“Innovation, one of the key actions on which Morocco should focus all its efforts”

Innovation, an essential value for getting through the health crisis

“ The Covid-19 health crisis has revealed the fragility of VSEs and SMEs: according to the World Bank, nearly 23% of VSEs and SMEs in Morocco had closed or were about to close their doors in November 2020. But it has also pushed some to show innovation and adaptability in order to reinvent themselves and adjust to the new context. Others have even managed to derive some benefit from the crisis”. This is how Pierre-Yves Morier, Deputy Head of Mission and Head of Cooperation at the Embassy of Switzerland in Morocco, set the scene for the speakers. For the expert, “it is no coincidence that innovation was mentioned more than once in the new economic model recently presented to HM King Mohammed VI”. Today, more than ever, the imperative is to rethink operating methods, tap into new sources of growth such as innovation, and adapt to the drastic changes affecting several business sectors worldwide.

For Rachid Amrani, Principal Manager, Advice for Small Businesses at the European Bank for Reconstruction and Development (EBRD): “innovation is one of the key actions on which Morocco should focus all its efforts. This innovation must be comprehensive”. In his view, it is essential to prepare an enterprising and innovative generation. And this should begin in the very first years of schooling in order to instil these two values in future entrepreneurs.

“ Damane Oxygène and Relance weigh down the room for manoeuvre of SMEs/VSEs”

According to Mohamed Talal, Vice-President of CGEM and Chairman of the VSE-SME Committee, the repercussions of the Covid-19 crisis are only just beginning to materialise. In his view, the financial difficulties that continue to weigh on the health of small and medium-sized enterprises may persist unless new financing avenues are found for them. “The Government has certainly done substantial work by setting up Damane Oxygène and Damane Relance, but it must be borne in mind that these debts do not create value. Companies today find themselves in a delicate situation with regard to banks, which are more hesitant than before to finance business projects”, he said.

Throughout the webinar, the representative tirelessly stressed the extreme importance and urgency of finding future financing solutions to absorb the Damane Oxygène and Relance debts, notably through structured financing, including mezzanine debt, which would allow companies to regain bankable ratios and face this new market.

Maroc PME: MAD 544 million invested and 2,366 direct jobs created during the crisis

Yet the State’s support mechanisms seem to be working. The Director General of Maroc PME, Brahim Arjdal, indicated that his agency has set up a support programme dedicated to 77 investment projects linked to the manufacture of equipment used in the fight against the Covid-19 pandemic. These projects, with a total investment of 544 million dirhams, created 4,325 jobs, including 2,366 direct jobs. They covered several activities, including the production of masks, filters and hand sanitiser gels. At the same time, the agency developed a consulting and technical expertise offer to support the roll-out of recovery plans for VSMEs. 624 projects benefited from it in the areas of production and supply chain optimisation, the digital transformation of the company, securing and developing sales, cash management and financing, and developing a recovery and risk management plan. But this does not mean the agency is resting on its laurels. Mr Arjdal indicated that a reconfiguration of the current “Mouwakaba” and “Istitmar” programmes is under way in order to offer more advantageous packages, notably through simplified access and payment conditions.

Digital, green and inclusion: priorities of the EBRD and SECO

At the level of the administration, digitalisation is a major undertaking to streamline processes and to establish a climate of trust, by encouraging and supporting innovative approaches. In this regard, Rachid Amrani recalled that the EBRD is focusing on 3 main areas in its five-year vision: digital, green and inclusion. In 2020, the EBRD launched a major initiative called the “parc business initiative”. This platform hosted several debates between national and international experts on business after Covid-19. Scheduled for publication next July, a white paper summarising the conclusions of these discussions will set out clear recommendations for the various stakeholders.

Swiss cooperation, which for its part intends to expand its scope of action in Morocco, is implementing several global and regional projects in various business sectors, such as textiles and agro-industry, finance and insurance, and is planning a new cross-cutting project focused on intellectual property. Another bilateral project, this time in the sustainable tourism sector, is currently being carried out in partnership with the Ministry of Tourism and the Moroccan Agency for Tourism Engineering in the Béni Mellal-Khénifra region.

This webinar devoted to VSEs and SMEs shed some light on their future following this unprecedented health crisis.