Casablanca Finance City (CFC) was officially launched in December 2010 as a financial and economic hub from which to drive investment into Africa.
Today there are 150 companies operating from the centre and it is estimated that 74% of Moroccan FDI and investment flows into Africa originate from CFC. There has been a flurry of activity around Africa-bound investments in London in recent times.
DLA Piper, a member of the CFC, organised an investor day to make the case for African opportunities to its clients while the Casablanca Stock Exchange hosted a Morocco investment day at the London Stock Exchange. Although the events were not related, they illustrate the continued appetite for emerging and frontier markets.
Attending the DLA Piper event, Manal Bernoussi, CFC’s Strategy and Marketing Director, said that although it was encouraging to see considerable investment interest in the UK, this has not been translated sufficiently into actual deals. Investments so far, Bernoussi says, are small by global standards.
Of the 150 companies operating in CFC, 40% are European groups but of those, only five companies are British. “If we are to drive capital to our economies,” she says, “one way of stimulating the flow of capital is to get international partners to be closer to the market, which is the appeal of CFC.”
Like the DIFC in Dubai, the CFC is providing modern infrastructure and facilities in a 100ha site, of which 50% is devoted to green spaces. The first tower is about to be completed and will start receiving its first tenants before the end of the year.
But it is much more than that and the CFC has a clear focus. To be granted CFC certification and to become a member, companies have to show a clear African orientation, she says. “Not any company can just come and set up in the CFC. You have to produce a business plan to prove that part of your business and investments are geared towards Africa.”
Companies targeted by CFC are typically involved in: financial services (except retail banking); professional services (law firms, accountants etc); African holdings; or are regional headquarters of multinationals. CFC members include a number of international institutions such as BNP Paribas, Boston Consulting Group, AIG and a number of fund managers, law firms and banking institutions.
CFC also hosts the Africa 50 Fund, a fund launched by the African Development Bank to accelerate investments in infrastructure by mobilising public and private sector capital. It is an ecosystem that she believes will help create movement to drive investment into Africa.
Clustering in expertise
When asked if companies within the CFC would be able to tap into the larger balance sheets of Moroccan banks for project and trade finance, Bernoussi says that’s not the objective. Instead she contends that the CFC will become a truly successful platform if it can help channel more capital from the North (Europe and the Americas), from Asia and from other markets into Africa. Right now, she says, Africa represents less than 5% of global FDI flows.
She is confident that clustering in organisations that have a clear African mandate and focus will help accelerate and increase investment flows to Africa and also create a critical mass of expertise and partners to work more closely together. “We are creating a cluster of skills and knowledge, an ecosystem of bankers and professional services, who are setting base camp in the CFC. If you are serious about investing in Africa you need to be in Africa,” she adds.
The CFC offers some clear advantages to investors. Members benefit from streamlined administrative processes, the accompanying physical infrastructure (currently in the final stages of completion) and also fiscal benefits, but the real added value will be in gathering African investors to share ideas and information.
To this end, the CFC is organising workshops and commissioning papers on sectors and countries, to be compiled by experts through their partners. These will be made available to the members.
Leader in green finance
The CFC wants to position itself as a leader in sustainable and green finance. Africa, says Bernoussi, is the most vulnerable continent when it comes to climate change but it also has the biggest potential in green finance. “We’ve managed to bring in funds focusing on green investments, companies such as Global Nexus or Finance in Motion. Expertise will come from members of the community, and raising awareness through events.”
The organisation also wants to become a regional hub for Islamic finance (Bahrain leads in the Middle East and Malaysia in
Asia). The way to do it, Bernoussi says, is by crowding in other partners in this sector and again creating expertise and know-how clusters.
Casablanca Finance City has been ranked the number one African financial centre since 2015 by the Global Financial Centres Index, a UK-based think-tank. This is a major achievement for the CFC because the rating not only considers the ease of doing business and other international and well-known indicators, but also because it seeks feedback and viewpoints from international players in financial services.
Bernoussi does not see the CFC in terms of competing with African financial centres but rather as responding to the need to strengthen and create stronger financial centres across the continent. “Africa will need multiple financial centres to serve the continent,” she says. In an interconnected world, these will have to work together in the same way that CFC has already partnered with others, such as the financial centre in Astana (for Islamic Banking), the City of London (on derivatives, insurance and real estate) or Paris (on financial innovation).
She says that Morocco’s re-entry into the AU and also more recently, the ECOWAS regional economic community, has helped the cause. This is critical because without greater regional integration, the scale demanded by investors is simply not there.
This is why the CFC is partnering with African investment promotion agencies. For example, Yewande Sadiku from the Nigerian Investment Promotion Commission was in Morocco in March to help establish stronger ties between CFC members and Nigerian partners and share information and data on opportunities and the projects seeking investments.
“We’re a truly African financial centre. Our members cover 46 countries in Africa,” Bernoussi says. She adds that without the continent coming together and creating these clusters of knowhow and expertise where different stakeholders pool together, investment flows will remain insufficient to transform the continent.