Discovering the Economic Potential of Dakhla, Morocco
The economy of Morocco is widely regarded as a somewhat liberal one. Businesses are carried out practically in the same way as in Western countries, with demand and supply dictating affairs.
Currently, the kingdom is intensifying developmental efforts in its southern parts with the aim of boosting overall economic growth. One of the most notable cities in these southern provinces that are the focus of these efforts is Dakhla. We discuss in this article some exciting economic opportunities existing in this relatively popular tourist destination.
About Dakhla
Dakhla is a city in a disputed region in southern Morocco. For many years, there has been an intense debate on the status of this area. This is about whether it should rightly be under the North African country or be a country on its own.
The Spanish used to be in control of this region until they relinquished it in the 1970s. They called Dakhla Villa Cisneros during their time there. It served as the Spanish Sahara’s capital prior to 1975.
After the Spanish left, Morocco and Mauritania took charge of Western Sahara. Battle for the right to fully administer the region led to the Western Sahara War, which lasted about 16 years. Mauritania eventually gave up the region as a result of the war.
Today, Western Sahara, including Dakhla, is under the control of the Moroccan government. A little fraction of the region constitutes the Sahrawi Arab Democratic Republic (SADR).
This city spreads along the Atlantic Coast, around 400 kilometers to the north of Mauritania. It has a population of around 100,000 people, but this increases significantly during periods of the year. Many water sport enthusiasts frequent this location every year.
Unlike other parts of the Sahara, Dakhla appeals with its temperate climate. Languages that are commonly spoken here are Arabic, French, and Spanish, in that order.
Political and Economic Status of Dakhla
Having pointed out the contentious state of the Dakhla area, it might seem like one that will be politically unstable. But things are not as bad as many people from other countries, especially the West, might fear. Some people who have been here even describe it to be more tourist-friendly than other parts of Morocco.
There is significant political stability in this city, thanks to the heavy presence of the Moroccan government.
Although largely Islamic and having a monarchical system of government, Morocco, including Dakhla, operates somewhat according to “Western” ideals. Things are done in line with the rule of law. The country is one of the most liberal in this part of Africa.
As for the economy, the government allows the market forces (demand and supply) to dictate affairs. You are free to carry out business and own property as long as you are not doing anything illegal.
The economy is notably stable, and the government goes on taking steps to make the country more competitive.
Drive to Boost the Local Economy
A significant part of the efforts being made to boost the economy of Morocco focuses on the Dakhla area. The government has revealed plans to proceed with hundreds of projects there to make it more appealing to investors.
Recently, the president of the region, Yanja El Khattat revealed a budget of 77 billion Moroccan dirhams (MAD) (8 billion USD) aimed at enhancing the business environment in the period from 2015 to 2021. That amount will go toward the execution of roughly 650 projects.
Morocco aims to transform Dakhla into a link between it and other countries in Africa.
The Government Council has unveiled plans to construct a new port to the tune of MAD 1 billion (100 Million USD). The Dakhla Atlantic port, which will take seven years to build, will link Morocco to its African partners.
Earlier in the year, the Wali of Dakhla-Oued Eddahab region announced a series of projects during the celebration of the Throne Day. These included the construction of an institute of music and choreographic arts and installation of new electricity poles, along with energy-saving lamps.
Tourism in Dakhla
It is arguable that tourism is a major, if not THE major, attraction of this Western Saharan city. Dakhla is a beach destination, ideal for a variety of water sports.
Perhaps, as a result of the security fear of some foreign visitors, Moroccans account for the highest proportion of tourists to this location. People from other countries who visit are mostly those interested in water sports. Kitesurfing is a major draw for foreign visitors around here.
For foreign tourists who can overcome their fears (Dakhla actually seems to be safer than most people elsewhere think), this city is one of the more weather-friendly to visit in this region. It boasts a temperate climate and, as such, you don’t have to bother about the extreme heat of the Sahara.
The weather is practically the same all year.
Apart from kitesurfing, windsurfing and sailing are among the outdoor activities you can enjoy around here. There are also beautiful beaches where you can bask in the sun – if you can find a way to protect yourself against wind-blown sand.
If you are into bird watching, Dakhla Bay offers a great place to watch migratory birds, particularly flamingos. Tourists may also catch sight of dolphins and monk seals along the coast. There is the Rio of Oro Lagoon as well for those who might want to go fishing.
Agriculture and Fishing Industry in Dakhla
Agriculture – including, and maybe especially, fishing – is one of the focal points of the government for growing the local economy.
There is a Moroccan Green Plan to cultivate 1,000 hectares around the peninsula by 2020. Those 1,000 hectares are just a fraction of the 5,000 hectares announced by the Minister for Agriculture Aziz Akhannouch in 2017 for the creation of an agricultural zone in the territory.
Both small-scale and industrial farmers and producers can apply for plots in the agricultural zone. The current leading operators in the sector include Rosaflor, Sofropel, and Azura.
