Future of the Moroccan Defense Industry-Market Attractiveness, Competitive Landscape and Forecasts to 2023

Table of Contents

1. Introduction 7

1.1. What is this Report About? 7

1.2. Definitions 7

1.3. Summary Methodology 9

1.4. About Strategic Defense Intelligence 10

2. Executive Summary 11

3. Market Attractiveness and Emerging Opportunities 13

3.1. Current Market Scenario 14

3.1.1. Military Fleet Size 14

3.1.2. Procurement Programs 19

3.1.3. Key Drivers and Challenges 20

3.2. Defense Market Size Historical and Forecast 21

3.2.1. Moroccan defense budget is expected to register a CAGR of

2.12% over the forecast period 21

3.2.2. Counter-terrorism, border security, and the need to modernize outdated defense equipment are expected to drive Morocco’s defense expenditure 23

3.2.3. Defense expenditure as a percentage of GDP is expected to average 3% over the forecast period 25

3.3. Analysis of Defense Budget Allocation 27

3.3.1. Capital expenditure’s share expected to increase over the forecast period 27

3.3.2. Capital expenditure expected to grow at a CAGR of

2.10% over the forecast period 29

3.3.3. Per capita defense expenditure expected to increase during the forecast period 31

3.4. Homeland Security Market Size and Forecast 32

3.4.1. Moroccan homeland security expenditure expected to increase at a CAGR of

7.32% 32

3.4.2. Human trafficking, drug smuggling, and cybercrime form the major components of homeland security expenditure 34

3.4.3. Morocco is at some risk from external and internal threats 36

3.4.4. Morocco faces some level of threat from foreign terrorist organizations 37

3.4.5. Morocco has a terrorism index score of

0.1 39

3.5. Benchmarking with Key Global Markets 40

3.5.1. Morocco is the fourth largest defense spender in the North African region 40

3.5.2. Morocco’s military expenditure is low when compared to the largest defense spenders, but on par in comparison to other African countries 42

