (among other things).

An alliance of giants

First and foremost, it is worth noting that the takeover of Saham Assurance by Sanlam Group, market leader in insurance in Africa, clearly underlines the Kingdom’s willingness to open up its economy to foreign enterprises, regardless of whether they are African, Arab, European, or otherwise.

Admittedly, Morocco’s largest companies, particularly its banks, insurers, telecommunications operators, real estate developers and cement manufacturers are expanding into Africa and elsewhere.

But, in return, Morocco’s domestic market is open to those investors looking for growth opportunities, which have fully taken on board that Morocco’s geographical position, within easy reach of Europe and its hinterland of 500 million consumers, is an enormous asset.

European car manufacturers and their ecosystems, Chinese businessmen, sovereign wealth funds from Gulf countries and, now, major African financial institutions are all hurrying to the gateway that is Morocco, with or without Casablanca Finance City!

As far as the partnership between the Moroccan Saham and the South African Sanlam is concerned, a number of points are worth making.

This transaction marks a geographical and geo-strategic rapprochement between two major enterprises which, despite being poles apart from each other, share a common desire to expand and grow their respective businesses in Africa, regarded as the next logical step in their development, while brandishing the slogan ‘Africa for Africans’!

MHE and Motsepe, a model of financial diplomacy

And what is perhaps revealing most of all is that Saham and Sanlam’s achievement from a business and financial perspective is consistent with a pattern which is beginning to emerge at the political, diplomatic and geo-strategic levels between Morocco and South Africa, two giants which, in the North in the former’s case and in the South in the latter’s, have the strongest potential and the greatest ambition when it comes to the African continent.

Therefore, as has so often been the case in history, ‘the merchandise has preceded the flag’, because the acquisition of a Moroccan company by a leading South African company in insurance and financial services certainly cannot be considered a politically-neutral transaction!

In doing a deal which has earned his group, Saham Holdings, more than one billion dollars, Moulay Hafid Elalamy very likely received the green light from the highest authority in the Kingdom beforehand.

And especially since Sanlam’s main shareholder is none other than Mr. Patrice Motsepe, the brother-in-law of South Africa’s new president, Cyril Ramaphosa, the former South African trade union leader turned wealthy businessman, who won the hearts of the ANC and forced the very corrupt President Zuma to resign.

It is worth noting that Sanlam had decided to freeze its investments in its home country last year, focusing instead on overseas deals such as Pine Bridge Investments in Kenya, Tavistock Financial in Great Britain, Zimnat in Zimbabwe as well as Saham in Morocco.

It is also worth underlining that one of Sanlam Group’s major shareholders is Public Investment Corporation, a South African government-backed investment institution…

A close associate of the South Africa’s president and one of that country’s public institutions have thereby become direct investors in the Moroccan economy by joining forces with a person who is not only a flamboyant financier but also a minister appreciated for his qualities and his dynamism, someone who is widely considered to be ‘in favour’.

Was this pure chance or was it intended, in Pretoria as in Rabat, to begin by a tie-up of a business and financial nature, that is to say, begin with something palpable, something serious, before venturing further into the realm of diplomacy?

Such an idea seems quite plausible, especially as pragmatism and entrepreneurship are values ​​and characteristics that are highly espoused in current day South Africa and Morocco.

If it were possible to align Moroccan and South African business and financial circles through mutual, common and shared interests, then it would be easier to adopt the same approach to diplomatic relations between the two states. Indeed, this process already appears to be underway with backing for the Kingdom re-joining the African Union in January 2017.

Saham and Sanlam are the financial arms of what is an inevitable rapprochement that satisfies the genuine strategic interests of these two major African states.

This transaction, seemingly financial, is almost certain to have grated on the nerves of many in Algiers and Tindouf where we may observe, with concern, that Morocco’s diplomatic efforts in business and finance have, without a doubt, been far more effective as those of Mr. Bourita!

Original article : https://lnt.ma/saham-sanlam-bras-financiers-rapprochement-rabat-pretoria/

Fahd YATA

The post Saham, Sanlam, the financial arms of a rapprochement between Rabat and Pretoria appeared first on La Nouvelle Tribune.

Moulay Hafid Elalamy (MHE), after spending the initial part of his career at ONA Group, first shot to fame when he acquired the Es Saada insurance company, saving the Ouazzani family from bankruptcy in the process, thanks largely to support from the Insurance Support Fund.

A major insurance group is established

This was his first major strategic move because, in bolstering CNIA with the Es Saada network, he managed to turn the former into a fully-fledged insurance company which had been, until then, simply a brokerage network.

Then, soon after, ever the visionary, MHE floated CNIA-Es Saada Assurances in November 2010 through the sale of 15% of its capital or 617,531 shares at a price of 1,044 DH per share.

With the amount raised from this IPO, MAD 644.7 million, he was able to grow this company.

Its name was changed to Saham Assurance, which gave it a more institutional feel and enabled it to join the ‘major league’.

Since then, by adopting a very competitive pricing structure, Saham Assurance has continued to gain market share and now enjoys a healthy share of the personal insurance market.

However, Morocco’s insurance industry is concentrated in the hands of three large companies backed by three major groups, Wafa Assurance backed by Attijariwafa bank Group, RMA by FinanceCom Group and BMCE Bank Of Africa and Atlanta-Sanad by Holmarcom Group and CDG.