The major crops that are cultivated in the Dakhla area are tomatoes and melons. Cherry tomatoes constitute the bulk of agricultural exports from the region, with a production of up to 120 tonnes per hectare.
In the same vein, the Moroccan government is taking giant strides to develop the fishing sector. It gets a considerable part of the funds it spends on this from the European Union.
The country gets about €14 million annually from the EU to support the local fishing industry. Most of this money goes toward the development of the fishing sector in the in the coastal Sahara region, according to reports.
Among the projects that the government intends to execute, or has executed, with funding from the EU are a new, modern freezing facility, an aquaculture farm, and an aquaculture laboratory.
The Comptoir d’Agreage du Poisson Industriel (CAPI) in Dakhla for sale of pelagic fish was constructed with support from the EU.
The Fisheries Protocol, which made this funding possible, in return, allows up to 126 boats from the EU to fish in Morocco.
The fishing industry creates around 40,000 jobs in both direct and indirect investments in these regions, according to a release by Europeche.
Dakhla Real Estate Investment Opportunities
With more people expected to be drawn to Dakhla in the years ahead, coupled with developmental drive by the government, the city arguably offers great real estate investment opportunities.
People and entities who are in search of a wonderful place to make money in real estate may find this city perfect. Compared to the U.S. and Europe, it is a lot easier to get cheap property around here, at least for now.
There is a huge availability of land for either new construction or agro projects. In light of tourism, Dakhla may especially be suitable for people who are into the hospitality business. It may also not be a bad idea for those who desire to have a winter home in a different place.
Going by the rate of development in Morocco, you can expect cheap real estate investments you make today to be worth much more a few years down the line. Easy convertibility of the local currency, which is supposedly safeguarded in the law, also makes it easy to move out your profit if you so desire.
It should not be extremely difficult for people from elsewhere to invest in real estate around Dakhla. The process of purchasing is similar to that in Europe, especially in France. This means that the French may already have a better idea of investing in real estate there.
Friendly Tax Regime
One of the things that investors will find appealing about this city, and Morocco in general, is the tax system. It is quite friendly.
The kingdom does not have a wealth or inheritance tax. What’s more? Foreigners who are residents there get extra concessions based on their pensions.
Other Business Attractions
We discuss below a few of the other factors that portray the economic potential of Dakhla.
Natural resources
There is a considerable amount of resources available for those who may be considering setting up business here. In addition to agricultural and fishery resources, this region boasts an impressive range of mineral resources.
Morocco is a leading producer and exporter of phosphates in the world. Other minerals present in the region include gold, silver, copper, zinc, and iron.
Human resources
This kingdom boasted a population of more than 34 million people as of July 2018, according to an estimate by the CIA. Based on this figure, one may safely say that there is an adequate labor force on the ground for those who might be considering investing in Dakhla.
It’s claimed that more than half of the total population falls within the age bracket of 15-34 years.
It’s not just about the size of the available workforce, though. More and more people here are getting an education. A considerable proportion of the young people in the area can speak French, in addition to Arabic, plus a little Spanish and/or English in some cases.
The cost of labor, as would be expected, is cheaper, compared to Western countries. According to Minimum-Wage.org, the daily pay for an agricultural worker is about $7. People in industrial and commercial sectors, of course, earn more, but labor cost still remains relatively cheap.
Strategic Market
In addition to the above attractions, the location of Morocco makes it a wonderful place for making investments. It offers easy reach to people in Europe, Arab countries, and other Africa countries. This translates into easy access to the market for finished products.
In Morocco itself, there appears to be a positive change in the consumption habits of the people there, especially the young.
Getting To Dakhla
These days, you can get both domestic and international flights to Dakhla. At the center of the city is a very small airport, which has only one runway. The miniature size of this air transport facility is not exactly surprising, however.
Royal Air Maroc offers direct flights to the area, from both Casablanca and Agadir. You can also use Air Arabia Maroc to get there from Marrakesh.
People wishing to travel to Dakhla can also catch a flight from Las Palmas, the capital of Gran Canaria, in Spain’s Canary Islands. There are international flights from France and, probably, Germany as well.
If a land journey is your thing, you can access the city by road, but it’s a somewhat long journey. Buses are available from several major cities in Morocco. It is also possible to travel there by land from Mauritania in the south.
Conclusion
Although it is one of those places people can easily overlook for safety concerns, Dakhla offers impressive economic potential.
It is arguable that most people know the city more as a tourist destination, particularly perfect for kitesurfing. But it offers more than that. There are ample natural and mineral resources for those looking to invest. Cheap labor cost is another interesting thing to take note of.
Being a tourist and beach destination, Dakhla provides a chance to enjoy higher gains on real estate investments. The tax system in place is investor-friendly. Also, you should not find it difficult transferring or liquidating your investments there.
The Moroccan government has shown interest in promoting sustainable development in this area and other parts of the country. There are standards in place with a view to protecting the environment for the good of everyone living or doing business in the kingdom.
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