The government will submit to parliament a draft bill with a set of regulations for the introduction of Islamic finance products in the country within the next few weeks, General Affairs and Governance minister, Najib Boulif, told Reuters. “We expect parliament to approve the bill before the end of this year. The current plan is to allow a gradual introduction of Islamic banks to preserve the competitiveness of existing(conventional) banks,” said Boulif.

Morocco’s free trade zone with the EU for industrial products became effective on Thursday (March 1st), less than a fortnight after Morocco and the European Union approved an historic trade deal lifting agricultural and fish export tariffs.

The 27-member bloc also remains the kingdom’s biggest trading partner (59%), well ahead of Asia (21%) and America (13.5%), and Prime Minister Abdelilah Benkirane has vowed to maintain the long-standing partnership.

Benkirane also recognises the need for diversification.

Minister for Moroccans Living Abroad (MRE) Abdellatif Maazouz said in January that the euro crisis would pose a threat to Morocco over the coming years but warned against being overly pessimistic.

“It also offers opportunities if we can boost our export market shares, foreign investment and tourism in our traditional markets while also exploring new nearby markets, including the Middle East and sub-Saharan Africa,” he said.

Entering other markets is essential for Morocco, according to economist Hicham Madouji. The country needs to look for new export markets as the European economies, which are Morocco’s biggest export customers, have yet to recover from the crisis, he added.

Higher energy and food import bills coupled with weaker growth in tourism receipts and some exports pushed the current account deficit to 6.5 percent of gross domestic product in 2011 versus 4.3 percent in 2010, Finance and Economy Minister Nizar Baraka said at a news conference.

Based on Reuters’ calculations, the balance of payments shortfall rose 59 percent to 53.2 billion dirhams in 2011 from its level in 2010.

Asked if the widening current account deficit gap would force Rabat to tap international bond markets, Baraka told Reuters: “There is no pressing need … but we remain eligible for a potential issue”.

Idriss Azami al-Idrissi, minister in charge of the budget, told Reuters: “A bond issue in 2012 is not on the agenda as we speak but it’s not to be excluded.

High speed train

Morocco’s plan to construct a high-speed rail network is drawing mixed reviews, with some legislators and ordinary citizens saying the money is needed to meet other goals.

The project will cut travel times between Tangier and Casablanca from more than five hours to just over two. By 2016, some 8 million passengers per year are expected to use the new line, which is the first step in a master plan aimed at building over 1,500km of new tracks by 2035.

The government is convinced of the need for the project. “Faced with the rapid growth of rail transport, we closely studied the most suitable technology for developing the sector,” Transport Minister Karim Ghellab said on Monday (February 1st) in Tangier.

“The study concluded that there would be higher socio-economic productivity for the high-speed technology in comparison with classical railways,” Ghellab said at a signing ceremony of the contract for the planned high-speed rail project. “In spite of the former’s reasonable additional cost, it’s characterised by economic features that greatly exceed the advantages of the latter.”

“Work on the high-speed train will kick off next June, while the exploitation of the project will begin in December 2015,” the minister added at the ceremony, which was presided over by King Mohammed VI.

The contract signed on Monday between the state and the National Railway Office is for a 20 billion-dirham, 2010-2015 project under a wider government programme for social and economic development. The project is to be funded by the state, the Hassan II Fund for Social and Economic Development, and foreign loans. A total of 33 billion dirhams will be invested in developing rail transport as a whole.