As a result, given that insurance companies’ technical results are in the red and that these companies are able to keep their head above water primarily as a result of their financial performance, it would appear that industry growth and penetration have likely peaked as far as the domestic market is concerned.

The African quest

Our insurance companies know this only too well, which explains why they have expanded their footprint in Africa considerably in recent years.

This is also true, of course, for Saham Assurance, or rather, Saham Group’s insurance division which, in 2010, adopted a growth strategy for Africa and the Middle East through 65 subsidiaries, including 35 insurance and reinsurance companies on the African continent alone.

It is clear that, based on these results and on his experience, MHE is once again applying an incubator-style strategy. With the business reaching maturity, he has disposed of Saham Assurance and, in doing so, generated a financial windfall of more than MAD 10 billion.

When Saham Assurance went public in late 2010, it was valued at more than MAD 4 billion. Today, with the sale of 53.4% of its capital to the South African Sanlam Group on the basis of 1,450 DH per share, it is overall valued at just under MAD 20 billion.

This literally fabulous deal marks the beginning of a new stage in Saham Group’s strategic development. The sale of its insurance division to Sanlam, which was already a major shareholder, has enabled it to exit this business.

From now on, its approach will be to identify new growth niches, internationally and especially in Africa, and to transform Saham Group into a pan-African investment fund with the aim of becoming one of the major strategic players on the African continent.

With a MAD 20 billion war chest and backed by the South African giant Sanlam and undoubtedly other prestigious partners, as is it is accustomed to finding, it intends to make strategic acquisitions, some of which are already underway, as mentioned in the press release by MHE’s group.

Furthermore, Mr. Ian Kirk, Sanlam Group’s Chief Executive Officer stated: “We are delighted to have increased our exposure to the Kingdom of Morocco, which, as well as being a formidable continental platform at the gates of Europe, enjoys institutional and macroeconomic stability. Our investments alongside Saham Group are a win-win example of inter-African partnership. We hope to work together in the future on other large-scale projects”.

Mr. Kirk’s remarks therefore underline the fact that Moulay Hafid Elalamy, in addition to being a financial genius, as illustrated by his impeccable timing when it comes to investing and, more importantly, divesting, may now be regarded as a genuine tycoon across the entire African continent!

Afifa Dassouli

Original article : https://lnt.ma/moulay-hafid-elalamy-tycoon-africain/

The post Moulay Hafid Elalamy, an African tycoon… appeared first on La Nouvelle Tribune.

Dirham flexibility means the end of an era, with an inflation target now becoming the new ‘peg’.

The responsibility for determining an inflation-targeting regime of course falls on Bank Al-Maghrib.

But what exactly does inflation targeting mean?

It consists of committing the Central Bank, via its monetary policy, to achieving a target inflation rate that has been determined in advance.

The target, at all costs!

A number of countries including the United Kingdom, the Czech Republic and Turkey have adopted this system.

Their central banks are committed to inflation targets and pre-determined timeframes for reaching them. A central bank’s credibility depends on its ability to reach this target within the specified timeframes and deadlines.

An inflation target brings stability to the economy due to the fact that economic agents can factor it into their medium-term decision-making.

In fact, if BAM announces its commitment to maintaining inflation at a moderate level over a certain number of months, then economic agents will sign up to this target and factor it in. It can then be said that the pre-determined target has been implicitly reached.

But in order to do this, BAM has had to acquire cutting-edge analytical systems to be able to generate very detailed forecasts.

As a result, the Central Bank adopted the Forecasting Policy Analysis System (FPAS).

This requires expert knowledge of times series of different variables such as inflation, growth etc. and must include a component for short-term forecasting, that is to say, a system which enables the Central Bank to track price and growth trends.

Thanks to this capability, the Central Bank is now able to make forecasts for the following six or eight quarterly periods and take the required inflation-targeting decisions to be able to implement the flexible dirham exchange rate regime.

Since 2015, BAM’s staff have been working on building specific models, aided by a technical assistance team from the IMF so as to make these systems as robust as possible.

In Morocco, this system has been implemented very quickly by comparison with other countries, which have taken seven years or more to adopt it…

Afifa Dassouli

Original article : https://lnt.ma/cible-dinflation-base-dun-regime-de-change-flexible/

The post Inflation targeting, the basis of a flexible exchange rate regime appeared first on La Nouvelle Tribune.

Are they aware of the highly negative and disastrous impact that the White House occupant’s statements have on the United States’ brand image in the eyes of millions of people all over the world, especially those who are neither American, nor white nor Christian?

From the earliest days of his Presidency and even before, when standing as a candidate to succeed Barack Obama, he became notorious for his inappropriate sweeping statements and critiques, not to mention his bizarre stance on a number of issues, his crass ignorance of current affairs, geography, history and lack of so many other attributes that a cultured and well-educated person is supposed to possess!

Having tried to ban the entry into America of all Arabs and Muslims, build a wall financed by Mexico along the border, evict more than eleven million migrant workers who make a sizeable contribution to America’s prosperity, he has now, in the crassest way possible, insulted men and women of colour from all over the world, referring to Haiti and African countries as “shithole countries’!!

