The Moroccan kingdom, thanks to efforts such as boosting agriculture and extensive investments in sectors such as automotive and green energy, has managed to rank fourth among the countries with the most signed deals of a large value in the MENA territory.
Ernst & Younger's (EY) report on mergers and acquisitions in the MENA region shows that 524 deals were registered in the first nine months of 2022 with a total value of $55.2bn. According to the report, UAE maintains its leading position with 155 deals worth a total value of $17.2bn in the first nine months of 2022, followed by Egypt with 99 deals, Saudi Arabia with 58 deals worth $3.4bn, 22 deals from Morocco worth $1.9bn and 10 deals from the Sultanate of Oman worth approximately $700m.
The report added that deal values in the region fell 23% despite rising inflationary pressures, weaker economic demand and global market turmoil, resulting in a modest 6 per cent increase in transaction activity compared to the previous year.
Domestic deals were the "key driver of activity" in the region, accounting for 51% of total M&A deals and 33% of deal value during the nine-month period. Despite the current "economic uncertainty", Brad Watson, head of MENA Transactions and Technical at EY, said: "Regardless of the global financial uncertainty we live in, the MENA region continued to see increased M&A deal activity on the back of anticipated financial progress led by higher costs".
The top five sub-sectors within the MENA area by value of deals filed include transportation, real estate, consumer products, technology, banking and capital markets.
Anil Menon, head of M&A Advisory and East and North Africa Capital Markets Centre at EY, said: "What is striking about these most recent results is the increase in the M&A exercise, not just from conventional markets such as the UAE and Saudi Arabia". Rising crude oil costs, initiatives to attract investment to the area, and the search for buyers from within the MENA region for financing in overseas markets are the main drivers of merger expansion.
Morocco continues its bold export drive. To this end, the government assigned the agricultural sector the status of "one of the pillars on which to build" for the country's development over the next 10 years, targeting the UK as a priority partner. The North African country has ambitious plans to capitalise on the fast growth of its exports, so much so that in the first nine months agricultural exports exceeded 200,000 tonnes to the UK alone. However, with non-agricultural activity increasing by 3.3%, the national economy is expected to grow by 1.4% in the fourth quarter of 2022.
The slowdown in economic activities in Morocco is due to global crises such as the conflict in Ukraine and sanctions imposed on Russia. Contributing factors, such as sanctions, are creating historically high prices that are weighing down the global economy. Tighter monetary policies and higher interest rates by central banks to reduce inflation are also expected to have a negative impact on global economic growth.