VZCZCXYZ0004
RR RUEHWEB

DE RUEHCL #0093/01 1341733
ZNR UUUUU ZZH
R 141733Z MAY 09
FM AMCONSUL CASABLANCA
TO RUEHC/SECSTATE WASHDC 8390
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUCNMGH/MAGHREB COLLECTIVE
RUEHBP/AMEMBASSY BAMAKO 0288
RUEHDK/AMEMBASSY DAKAR 0308
RUEHNK/AMEMBASSY NOUAKCHOTT 2375
RUEHOU/AMEMBASSY OUAGADOUGOU 0047

UNCLAS CASABLANCA 000093 
 
SIPDIS 
SENSITIVE 
 
STATE FOR NEA/MAG 
COMMERCE FOR NATHANIEL MASON 
 
E.O. 12958: N/A 
TAGS: ECIN ECON EINV PGOV SOCI MO
SUBJECT: MOROCCO'S EL DORADO - FRANCOPHONE AFRICA 
 
REF: A. CASABLANCA 10 
¶B. CASABLANCA 26 
 
 
¶1.  (SBU) Summary: To fuel its expansion in Francophone Africa, 
Morocco's largest companies - Attijariwafa Bank, Banque Morocaine du 
Commerce Exterieur (BMCE), and Maroc Telecom - are employing a 
calculated strategy, which entails buying controlling stakes in key 
sub-Saharan African firms, and pursuing deals in smaller, low 
visibility countries in the region.  Morocco's majority stake in 
Francophone Africa's largest banks and telecom firms, in conjunction 
with King Mohammed VI's economic diplomacy, provides Morocco with 
leverage for its Sahara policy.  While Morocco's business ventures 
have generally been successful, some companies have arguably taken 
disproportionate risks in their acquisitions.  (Note: Throughout, 
Africa is used as shorthand for Francophone Africa. End Note.) End 
Summary. 
 
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Business Strategy in Africa 
--------------------------- 
 
¶2.  (SBU) Morocco's largest companies - Attijariwafa Bank, BMCE, and 
Maroc Telecom - are utilizing a calculated strategy, which entails 
buying controlling stakes in key sub-Saharan firms and pursuing 
deals in smaller, low visibility countries in Africa in order to 
fuel their expansion in the banking and telecom sectors.  (Note: 
Over the past decade, much of Morocco's investment in Francophone 
Africa, like its trade, has been concentrated in a few countries 
such as Senegal, Mali, and Mauritania. End Note.)  Hicham Alaoui, 
director of BMCE's Risk Management office, said "This sub-Saharan 
strategy has certainly brought BMCE quite a bit of profit". The 
Bank's activities in the region account for close to 10 percent of 
its total net income, added Alaoui. 
 
¶3.  (SBU) The extent to which this policy is officially supported 
and encouraged by the Government of Morocco was evident in King 
Mohammed VI's recent visit to Equatorial Guinea.  Accompanied by a 
large trade delegation, the visit produced an agreement that will 
see Morocco's Tanger-Med Agency assume responsibility for managing 
the port of Malabo.  Such high-visibility visits and the 
accompanying investment, Attijariwafa Bank's Idriss Maghraoui 
observes, have also brought Morocco political benefits.  Government 
officials, like the King, strongly believe that Morocco's business 
ventures in Africa will enhance the country's ability to garner and 
maintain support on its Sahara policy. Yet Yahia El Farah of the 
Institute of African Studies at Rabat's Mohammed V University 
cautions against conflating Morocco's foreign policy with its 
commercial actions abroad. 
 
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A Partnership, Solidified 
------------------------- 
 
¶4.  (SBU) Morocco's largest companies are aggressively deploying 
this expansion strategy in Africa.  Maroc Telecom, the country's 
largest telecommunication firm, is rapidly buying control stakes in 
some of Africa's largest telecom firms such as Mauritania's 
Mauritel, Burkina Faso's Onatel, and Mali's Sotelma to name a few. 
"Sub-Sahara's telecommunications sector is the most dynamic segment 
of the continent's economy, the most flexible and therefore the most 
desirable", says Lahcen Kourss of Maroc Telecom. 
 
¶5.  (SBU) Meanwhile, Morocco's commercial banks have also sought 
opportunities in the Francophone region.  Attijariwafa Bank, 
Morocco's largest bank, and a French financial group, Credit 
Agricole, announced in November 2008 that the Bank would acquire the 
French firm's banking stake in Africa.  Credit Agricole's operations 
in Africa consist of Societe Ivorienne de Banque (51 percent stake), 
Union Gabonaise de Banque (59 percent stake), Societe Camerounaise 
de Banque (65 percent stake), Credit du Congo (81 percent stake), 
and Credit du Senegal (95 percent stake).  Attijariwafa Bank is 
already present in Senegal through two subsidiaries that are 
currently being merged - Attijari Bank Senegal and CBAO - to form 
Senegal's largest bank. 
 
¶6.  (SBU) Similarly, BMCE has relied on a strategic acquisition of 
the Bank of Africa (BOA), the rapidly rising West African 
multinational bank, to fuel its expansion.  In May 2008, a 70 
million Euro loan from the International Financial Corporation 
helped BMCE acquire 35 percent of the capital of BOA, to which it 
added a 7.5 percent share in September.  BMCE is expected to have a 
controlling stake in BOA in the upcoming months, which will expand 
its influence to 12 countries in Africa.  BMCE also holds a 20.7 
percent share in Mali's largest bank, BDM. 
 
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Risky Business 
-------------- 
 
¶7.  (SBU) While Morocco's business ventures have generally been 
successful, some companies have arguably taken disproportionate 
risks in their acquisitions. The rating agency Standards & Poor 
flagged such expansion as a "source of risk" in its otherwise 
generally positive assessment of the Moroccan banking sector in 
February 2008.  Outside observers also question the amount that 
Moroccan banks have paid for some of their acquisitions.  Oxford 
Business Group, for instance, noted that Attijariwafa's July 2008 
bid of 60 million Euros for a Malian bank outstripped its closest 
rival by nearly 40 percent. 
 
¶8.  (SBU) There are also other risks to Moroccan expansion in 
Africa.  Poor governance and regulatory burdens remain serious 
limitations to investment in the region.  Ongoing difference over 
management with Air Senegal International, the Senegalese flag 
carrier set up as a joint venture between Senegal and Morocco's 
Royal Air Maroc (RAM), illustrate that business disputes in 
Francophone Africa can be costly, in terms of both time and fees. 
RAM has been seeking to extricate itself from the agreement since 
2007, thus far without success. 
 
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Comment 
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¶9.  (SBU) Morocco's expansion into Africa has been emphasized over 
the past year as part of a strategic move to diversify Morocco's 
international presence away from its more traditional, saturated, 
European markets. Reftels discuss Morocco's emerging economic ties 
with India and Russia. 
 
Millard