This insult is unbelievably racist, vulgar, spiteful, inappropriate and inacceptable.

It comes from an individual who is leading the most powerful country in the world, whose predecessors were men like J.F. Kennedy, B. Obama, F.D. Roosevelt, B. Clinton, T. Jefferson, A. Lincoln and many other eminent leaders.

Has America fallen so low that it accepts an uncouth and salacious philistine as President?

One cannot help but feel aghast, dumbfounded and taken aback when one realises that Mr Donald Trump shows neither restraint nor any awareness of the enormity and the seriousness of his words, his insults and his remarks.

When the leader of the most powerful nuclear power in the world compares his ‘nuclear button’ with that of his North Korean counterpart, the image that immediately springs to mind is that of two primary school children comparing their respective willies in the playground!

Donald Trump is, indeed, a primitive being, with instincts that are as low as his flies and a sharp tongue as crass as his horrible ties!

Shame on you, Mr Trump!

Fahd YATA

Original article : https://lnt.ma/shame-on-you-mr-trump/

The post Shame on you, Mr Trump! appeared first on La Nouvelle Tribune.

To be more precise, three countries came under the spotlight. The first, the Czech Republic, adopted an explicit inflation targeting regime, the second, Turkey, an implicit regime and the third, Macedonia, whose situation is the most similar to Morocco’s, employed a fixed exchange rate regime while proactively preparing for regime change.

In all but name…

The findings were conclusive insofar as Turkey officially announced that it had adopted a flexible exchange rate regime whereas, in reality, its central bank continued to keep a close eye on the floating Turkish lira, somewhat contradicting the choice it had made.

Macedonia, a small European country with an open economy, had employed a fixed exchange rate regime since 1996. Similar to Morocco in many ways, the country aspired to adopting an inflation-targeting regime over the coming years.

The country had decided in fact to carefully prepare for the transition. An action plan for the period 2007-2014, aimed at bolstering the Central Bank’s technical infrastructure, was adopted to tackle the challenges posed by the adoption of a more flexible exchange rate regime.

Today, the Macedonian authorities employ a managed floating exchange rate regime, resembling a fixed exchange rate pegged to the euro.

Turkey’s experience is also highly instructive for countries within the MENA region. The country had to cope with chronically high inflation for almost three decades from 1970.

In order to reduce the endemically high inflation rate, Turkey adopted, in 2002, an implicit inflation-targeting regime.

This policy helped enhance the central bank’s independence and bring down inflation. The central bank succeeded in bringing down the inflation rate from 68% in 2001 to 7.7% in 2005.

This successful transition period (2002-2005) paved the way to begin work on the institutional and technical pre-requisites needed to make the transition towards an explicit inflation-targeting regime in 2006.

However, the near-zero interest rate policies and quantitative easing measures adopted by developed economies’ central banks in the wake of the financial crisis has had significant repercussions for Turkey’s economy.

The process of monetary policy normalisation pursued by influential central banks has triggered an enormous reallocation of assets into international financial markets, increasing volatility in the Turkish currency market.

The Turkish Central Bank (CBRT) has therefore had to overcome several challenges since 2007 including massive capital inflows and rapid credit expansion, real exchange rate appreciation and increased vulnerability to sudden reversals of capital flows.

This led to the CBRT reviewing its monetary policy framework (objectives and instruments), opting for increased vigilance with regard to the price of its currency by managing the lira’s exchange rate and ensure greater financial stability.

Egypt has finally opted for a free-floating exchange regime, imposed by the IMF in consideration for a USD 12 billion loan, to enable the country to weather the crisis in the wake of the overthrow of the Islamist regime in 2013.

As a consequence of this decision, inflation has shot up to 37%, resulting in a sharp devaluation of the Egyptian pound. However, with stability returning, the influx of foreign investment on a massive scale and the Government’s commitment to reviving the economy, inflation has fallen rapidly to below 20% today.

What about us?

Morocco has made a choice, unquestionably the most appropriate one given the specific characteristics of its economy and will make a success of the transition with the unflinching support of Bank Al-Maghrib. Governor Abdellatif Jouahri and his staff have already done an excellent job!

Adopting a flexible exchange rate regime for the dirham will help to reduce the impact of shocks on the domestic economy, enhance its competitiveness and support strategies for diversifying foreign capital flows.

Lastly, this strategy will also benefit from having a central bank which has been bolstered by the recent reforms which are in the process of being voted. These reforms will give it greater independence and a decision-making role in managing exchange rate policy, which in this case means the dirham’s flexibility.

Afifa Dassouli

The recent data from the Office des Changes at 30 November 2017

At 30 November 2017, imports of goods and service (+MAD 30.8 billion) rose more rapidly than exports (+MAD 28.6 billion), resulting in a widening of the trade deficit by MAD 2.2 billion (-MAD 96.7 billion versus -MAD 94.5 billion at 30 November 2016). The coverage ratio stood at 77.6% versus 76.5% the previous year.

Growth in imports of goods and services was due to increased imports of goods (FOB) (+MAD 21.5 billion), especially energy products, rather than spending on services (+MAD 9.3 billion).

Growth in exports was due to the healthy performance of the export sector (+MAD 18.9 billion), particularly sales of phosphates and derivative products and automotive, agricultural and food exports and an increase in receipts from services (+MAD 9.7 billion).

