Moroccan defence spending will rise from US$3.8 billion in 2014 to US$4.5 billion in 2018 driven by the procurement of military aircraft, armoured vehicles, radar systems, diesel-electric submarines and patrol ships to boost border security and fight trans-national terrorism.
In a new report entitled “The Future of the Moroccan Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2018”, Strategic Defense Intelligence (SDI) said Moroccan defence spending will grow at an annual rate of 4.4% between 2014 and 2018.
“This growth is primarily due to the government’s steps to combat internal and external terrorist attacks, strengthen border security and procure new defense systems. Per-capita defense expenditure is expected to grow during the forecast period from US$113.7 million in 2014 to US$130.1 million in 2018.
“The capital expenditure budget is forecast to increase from US$1.1 billion in 2014 to US$1.4 billion in 2018, recording a CAGR of 5.62%, due to the government’s (defence) modernization plans,” the report read.
The report also projects that the country’s budget for homeland security will increase over the forecast period driven by increasing problems of human trafficking, transnational arms and drug smuggling and internal security demands.
“Demand for equipment over the forecast period is mainly expected to revolve around fighter aircraft, diesel electric submarine, surveillance and monitoring equipment and patrol ships.”
The rise in defence spending will also be spurred by external security threats which include the high risk of attacks from internal and external terrorist groups and ongoing border conflict with Algeria. The high risk of future conflict between Casablanca and the Polisario Front guerrilla movement in the stand-off over the Western Sahara also pushes Morocco to keep its armed forces well-equipped.
However, the country does not have a local defence industry and the United States and its North Atlantic Treaty Organisation (NATO) partners are expected to capitalise on existing military ties to remain favourites in providing the defence procurement and maintenance needs of the Moroccan arsenal.
“Morocco also remains highly dependent on US companies for the maintenance and support of its equipment and weapons. Furthermore, being an associated country of the European Union (EU), Morocco gives preference to EU nations, particularly France, in terms of trade.
“Therefore, as long as these (bilateral and trade) relationships persist, the US and France are set to dominate the Moroccan defense market in the forecast period, creating an obstacle for the suppliers of the Chinese and Russian territories,” the report says.
However, the report expresses fears that because Morocco is classified as a ‘highly corrupt’ country by the international transparency watchdog Transparency International, defence procurement deals may also be tainted with corruption.
“The lack of transparency in the matters of national defence and security policy and the absence of internal audit (systems) for the Ministry of Defence (MoD) has aggravated the level of corruption within the (defence) sector,” the report says.