3.5.3. Morocco allocates a moderate percentage of its GDP to defense 43

3.6. Market Opportunities: Key Trends 44

3.6.1. Top 10 Defense market sectors by value (US$ Million) – Projections over period 2018-2023 44

4. Defense Procurement Market Dynamics 45

4.1. Import Market Dynamics 46

4.1.1. Defense imports to be driven by modernization initiatives over the forecast period 46

4.1.2. Morocco imports the majority of its arms from Europe 47

4.1.3. Ships accounted for the majority of defense imports during 2012-2016 48

4.2. Export Market Dynamics 49

4.2.1. Morocco does not export arms due to its under-developed domestic arms industry 49

5. Industry Dynamics 50

5.1. Market Regulation 50

5.1.1. Morocco does not disclose any offset obligations imposed by the country 50

5.1.2. Foreign direct investment (FDI) is determined on a case-by-case basis 50

5.2. Market Entry Route 51

5.2.1. Budgeting Process 51

5.2.2. Procurement Policy and Process 53

5.2.3. Government-to-government agreements are the preferred market entry route for foreign OEMs 53

5.2.4. Joint venture and license manufacturing agreements provide an attractive market entry route 53

6. Competitive Landscape and Strategic Insights 54

6.1. Competitive Landscape Overview 54

7. Business Environment and Country Risk 55

7.1. Economic Performance 55

7.1.1. GDP Per Capita 55

7.1.2. GDP, Current Prices 56

7.1.3. Exports of Goods and Services (current LCU Billion) 57

7.1.4. Imports of Goods and Services (current LCU Billion) 58

7.1.5. Gross National Disposable Income (US$ Billion) 59

7.1.6. Local Currency Unit per US Dollar 60

7.1.7. Market Capitalization of Listed Companies (US$ Billion) 61

7.1.8. Market Capitalization of Listed Companies (% of GDP) 62

7.1.9. Government Cash Surplus/Deficit as a Percentage of GDP (LCU) 63

7.1.10. Goods Exports as a Percentage of GDP 64

7.1.11. Goods Imports as a Percentage of GDP 65

7.1.12. Services Imports as a Percentage of GDP 66

7.1.13. Service Exports as a Percentage of GDP 67

7.1.14. Foreign Direct Investment, net (BoP, current US$ Billion) 68

7.1.15. Net Foreign Direct Investment as a Percentage of GDP 69

7.1.16. Mining, Manufacturing, Utilities Output LCU Billion 70

8. Appendix 71

8.1. About SDI 71

8.2. Disclaimer 71

List of Tables

Table 1: Moroccan Army Strength 14

Table 2: Moroccan Navy Strength 17

Table 3: Moroccan Air Force Strength 18

Table 4: Moroccan Ongoing Procurement Programs 19

Table 5: Moroccan Future Procurement Programs 19

Table 6: Moroccan Defense Expenditure (MAD Billion & US$ Billion), 2014-2023 21

Table 7: Moroccan GDP Growth vs. Defense Expenditure as a Percentage of GDP, 2014-2023 25

Table 8: Moroccan Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 27

Table 9: Moroccan Defense Capital Expenditure (MAD Billion & US$ Billion), 2014-2023 29

Table 10: Moroccan Per Capita Defense Expenditure (US$), 2014-2023 31

Table 11: Moroccan Homeland Security Expenditure (MAD Billion & US$ Billion), 2014-2023 32

Table 12: Terrorism Index, 2018 37

Table 13: Benchmarking with Key Markets – 2014-2018 vs. 2019-2023 40

Table 14: Top 10 Morocco Defense Market Sectors by Value (US$ Million) – 2018-2023 44

Table 15: Moroccan Budget Formation Timetable 52

Table 16: Competitive Landscape of the Morocco Defense Industry 54

List of Figures

Figure 1: Moroccan Defense Expenditure (MAD billion), 2014-2023 22

Figure 2: Moroccan Defense Expenditure (US$ billion), 2014-2023 22

Figure 3: Moroccan GDP Growth vs. Defense Expenditure as Percentage of GDP Growth, 2014-2023 26

Figure 4: Moroccan Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 28

Figure 5: Moroccan Capital Budget Allocation (MAD Billion), 2014-2023 30

Figure 6: Moroccan Capital Budget Allocation (US$ Billion), 2014-2023 30

Figure 7: Moroccan Per Capita Defense Expenditure (US$), 2014-2023 31

Figure 8: Moroccan Homeland Security Expenditure (MAD Billion), 2014-2023 33

Figure 9: Moroccan Homeland Security Budget (US$ Billion), 2014-2023 33

Figure 10: Terrorism Heat Map, 2018 36

Figure 11: Terrorism Index, 2018 39

Figure 12: Benchmarking with Key Markets – 2014-2018 vs. 2019-2023 41

Figure 13: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2017 and 2022 42

Figure 14: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2018 43

Figure 15: Moroccan Defense Import Trend (US$ million), 2012-2016 (TIV values) 46

Figure 16: Moroccan Defense Imports by Country (%), 2012-2016 47

Figure 17: Moroccan Defense Imports by Category (%), 2012-2016 48

Figure 18: Moroccan GDP Per Capita at Constant Prices (US$), 2015-2025 55

Figure 19: Moroccan GDP, Current Prices (US$ Billion), 2015-2025 56

Figure 20: Moroccan Exports of Goods and Services (current LCU Billion), 2005-2014 57

Figure 21: Moroccan Imports of Goods and Services (current LCU Billion), 2005-2014 58

Figure 22: Moroccan Gross National Disposable Income (US$ Billion), 2007-2014 59

Figure 23: Local Currency per USD, 2015-2024 60

Figure 24: Moroccan Market Capitalization of Listed Companies (US$ Billion), 2005-2012 61

Figure 25: Moroccan Market Capitalization of Listed Companies (% of GDP), 2005-2012 62

Figure 26: Moroccan Government Cash Surplus/Deficit as a % of GDP (LCU), 2005-2012 63

Figure 27: Moroccan Goods Exports as a % of GDP, 2005-2013 64

Figure 28: Moroccan Goods imports as a % of GDP, 2005-2013 65

Figure 29: Moroccan Services Imports as a % of GDP, 2005-2013 66

Figure 30: Moroccan Service Exports as a % of GDP, 2005-2013 67

Figure 31: Moroccan Foreign Direct Investment, net (BoP, current US$ Billion), 2005-2013 68

Figure 32: Moroccan Net Foreign Direct Investment as a % of GDP, 2005-2013 69

Figure 33: Moroccan Mining, Manufacturing, Utilities Output (LCU Billion), 2005-2014 70