Remittances from Moroccans living abroad rose by 4% or +MAD 2.3 billion to MAD 60.2 billion versus MAD 57.9 billion at 30 November 2016.

Lastly, FDI flows registered an increase of 13.2% or +MAD 2.6 billion. This was due to expenditure (MAD -7.9 billion) declining more rapidly than receipts (-MAD 5.4 billion).

At 30 November 2017, net international reserves stood at MAD 238.4 billion versus MAD 249.2 billion at 31 December 2016.

Official reserve assets stood at MAD 241.3 billion versus MAD 253. 5 billion at 31 December 2016 while short-term foreign currency liabilities totalled MAD 2.9 billion versus MAD 4.2 billion at 31 December 2016.

A.D

Original article : https://lnt.ma/flexibilite-experiences-uns-profitent-aux-autres/

The post Flexibility : One’s experiences benefit others appeared first on La Nouvelle Tribune.

This is indeed good news for those who felt that the period of hiatus between the spectacular sacking of three ministers and a deputy minister in October 2017 and their replacement in mid-January was beginning to feel like an eternity.

The posts and responsibilities, discharged until now by interim ministers who already had their hands full with their own portfolios, will now be fully assumed by newly appointed ministers who, with lessons learnt from the recent past, will now know that accountability ‘comes with the territory’.

Yes, but…

If the truth be told, in all frankness, it must be admitted that these new ministers, who cannot be criticised until we see them in action, leave us with a sense of dissatisfaction, of unfinished business…

This feeling does not stem from their personalities or their careers to date but from their ‘trademarks’. With the exception of the Deputy Minister of African Affairs who hails from the private sector and is apolitical, the other ministers, such as the Minister of Housing and the Minister of Health, bear the stamp of the Party of Progress and Socialism (PPS) party while the Minister of Education and the Secretary of State for Vocational Training hail from the Popular Movement (MP) party.

Putting aside the remark that the PPS could have come up with an urban designer for the post previously occupied by Mr Nabil Benabdallah and a healthcare professional to replace Dr Houcine El Ouardi, the choices made suggest that party loyalists have been given priority over experts…

And therein lies the rub…

While there is absolutely no question here of criticising or disputing the political edifice upon which the El Othmani cabinet has been built nor of rejecting the challenge of having to piece together a governmental team drawn from a parliamentary coalition, the choices made, in terms of the human resources available as ‘potential ministers’, could have been much better.

This remark, in fact, does not only apply to the PPS and the MP but to all the other parties which have joined the government.

Without question, these are political parties with an essential role to play in the nation’s democratic edifice, clearly and elaborately defined by the constitution, and which are charged with filling the ministerial posts as members of the majority coalition.

Without question, theirs is a vital prerogative, as part of a traditional process, that of putting forward a number of candidates for a post, from whom will be chosen the minister appointed by the Sovereign.

However, these obligations, customs, traditions even, are not incompatible with possessing the requisite qualities to be able to fulfil important ministerial duties as best as possible…

When we now analyse the profiles of the various members of El Othmani’s government, it must be acknowledged that very few of them have been chosen for their recognised expertise with regard to the ministerial portfolios assigned to them.

Barring a few exceptions, they are mostly party leaders or members of their inner circle, party loyalists, persons to whom the party is indebted and wishes to reward, if not regional leaders or factional heads.

When one analyses the ‘final roll call’ of our current ministers, the results of this arrangement are particularly striking.

It is also interesting to note that the vast majority of them are generally unknown to the general public and that many of them stand out by the sheer insignificance or, in the very least, for their discretion…

An awesome trio

But, above all, it is clear that only three or four personalities stand head and shoulders above the pack.

Mr Akhannouch at Agriculture, Mr Elalamy at Trade and Industry (etc.) and Mr Boussaid at Economy and Finance are among the most well known because they are the most active, the most dynamic and the most effective.

This critique is intended to be, if not entirely objective, then at least honest and is of course governed by the importance of the responsibilities entrusted to them.

These three ministers manage what are unquestionably vital departments but, as can be clearly seen from their work, they don’t let up for a single moment.

Can the same be said about the others, all the others, except perhaps the head of the government who, on account of his role as coordinator, is also very much in demand?

And what is striking, when reflecting on the capabilities and the knowledge that these three “super ministers” have of the portfolios entrusted to them, is that the political or party veneer of Messrs Akhannouch, Elalamy and Boussaid, however real it may be, has only recently be applied.

The first two, who hail from the private sector, were successful businessmen with grassroots experience prior to taking up public office. They then became members of a political party ‘to fight for the cause’!

The third, who began his career in banking, worked as a senior bureaucrat before earning his stripes as a technocrat minister and then finally signed up under the RNI banner.

It is quite clear that these officials have had a great deal of practical experience of the business world prior to launching their political careers.

But the others, practically all of them, are politicians, bureaucrats, (senior or mid-ranking), teachers, apparatchiks even, recruited and chosen for this purpose, to whom ministerial responsibilities have been entrusted.

This is why, to ensure genuine governmental efficiency, to ensure that ministerial departments function properly, national political parties will perhaps have to ‘put the horse before the cart’!

