Morocco: Evaluation of the bank assistance to the telecommunications sector, 1996-2004

Objective

The aim of the study is to evaluate the Bank Group’s assistance in Morocco in the telecommunications sector as well as its impact on the country’s development. This evaluation was conducted on the basis of the Bank’s guidelines and at two levels namely: (i) the Bank’s strategies within the framework of the CSP and; (ii) the outcomes and impacts of interventions  and activities carried out.

Main Lessons

• Borrower Commitment: The commitment of the Borrower is essential for the success of the opening up of telecommunications markets to competition. It was the indispensable measures taken by the Moroccan Government to meet the requirements of a successful competition such as the adoption of adequate legal framework and the establishment of an independent regulatory body that fashioned investor confidence. Consequently, it is necessary for the Bank to secure the effective commitment of the borrower in the form of permanent dialogue and creation of an appropriate environment for attracting investments.

• The presence of a powerful competitor in the cellular phone market can be highly useful to initiate competition in the entire telecommunications sector. Even the threat of competition can generate dynamism and productivity for the dominant operator and prompt it to reduce its prices demonstrating the importance of competition in encouraging the reorganization of traditional operators, accelerating the reform of the sector, lowering tariffs, improving the quality of service and contributing to the expansion of universal service.

• Strong Regulatory Capacities: The institutional capacity and independence of the regulatory organ are essential for the success of competitive bidding. The importance attached to open and transparent procedures in the granting of the second GSM licence was key to building the confidence of investors and the high cost of the licence fee.

• Regional Synergies: For the Bank, a successful liberalization in a given country could have a positive snowball effect on an entire region. The success chalked by Morocco in the award of the second GSM licence contributed to accelerating the privatization of Maroc Télécom as well as privatization and reform processes in other sectors. Furthermore, other countries such as Algeria and Mauritania have reformed their mobile telephony sector drawing on the example of ANRT.

Main Recommendations

Recommendation(s) to the Bank:

• The Bank’s evaluation operations should lead to the preparation of a CSP completion report to review the achievements in relation to the initial proposals.

• Portfolio reviews should be carried out in a more regular manner, through harmonized country teamwork, including all the sectors.

• The Bank should continue to provide its support to economic reforms in Morocco and as much as possible, through joint financing with the World Bank since the two institutions have a valuable capacity for dialogue to ensure the success of programmes to which they provide assistance.

• With the DSII that has taken over from PASPT&I in terms of the intensification of reforms of the sector in the country, the Bank should endeavour to share with other member countries, and this in coordination with the World Bank, the experience acquired in the area of reforms of the post, telecommunications and information technologies sector.

Recommendation(s) to the Borrower:

• The Government should pursue reforms of the sector in order to enhance its contribution to the economy and increase the competitiveness of Moroccan enterprises. To this end and for the ongoing DSII, it should maintain the same level of commitment as it did for the PASPT&I, particularly regarding the reform of the post and Its.