Market Overview
Water and Wastewater Morocco’s weak runoffs, depletion of water supplies to dams, and diminished recharge of ground water are a result of rain deficits since 2015. These challenges are especially prevalent in regions where the demand relies exclusively on local supply systems. According to the World Resources Institute report, Morocco is ranked 23rd among countries most at-risk of water shortage. These threats make environment technologies a crucial sector for Morocco’s economy.
The Department of Water is the leading authority in Morocco and determines the priorities and investments in the sector. The National Office of Electricity and Water is the state utility agency that invests in major strategic and structural projects in water and wastewater. The agency also commonly administers public tenders in the sector. 
In an effort to rebuild and restore water availability across the country, Morocco has implemented their National Water Plan, which is an ambitious action plan to invest nearly $40 billion into the water sector.
Market Opportunities
The National Priority Program for Drinking Water and Irrigation is set to take action from 2020 to 2027 with an overall budget of $11 billion. The program’s main objectives are to limit the climate impact and guarantee water security. These ambitions will be met in several different ways:
Improving water supply The construction of dams: Morocco has 145 dams with a storage capacity of 18.67 billion m3. Twenty new large dams are planned as part of the program, with a total capacity of 5.38 billion m3. Fourteen other dams are under construction (3.21 billion m3). Additionally, Morocco has 909 small dams.
The prospect of new groundwater is to strengthen the supply of drinking water. The Department of Water will contribute a budget of $80 million, while National Office of Electricity and Water will invest an additional $56 million.
Three new desalination stations are planned for a total production capacity estimated at 243,300 m3 per day. Currently, five stations are under construction with a capacity of 328,200 m3 per day For example, the Agadir station, whose capacity is estimated to be between 150,000 and 200,000 m3 per day for drinking water and 125,000 and 200,000 m3 per day is intended for irrigation), while four other stations have already carried out with a total capacity of 46,300 m3 per day.
Strengthening the supply of drinking water in rural areas The Moroccan government believes that rural areas should no longer depend on local systems, so the plan is to connect them with structural systems. Therefore, the government has decided to equip 160 centers and upgrade 659 additional centers for the benefit of 1.2 million inhabitants.
Water development for the agricultural sector This initiative involves carrying out the hydro-agricultural development project to safeguard the Saiss plain over an area of 30,000 hectares through the construction of a canal as well as a water transfer network from the Mdez dam. A hydro-agricultural system will strengthen the southeastern area of the Gharb plain over an area of 30,000 hectares. The objective is to preserve the water resources provided by the Al Ouahda dam, which aims to expand the irrigation areas in the region.
Wastewater reuse for the irrigation of green spaces National and international public opinion no longer support the irrigation of green spaces with drinking water. Thus, Morocco decided to irrigate its green spaces, including golf courses only using treated wastewater. This philosophy must now be extended to all green spaces. Sanitation projects, for the benefit of 128 cities and urban centers, and the connection of 1,207 rural centers to sanitation networks will continue to occur.
Increasing communication and awareness for the importance of preserving water resources and rationalizing its use One of the most important pillars of the initiative is to convince local citizens of the need to rationalize the use of water and of the importance of preserving water resources. Several water-saving awareness campaigns through direct and indirect channels, especially social networks, are utilized to engage the public in this important factor.
Competitive Landscape
Local competition There are local companies with extensive experience in building dams and working on technical studies. The most famous one is SGTM, a national leader in the construction sector. The company is always been involved in big scale projects, including the building of large dams and construction of ports.
Foreign competition French and Spanish companies, such as Lydec, Veolia, Suez, and others, are active in Morocco. Specifically, Veolia achieved significant progress over the past 16 years in the management of essential services (water, electricity, and sanitation) in the regions of Tangier-Tetouan and Rabat-Salé. Wastewater treatment is also a primary focus for these companies.
Trade Barriers, Intellectual Property, Taxes
Trade Barriers  European Union (EU) standards for products are favored, and excessive formal protocols and bureaucracy can lead to long wait times for product launches and openings. The lack of efficient and transparent processes for obtaining government permits, land approvals, and procurements create further barriers when dealing with the public sector. 