Fahd YATA

Original article : https://lnt.ma/gouvernement-y-a-ministres-ministres/

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The scheduled introduction of the reform last July had to be postponed under unfortunate circumstances. A decision was then taken to introduce it without prior notice and early January 2018 had often been mentioned as a possible date.

The fact remains that the introduction of this reform brings a sense of relief because, after three years of preparations, Morocco would not have withstood the disappointment of abandoning this reform.

It is worth recalling that Bank Al-Maghrib had been working on this reform since 2015 and had set the pre-requisites for such a watershed event, not only stability in the country’s economic fundamentals but also an internal restructuring to ensure that the Bank had all the requisite data and statistics to be able to introduce inflation targeting, which is the basic principle underpinning a flexible exchange rate system.

It is also worth knowing that reforming the dirham’s exchange rate regime was inevitable once Morocco had embarked on a process of financial and economic deregulation, by signing a number of free trade agreements, establishing Casablanca Finance City (CFC), an international financial marketplace and initiating numerous projects as part of a process of integrating Morocco’s economy into the global economy.

As is well known, these projects are now at a very advanced stage with Moulay Hafid El Alami’s Industrial Acceleration Plan. But they raise concerns as to whether our fixed exchange rate regime is adequate with a capital account that is almost entirely closed.

A longstanding ambition

This concern has in fact been raised by the IMF with regard to Morocco, a country which it has considered to be a ‘model student for nearly a decade.

And throughout this period, successive Finance ministers as well as the Governor of Bank Al-Maghrib questioned whether a fixed rate regime was wholly compatible with the country’s global ambitions.

BAM began work on establishing the pre-requisites for this transition by bolstering the Central Bank’s independence and ensuring that the financial sector was rock solid, the first criteria to be met.

The next step consisted of providing the newly independent Central Bank with cutting-edge analytical systems by adopting an analytical and short-term forecasting framework, an essential tool for monetary policy decision-making and for monitoring trends in macroeconomic balances.

It is also worth recalling that, somewhat unfortunately, preparations stalled somewhat as a result of the concomitant global financial crisis.

The latter highlighted the weaknesses of the Moroccan economy, particularly the twin deficits, domestic as well as external, the budget deficit and the current account deficit, resulting in a fall in foreign exchange reserves. As a result, exchange rate reform had to play second fiddle to the more urgent priority of correcting the country’s macro-economic indicators.

Until 2013, the country’s external balance had been in a downward spiral and foreign exchange reserves were at very low levels while the nation’s debt climbed to as high as 65% of GDP.

The budget deficit was brought down and currently stands at 35% of GDP, with a positive ordinary balance of MAD 10 billion.

The balance of payments is almost in equilibrium, with foreign exchange reserves covering almost 6 months of imports. The country’s exports are far more diversified with sectors such as automotive, aviation, textiles and food manufacturing contributing alongside phosphates which, for a long time, had been the main contributor to exports.

Exports have continued to grow, boosted by an upswing in demand for Moroccan goods and services due to the Eurozone returning to growth.

In the meantime, BAM and the Ministry of Finance have not lost any time, continuing to their work and preparing the ground for the reform of the dirham exchange rate system, fully conscious that ‘after the rain comes the sun’.

They requested technical assistance from the IMF and the World Bank on a number of very important aspects including an assessment of the financial sector, the Financial Stability Assessment Program (FSAP), which took place in April 2015. This was followed by an assistance secondment relating to the operational aspects of the transition towards a floating exchange rate regime.

Bank Al-Maghrib also organised several high-level seminars on inflation targeting including one on ‘Monetary policy challenges in the MENA region and benefits of adopting a structural system for forecasting and analysis’ and another on benchmarks, which proved a catalyst in initiating the reform in question.

The Central Bank then held meetings with financial markets professionals, encouraging them to organise meetings with their clients to raise awareness.

For all the above reasons, the introduction of the flexible exchange rate regime for the dirham, within a band of -2.5% to +2.5% versus the band existing prior to 15 January 2018 of -0.3% to +0.3% (based on a currency basket comprising the euro and dollar, weighted 60% and 40% respectively), well-oiled, will provide our country’s economy with a genuine opportunity to make another qualitative leap forward.

Afifa Dassouli

Original article : https://lnt.ma/flexibilite-dirham-long-cheminement-dune-reforme-indispensable/

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The reason being was that, amidst strong media interest, the city played host to a glittering array of leaders, senior bureaucrats, eminent personalities from civil society, experts and specialists, at a ‘high-level’ conference organised 29-30 January upon the initiative of the Kingdom of Morocco, the International Monetary Fund and the Arab Fund for Social and Economic Development.

This distinguished audience, hailing from North African and Middle Eastern countries, had gathered to debate a theme that is highly relevant to each State: ‘Opportunities for everyone: growth, employment and inclusion in the Arab world’.

In addition to the Prime Minister, Mr Saad Eddine El Othmani, the Minister of Economy & Finance, Mr Mohamed Boussaïd, who gave the opening and closing keynote speeches respectively, the Presidents of the Arab Monetary Fund (AMF) and the Arab Fund for Social and Economic Development (AFESD) and the Tunisian Prime Minister, a number of leading personalities from the Arab world participated, including Hanan Ashrawi, a tireless activist on behalf of the Palestinian cause, Sheikha Lubna Al Qasimi, President of Zayed  University in the UAE and Samir Samar Mezghanni, a novelist and activist on behalf of youth causes.

