When it comes to the financial sector and the insurance industry in particular, Morocco borrowed a great deal from the French model. This is particularly striking in the case of Morocco's state controlled Caisse de Depot et de Gestion (CDG), which even borrowed its name from France's Caisse des Dpts et Consignations (CDC). CDG's operating model is almost entirely similar to its French peer and one can only read the comments of the CDC CEO to understand what Morocco's CDG is all about. In an article published on September 19 in the French business newspaper Les Echos, the head of CDC stated, "the Caisse des Dpts is not just an arm of the state. Instead, it (i.e.: CDC) intervenes as a big equity investor with the objective of helping French corporations by providing them with a stable equity partner." As such, CDC is a major shareholder in many of France's global corporations such as food giant Danone and hotel chain Accor, companies that the French government determined as being components of strategic industries.
Morocco's Caisse de Dpt et de Gestion (CDG) is working hard to follow the same path and its latest decisions are likely to redraw the map of the Moroccan insurance sector's ecosyctem. Its very recent equity investment in two major Moroccan insurers and in a diversified private industrial group Holmarcom is the first indicator of a strategy that resembles that of CDC, with far reaching consequences on the sector.
CDG's mission is to manage and invest vast financial assets and take ownership of equity in industries also considered by the Moroccan government as critical to the economy. CDG's investments can be found in Morocco's recognizable corporations, from BNDE Bank to the National Lottery (Loterie Nationale). But investments in those companies and industries followed a very prudent approach and were limited in value. CDG Dveloppement is a subsidiary of CDG, which focuses on the sectors of real estate, tourism, municipal services, the environment and small and mid-sized companies to support the development of these sectors in accordance to government priority.
Furthermore, CDG, which is managed by Mustapha Bakkoury, has been active in managing several state institutions' financial resources, including the social security administration CNSS, unclaimed funds held by banks, funds deposited in trust with solicitors and notaries, and gathers savings on behalf of the state treasury.
Until recently, CDG did not allow itself to risk more than 5% of its assets and refrained from taking commercial risks with business entities. However, this has changed recently when CDG announced its acquisition of 40% equity in the insurance firms Sanad and Atlanta. By doing so, it is clearly stepping up risk-taking activities and is positioning itself as an independent investor in companies that are cash hungry but which have positive prospects. Up until recently, CDG has already been pouring limited amounts of money into the banking/insurance sector with investments in BP Bank, CHI, Maroc Leasing and Sofac Crdit. However these investments were not as significant that the ones made in Atlanta and Sanad.
These latest acquisitions open CDG to more risk but such risk is necessary to guarantee that financial resources are spread and distributed in key growth markets.
© The North Africa Journal 2005