Import Tariffs Under the United States (U.S.)-Morocco Free Trade Agreement, most tariffs on qualifying consumer and industrial goods were immediately eliminated. For a very limited number of products, tariffs will be phased out over a period of up to 18 years, through 2024. To obtain information about tariffs on individual U.S.-origin products exported to Morocco, consult the FTA tariff tool .
The FTA also establishes market access to services, intellectual property protection, a predictable legal framework for U.S. investors, open and fair government procurement, and strong protections for labor and environment. 
If the imported good is an unfinished product requiring further processing or assembly in Morocco, duties on it may be reduced further. Import duties on the limited number of products facing tariff phaseouts over the period of 18 years vary from 2.5% to 35%. Imported goods are also subject to a Value Added Tax (VAT), which varies from 0% to 20%. In contrast, the VAT is not always charged on locally produced goods (e.g., corn) or on some vehicles used for international transportation (e.g., moving vans). 
A parafiscal tax of 25% on imports applies to finance activities, such as technical inspections for export goods, economic and export promotion, industrial development, and small-scale production. All merchandise imports qualifying for special customs procedures or concessions granted in the following context are exempt from the parafiscal tax: officially approved investment programs; legislative provisions or special regulations; and preferential status under trade agreements between Morocco and other countries. 
New Verification on Conformity Moroccan Ministry of Industry, Trade, Green and Digital Economy (MCINET) recently established a Verification of Conformity (VoC) program to certify that products imported into Morocco comply with the national regulations for product quality and safety. The VoC program is effective from February 1st, 2020 onward.
Finance
The greatest barriers to doing business in Morocco are a lack of transparency in government procurement, slow bureaucratic decision-making and procedures, and restrictions on prepayments for imports prior to delivery. Companies often complain about delays in receiving government payments.
The legal and banking systems in Morocco are different from the systems in the U.S. The Moroccan legal system is based on a combination of French, Spanish, and Islamic laws and can be complex for U.S. companies to navigate. International and domestic arbitration are accepted and used in business contracts. Morocco has made significant reforms to the banking system in previous years, including structures and programs for foreign direct investment, project finance, and trade finance. Despite recent progress, significant delays in procurement implementation and payments can still occur.
U.S. exporters who require 100% advance payment often find restrictions on prepayments of current orders to be problematic. Currently, Moroccan companies can prepay up to 30% of the total shipment in advance of importation, and letters of credit are often used to finance shipments. A Moroccan company can prepay 100% only for orders under approximately US$21,000. Payments from Moroccan government-owned companies can be slow and are often burdened by heavy bureaucracy.
The largest banks in Morocco with branches in Europe and Africa are: Attijari Wafabank, BMCE Bank of Africa, and Banque Populaire. BMCI BNP Paris and Société Générale also have offices on other continents. It is worth mentioning that Citi Bank has a branch in Morocco.
The U.S. Export-Import (EXIM) Bank has been active in Morocco, but its business with the country experienced some decline recently. EXIM visited Morocco in 2020 to identify opportunities to work in Morocco.
The U.S. International Development Finance Corporation is exploring opportunities in Morocco. The U.S. International DFC provides a variety of programs including project financing, direct equity, and support for investments.
Contact Us
Helima Berrami
Halima Berrami is a U.S. Commercial Service Specialist in charge of Environmental Technologies. Based in Casablanca, Morocco, Halima covers the Safety & Security, Healthcare, Environmental Technologies, Defense, and Renewable Energy sectors.
She has been with the Casablanca Foreign Commercial Service (FCS) since early 2015. Prior to joining, Halima worked in the market research industry as a Senior Research Executive for over five years in two different companies: Ipsos and Kantar group in Casablanca.
Before that, she worked as a commercial specialist at Atlas Voyages travel agency for three years.
Halima has completed a B.S. in Management from ISIT Tangier and a Master’s degree in Marketing and Trade Development from ENCG Settat, Morocco.  Email Helima Berrami.