The Moroccan delegation included Mrs Miriem Bensalah-Chaqroun, CGEM President, Mrs Nezha Hayat, AMMC Chairperson, Abdelatif Jouahri, Bank Al-Maghrib Governor and Noureddine Bensouda, Treasurer General of the Kingdom, amongst others.

And, unquestionably, given her personal charisma, the importance of her role and her global influence, Mrs Christine Lagarde, IMF Managing Director, was one of the stand-out personalities at this high-level conference. Unabashed at going beyond her role as representative of the IMF, she moderated a couple of highly sensitive panel discussions in a professional, straightforward and effective manner.

‘Double-speak’ by some

After listening to the official speeches given by our Prime Minister and the Tunisian Prime Minister, the lively discussions by the various panels and the closing remarks, two things come to mind.

Neither Mr El Othmani nor his Tunisian counterpart, in their respective speeches, were unable to avoid what could be described as ‘double-speak’, which, alas, afflicts public officials all too often.

Heavy with platitudes, wishful thinking and broad statements, their speeches offered little insight to an audience which hoped for a more realistic and candid approach to tackling the social problems that besiege almost every country within the MENA zone – employment, inclusion, the youth and the place of women in our societies.

The Tunisian PM, Mr Chahed, spoke primarily about the issue of growth in his country and the consequences of the Jasmine Revolution, without daring to criticise the IMF’s policy, which has subjugated the decision-making process as a pre-condition for providing financial assistance to this country, which is hardly conducive to reducing unemployment.

His Moroccan counterpart, Mr El Othmani, had preceded him by deliberately focusing his speech on the reforms undertaken and their macroeconomic impact without really elaborating on the social aspects and the wave of discontent sweeping the country. He managed to carefully sidestep the issue of Moroccan women’s place in society and their role, preferring instead to pay tribute to Mrs Miriem Bensalah-Chaqroun who, as we all know, is particularly immune to this kind of flattery. But can one really expect more from a politician who belongs to a party, whose leading personalities recently compared women to “bright beams of light illuminating our homes”?

It is worth noting, however, that Mr El Othmani made a point of emphasising that the idea of adopting a flexible exchange rate regime had been a ‘sovereign’ decision taken by the Kingdom, rejecting accusations that our government was simply toeing the IMF line.  Such clarification was made in the presence of Mrs Lagarde, who spoke just after him, commending the “intelligence in adopting a flexible exchange rate regime, a positive decision made by Morocco”.

Candour from others

It was in fact the panellists and the IMF officials who spoke in a more realistic and pragmatic manner, most likely because, in coming to Marrakesh, they were not thinking about their political careers.

Mrs Lagarde, in her opening address, did not hesitate to point out the “seething” social discontent affecting most Arab countries. She roundly criticised the official government policies that have been pursued for aeons, whose sole impact had been to widen budget deficits, restrain growth and render every type of job creation incentive ineffective, thereby turning unemployment, particularly among the youth, into a ticking tomb which could go off at any time or place.

The IMF boss, as a staunch feminist, also referred to the discrimination and marginalisation of which women in the Arab countries are victim. To illustrate her point, she paid tribute to two Moroccan women in the conference hall, each of whom had made their mark in their respective disciplines due to their dynamism and competence, Mrs Miriem Bensalah-Chaqroun, CGEM President and Mrs Nezha Hayat, Chairperson of the Moroccan Capital Markets Authority (AMMC).

Mrs Lagarde was even more forceful in emphasising the conditions required to generate inclusive growth within the MENA region.

In the opinion of the head of the International Monetary Fund, the guardian of liberal economic orthodoxy, public policy-making must change if the region is to deliver growth and development, reduce the glaring social disparities, give women their rightful place and rescue youngsters from a sense of despair and a lack of direction.

Such a change can be achieved, in her opinion, by reducing the tax burden on businesses, introducing powerful incentives to invest, especially FDI, abandoning policies of doling out subsidies which weigh heavily on budgets, ending massive recruitment into the civil service and adopting policies which promote private sector job creation.

Nothing really revolutionary, in fact, except that the policy of reducing the tax burden, in particular, provides a genuine alternative that has proved successful in a number of developed economies which have returned to growth. This, therefore, ought to inspire official decision-makers within the region.

Pragmatism and realism, the credo of civil societies

This emphasis on alternative solutions, deemed urgent by the IMF so as to avoid social explosion or implosion, was strongly endorsed, if not in content, then in spirit by the various panels which provided substance to this high-level conference.

Therefore, when it came to exploring how to create millions of jobs in the Arab world, the problem of youth employment rapidly came to the fore in the panellists’ discussions. By way of example, the Saudi, Khalid Alkhudair, outlined the various paths his country had taken, finding imaginative and courageous solutions to enable SMEs to create jobs and to offer job opportunities to Saudi women.

Others, such as Morocco’s own Nezha Hayat emphasised a pragmatic approach to implementing training and job creation policies as well as the need to foster a spirit of entrepreneurship in school children from a tender age. She also pointed out, in a highly articulate manner, that countries should not be obsessed about creating the next Silicon Valley but, instead, focus on less skilled profiles who are far greater in number and who have legitimate aspirations for a better future.

