– First of all, it is good to remember that the creation of this Fund is based on the speech of His Majesty the King on the occasion of the Feast of the Throne 2020, where he announced structuring actions of an economic and social nature which the Government must address.
As you know, Morocco, over several years in a row, has devoted more than 30% of its Gross Domestic Product (GDP) to investment to develop its basic infrastructure in roads, ports, airports, dams, industrial zones, high speed trains, high speed telecommunications infrastructure. It has therefore reached the maximum level which far exceeds what countries comparable to ours or emerging countries have not reached. This, at a time when we still needed to develop our basic infrastructure and thus have enough, so to speak, Fixed Capital for a rapid convergence towards emerging countries. However, our own financial resources are scarce and Morocco’s debt level has reduced our room for maneuver to contract new loans.
So, how to do ? The solution lies in the involvement of the private sector and financial institutions such as social welfare funds, insurance companies and banks, for example, in the investment and development of these infrastructures. To do this, Law 46.18, amending Law 86.12 relating to public private partnerships (PPP), was approved in April 2019 to facilitate precisely this involvement. But, to attract the private sector, the State must bring financial resources for its part and be ready to share the risks with these private investors. Hence the creation of this Fund, in the form of a Trust Account (CAS) that the State will fund with an amount of 15 billion Dirhams and raise 30 billion from the private and institutional.
– But, there are already several global and thematic funds, why one more fund?
– Yes, indeed, there are several funds, the best known of which are the Hassan II Fund for Economic and Social Development, the Ithmar Fund (former Moroccan Tourism Development Fund – FMDT), the Industrial Development Fund (FDII), the Fund Maroc INNOV, or others. However, these funds have shown their limits in terms of investment volumes and rely mainly on the contribution of the State. Add to this that the latter do not have the necessary mechanisms to attract the private sector. It should also be emphasized that this Fund, which I personally prefer to suggest by the acronym of “MOSIF” (Moroccan Strategic Investment Fund) will have the role of rationalizing the intervention of other Funds …
– What are the necessary conditions for this fund to fulfill its mission?
– This Fund is created, in accordance with the Organic Law of the Finance Law (LOLF), as a Special Treasury Account. However, its structure must evolve into a structure endowed with governance and dedicated human and financial resources that allow it to carry out its mission in an optimal and sustainable manner. A structure of public establishment or public limited company would be best indicated. In addition to competent and experienced human resources, governance must include separate structures for strategic orientation and investment, minimizing as much as possible political interference that could affect the rationality of projects, objects of investment. Governance must be fully inspired by the Santiago principles as adopted by the International Monetary Fund (IMF) for sovereign investment funds.
For more objectivity in the choice of partners, the financial profitability of a project must be the main element, not to say the only one, preceding any investment choice.
A condition conditional on the success of the Fund is its sustainability, in the sense that it must develop its own financial resources and be able to raise them from partners. If I spoke of the limits of existing funds, it is because, for example, the Hassan II Fund is supplied mainly by (non-sustainable) receipts from privatization. The ITHMAR Fund is penalized by a permanent change of mission (Tourism then Energy and finally Africa), doubled by a lack of interest from investors.
– The State contribution to the Fund will be 15 billion Dirhams, while it must raise 45, do you think it possible to raise the remaining 30 billion?
– Absolutely. It is important to note that MOSIF will intervene in a public sector which will undergo a radical transformation of public establishments and enterprises (EEP) by the creation of the State Participation Agency (APE) in the latter (Portefeuille de l ‘State). The latter should operate mergers, deletions, recapitalizations and private sales among the more than 700 PE for the formation of coherent poles, capable of leading heavy investments and making them profitable. Thus, MOSIF will make its investments with new poles capable of generating for itself and its partners a reasonable return on investment and able to sustain a sufficient financial flow to multiply its investments.
It is also important for MOSIF and APE to work together for a better promotion of the tangible and intangible heritage of the State. I give, for example, the private land domain of the State of more than two million hectares, valued in hundreds of billions of Dirhams and the Hertzian domain (radio frequency spectrum) necessary for the development of future mobile telecommunications. generations. All this is likely to facilitate the raising of the necessary funds and to attract national and foreign investors.