Strengthening Economic Ties Between Spain and Morocco
The economic relations between Spain and Morocco have significantly improved since the initial migratory crisis in Ceuta and Melilla in 2021, when approximately 10,000 individuals crossed the El Tarajal jetty and there was a series of attempts to scale the fence separating Melilla from Morocco. During that tumultuous year, Spanish investment in Morocco plummeted by 55.7%. However, recent reports indicate a remarkable recovery, with this investment increasing by nearly 55% compared to the figures for 2024, as initially reported by eleconomista.es.
The crisis in 2021 was triggered by the decision of Prime Minister Pedro Sánchez's government to allow Brahim Ghali, the leader of the Polisario Front and president of the self-proclaimed Sahrawi Arab Democratic Republic, to enter Spain for COVID-19 treatment at a hospital in Logroño. This action sparked a prolonged diplomatic rift between the two nations, with reconciliation only occurring in March 2022 when the Spanish government endorsed Morocco's autonomy plan for Western Sahara. Following this pivotal moment, bilateral cooperation resumed between the two countries. Experts believe that the current diplomatic tensions stem from Sánchez's visit to Algeria on July 20, a major strategic rival of Morocco in the region due to their competing interests in the Maghreb. Nevertheless, the Spanish government has firmly denied any links between this trip and the ongoing crisis, and Morocco has not raised any formal objections to the diplomatic visit.
Recent Trends in Spanish Investment
Despite the initial downturn in investment following the diplomatic crisis, the trajectory of Spanish net investment has shown a downward trend, closing 2023 with a mere €24 million, according to DataInvex, the official registry of international investment data managed by ICEX, a public business entity under the Ministry of Trade. Experts consulted by eleconomista.es noted that this decline in investment is relatively normal, as after the surge in 2022, companies require time to stabilize and solidify their projects in subsequent fiscal years. However, rather than halting their investments in Morocco, Spanish businesses experienced a rebound last year, with gross Spanish investment flow rising to €95.231 billion, a stark increase from €18.546 billion the previous year.
Over the past decade, Morocco has emerged as the leading destination for Spanish investment in Africa, positioning Spain as a key economic partner, though it still lags significantly behind its primary European ally, France. In 2023, a High-Level Meeting between Spain and Morocco was held in Rabat, resulting in the signing of a financial protocol worth €800 million aimed at facilitating new Spanish projects in Morocco. This framework was reiterated in Madrid at the end of last year, where 15 agreements were established to strengthen political dialogue and cooperation between the two nations, although the current diplomatic situation poses challenges to this collaboration.