It was in a similar vein that the participants in the second round-table discussion debated the issue ‘Enhancing inclusion and boosting job opportunities in the Arab world’.

For the panellists, particularly the Egyptian, Ashraf Sabry, founder and MD of Fawry Mobile Banking, the most appropriate and viable solutions were often the most straightforward. They are often found by observing people’s everyday behaviour and needs and by applying the latest technology.

Lastly, one of the most interesting moments of the day was the discussion on ‘Women’s empowerment in the Arab world’ with a number of leading female personalities participating. Expertly moderated by the very amiable Christine Lagarde, the speakers, Hana Ashrawi, a Palestinian, Miriem Bensalah-Chaqroun, a Moroccan, Sheikha Lubna Al Qasimi from the Emirates and Samar Samir Mezghanni, an Iraqi-Tunisian, each spoke about their individual experiences which had enabled them to make their mark and succeed in disciplines which were as diverse as they were male-dominated in their respective countries.

These moments of insight and candour were a pure delight, proving that sheer will-power and personality are powerful drivers to overcoming any obstacle.

A lesson and a beacon of hope for millions of women living in our Arab world…

Fahd YATA, Marrakesh

Original article : https://lnt.ma/croissance-inclusion-emploi-a-marrakech-entre-langue-de-bois-pragmatisme/

The post Growth, inclusion and employment, in Marrakesh, between ‘double-speak’ and pragmatism appeared first on La Nouvelle Tribune.

Unsurprisingly, the explanations and justifications of the Bank’s Governor, Mr Abdellatif Jouahri, remain the same, namely, that inflation is below 1% and that, despite an improvement Morocco’s economic growth prospects, inflationary pressures, in particular, have not yet materialised!

A low interest rate environment has indeed become the norm.

For the 2-year, 5-year and 10-year maturities, rates are at their historic lows at between 2.8% and 3.3%.

The capital market is experiencing a real imbalance between the supply and demand for capital, with the latter concentrated in the hands of the Treasury (cf. our article about the Treasury, which reigns supreme on the domestic capital market, published in the 21 December 2017 issue of La Nouvelle Tribune, No. 1053). BAM’s key interest rate lies at the very heart of the money market’s functioning, however, in that it corresponds to the Central Bank’s 7-day bank refinancing rate i.e. the bank base rate.

It must be recalled that between April and June 2016, the repo rate, which is the rate at which credit institutions refinance their operations overnight, had fallen to 1.5%, well below the bank base rate in question.

Bank Al-Maghrib had to react by raising banks’ reserve requirement ratio from 2% to 4%, so as to absorb the excess liquidity and re-establish the primacy of its key interest rate.

A liquidity surplus had arisen in the interbank market, causing rates to fall further because banks no longer needed to refinance their operations during these two months of 2016.

It is worth noting that excess banking liquidity is caused by surplus external capital flows.

Our country’s trade balance remains unbalanced, however, with an import coverage ratio of less than 60%.

The services balance, on the contrary, is in surplus! It is a beneficiary of MAD 50 billion of tourism receipts, underlining the resilience of Morocco’s tourism industry.

The same is true for net foreign direct investment which, from one year to the next, amounts to between MAD 25 billion and MAD 30 billion on a recurring basis. Predicting such figures is a relatively risk-free task due to the ongoing investment by foreign investors in major industrial projects.

Remittances from Moroccans living abroad are also relatively stable at around MAD 55 billion annually. In 2017, transfers rose by a slow but steady 4%.

As a result, the services balance surplus went some way to offsetting the trade deficit.

The current account balance, excluding FDI which is recognised in the capital account, remains in deficit. But the deficit has declined by some 60%, however, from a peak of 10% of GDP, when the oil price was more than 100 US dollars, to just 4%.

If FDI were included, the balance would be restored.

Morocco’s foreign exchange reserves have also been recovering very rapidly as can be seen from the recent losses incurred due to concern over the dirham’s possible devaluation, which resulted in sizeable volumes of foreign exchange hedging.

In just four months, foreign exchange reserves recovered by MAD 50 billion. There has been excess liquidity in foreign currencies ever since the oil price declined sharply in 2016, which saw the country’s energy bill halve from MAD 100 billion to MAD 50 billion. The counterpart to these currencies transferred to BAM in dirhams can be found with the banks, which therefore have surplus liquidity as a result.

BAM’s reaction at that time could have been to move from a system of injecting liquidity into one in which it removes it.

But it did not do so immediately, instead waiting until the June Board meeting when it raised the reserve requirement from 2% to 4%, so as to mop up all money market surpluses in one fell swoop. It could also have resorted to lowering the key interest rate, especially given that inflation remained subdued at below 1%.

But the issuing Institute knew that lowering the key interest rate even further would not serve to increase lending because of structurally weak demand, not to mention the impact on banks’ financial health.

For all these reasons, BAM’s key interest rate will likely remain at 2.25%, resulting in a flattening of every type of yield curve, beginning with Treasuries to corporate bonds and bank interest rates!

Wealth creation alone will be able to turn this situation around. As long as the latter remains weak, returns on both debt and equity will remain low.

Investment is the best indicator of future prospects when it comes to wealth creation, thereby restoring confidence, which is itself a guarantor of wealth creation, a fundamental condition therefore for improving returns…

Afifa Dassouli

Otiginal article : https://lnt.ma/bank-al-maghrib-taux-directeur-a-limage-de-conjoncture-economique/

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The nation’s press provided a ‘bare minimum’ coverage, with a just a handful of articles or factual reports published in respect of the visit.

But there was no in-depth analysis whatsoever.

This is probably because our upbringing and our respect for professional ethics prevent us from interfering in our neighbours’ internal affairs.

However, this brief but insightful visit warrants a few remarks, which perhaps are not to the taste of ‘our brothers in the East’.

First, it is to be noted that by not commenting on President Bouteflika’s state of health via social media, President Macron and members of his entourage displayed a sense of tact, unlike Manuel Valls, whose insensitivity had hurt Algeria profoundly.

With Emmanuel Macron, it is clear that, from now on, values and principles will underpin France’s approach, something to be highly appreciated everyone… except a sizeable section of the French press which is increasingly bedevilled by ‘pipolisation’, a French term that is more appropriate than the English ‘peoplisation’, a pun on the fact that today’s sensationalised news is full of untruths.

Let’s close the chapter…

The second comment inspired by the French President’s Algerian visit is that there is a noticeably huge chasm between the different approaches adopted by France and Algeria respectively with regard to their relationship.

The political class of El Djezaïr and the Algerian press are still wallowing in pathos, emotions and resentment. They remain entrenched in the past as far as their relationship with the former colonial power is concerned.

Algeria, which has built a nice little business out of its ‘one million martyrs’, continues to believe that bilateral relations with France are first and foremost governed by History, the war of independence and, in particular, by remorse (on the French side, of course).

This approach is characterised by ‘rear-view mirror syndrome’. However, it is quite obvious from President Macron’s visit that the President, born 25 years after the Evian Accords, has no inhibitions whatsoever about this episode of history which is not only burdensome but, objectively, is proving to be an obstacle to developing positive and healthy relations between Paris and Algiers.

Emmanuel Macron is looking to build a future based on the present, between two peoples, States and countries whose common past is best left to historians and sociologists to research rather than to politicians who are likely to exploit it for their own ends.

This is why during his Algerian visit, the French President, unlike his predecessors, adopted an attitude that was as frank as it was uninhibited by the legacy of the past, refusing to ‘atone for past sins’ as demanded each time by the Algerian press.

Moroccan Sahara, a stance that is ne varietur

A final comment must be made regarding Emmanuel Macron’s diplomatic visit to Algeria, which is of direct concern and interest to Morocco and Moroccans.

The Algerian press did not fail to question France’s Head of State about Paris’ stance on the Moroccan Sahara issue.

It is well known that Algeria considers France to be a “major obstacle” regarding this issue, rebuking the latter for its support of the Moroccan cause at the UN and, in particular, on the Security Council.

Algiers, its hack writers as well as the Polisario separatists condemn France’s “unilateral approach”. At the end of Mr Macron’s visit, a whole barrage of criticism and attacks were levelled against France’s stance, which the French President had reiterated with great conviction and transparency, much to the annoyance of the supporters of secession.

France’s stand is entirely consistent with the Security Council’s resolutions on this issue (cf. the resolution dated 30^th April 2017) and the initial introductory report of its General Secretary, Mr Guterres, considering that a solution can only be found with Algeria’s direct involvement.

And President Macron did not hesitate to say this to the Al Watan journalists.

This had the effect of annoying the Algerian leaders and the Polisario, who have been striving for decades to make this a strictly Morocco-Polisarian issue, while the reality is very different.

Like Spain, France, with its well-known colonial past in this part of North Africa, is well aware of the origins of the problem, the real stakeholders and the causes of the historical injustice suffered by the Kingdom of Morocco, its national unity and its territorial integrity.

Emmanuel Macron did not beat around the bush in telling the truth, urging Algeria to cooperate more closely with Morocco so as to find a lasting solution to this issue.

The writing is on the wall for the Polisario, the ghostly RASD, the Tindouf mercenaries, as well as the outdated old guard which has been governing Algeria since 1962, with its Bismarkian dreams of a Greater Prussia!

The Algerian nomenklatura has generated and perpetuated this artificial conflict for more than forty years. President Macron, who was born two years after the Green March, was able to ‘tell it as it is’ to the Algerian officials.

A stance that is responsible, positive and transparent and which proves to all parties that the separatists’ designs will not be accepted in Paris, Brussels or New York.

This should be of serious concern to the Generals’ Algeria and to those who serve it, especially given that the UN now has a Secretary General with a better grasp of the grassroots issues affecting North Africa than a Korean citizen, and someone who has appointed a former President of the reunified German Republic as his personal representative to the Sahara.

Emmanuel Macron did not of course utter the famous words pronounced by General de Gaulle on 4^th June 1958 to a crowd which had gathered on the Place du Forum in Algiers, “I have understood you”. The manner in which he replied to the Algerian press revealed, however, that he has indeed understood the real nature of the Saharan issue.

We are therefore able to say that France is today governed by a President who ‘walks the talk’.

What joy!

Fahd YATA

Original article : https://lnt.ma/emmanuel-macron-lalgerie-complexe-remord/

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