Pursuing “investment fashions” raises the deaths of emerging projects in Morocco

The “investment fashions” spread in Morocco, after a large number of investors rushed to certain sectors without sufficient study, which led to their heavy losses. In the luxury real estate sector, exaggerated expectations led to a decline in demand after 2015, leaving many of these investors with real estate that is not for sale except with a loss. The same applies to the peasants, as the “avocado” boom and the almonds attracted the rapid profit, but the scarcity of water and the high costs were harmful to the calm, and lost hectares of the crops its profit.

During the last decade, investment in “Franchise” (commercial concession) has become a fashion in Morocco, where many people rushed to open branches of international restaurants or famous cafes, in the hope of achieving quick profits, influenced by the idea that was promoted by “Al Frances” companies regarding “the global brand sells themselves”, which prompted many investors to borrow and open projects without studying the market, but they are in some cities, especially The medium, they collided with insufficient request on their brands, which led to the closure of some branches after only months of opening, in addition to other problems related to the high costs of the brand, rent and imported materials, which made it difficult to achieve sustainable profits, in light of fierce competition with Moroccan projects at lower prices that were stronger than they expected.

To avoid falling into the “fashion” investment trap, which is often driven by media noise and temporary waves, economic experts and specialists in the conduct of contracting have alerted to the necessity of a rational and studied approach, which passes through a depth study of the market to understand the level of demand and the availability of production factors, which ensures that investment decisions are taken based on realistic data and not on emotional expectations; In addition to the need to beware of commercial “propaganda” and misleading advertisements that aim to create the illusion of rapid profit, with a focus on sustainable investment that achieves real value in the long term, whether in terms of innovation or social and environmental influence, as the best way to build a stable wealth and avoid losses resulting from temporary fluctuations.

“Social Media” gave up investors

Social media has contributed greatly to strengthening the “fashion” of investment in certain areas, as it has become a major platform for publishing information and promoting investment opportunities. Through a varied content, whether articles, videos, or publications, certain sectors are highlighted as profitable and promising, which prompted many investors, especially the new, to go towards these areas without an in -depth study. For example, Morocco has witnessed in recent years a widespread promotion through social media to invest in luxury real estate, which led to unrealistic rise in prices, before the demand declined, leaving many investors stuck to real estate that is difficult to sell without a loss.

In this regard, Yunus Ait Ahmadoush, a university professor in the macroeconomic and financial economy, explained, commenting on an analysis he accomplished under the title “Running behind the Investment Fashion in Morocco: Some Lessons from Reality”, that “social media depends on the psychological impact of the common content, where the wide spread of stories of success in a specific field can create the impression that this field is the perfect choice for investment; It is an effect that may be misleading, especially if these stories do not reflect the full reality of the market.

Ait Ahmadoush stressed, in a statement to Hespress, the great role that digital influencers play in directing investor interests towards certain fields, explaining that “when a person with a wide influence promotes an investment opportunity, his followers may see a reliable recommendation, which leads them to invest without sufficient research”, noting that “in Morocco a wave of investments spread in the ‘Franchise’, where many thought that many brands thought The world sells itself; However, some projects faced problems, such as poor local demand and high costs, which led to their closure within a few months after their opening.

The same spokesman considered that “the inaccurate or exaggerated information spread through social media can lead to misleading investors at times, as investment opportunities are promoted with unrealistic promises, which causes individuals to invest without awareness of the potential dangers”, referring that “the past period witnessed many cases of emerging projects that invested in the areas of” popular “without proper financial planning, before they stopped quickly due to the lack of actual demand Or mismanagement. ”

Multiple factors of project failure

There are many factors contributing to the failure of newly established projects and investments, the most prominent of which is the blind tradition, as investors reproduce successful projects without real feasibility study or an understanding of the target market, which often leads to entering the market with products or services that do not meet the needs of customers, which ends with the project to failure. For example, Morocco witnessed a boom in the opening of cafes and restaurants famous for global brands, but many of them were forced to close quickly due to the strong competition from the lowest local brands, which better adapt to the purchasing power of the Moroccan consumer.

The professor of macroeconomic and financial economy returned to emphasize that “the lack of vital information is another important factor in the failure of the projects,” explaining that “the lack of sufficient information about the market and competitors, and the needs of customers makes it difficult for investors to make enlightened decisions”, and informed that “some foreign businessmen invested in Morocco in small factories to produce local cosmetic products, relying on expectations of high demand, but they collided The fact that the market is dominated by strong importers and well -known brands, which made their entry into the market almost impossible and quickly bankrupt them. ”

For her part, Ibtisam Mumkouri considered an accredited accounting and consultant in the conduct of contracting, in a statement to Hespress, that “the failure of many projects in Morocco, especially in the emerging and industrial sectors, is closely related to fundamental factors related to the financial management of the contracting and legal and administrative challenges,” explaining that “when talking about financial resources management can be registered significantly among investors at the level of contracting culture, and separation Between personal financial disclosure and contracting accounts, where investors, especially new entrepreneurs, commit fatal errors, “noting that” this imbalance leads to confusion in managing liquidity, which makes the project unable to cover operational costs, especially in the critical stages that require financial stability to ensure the continuity of activity. “

Malekouri added in the same context: “In addition, the poor allocation of the budget is one of the decisive factors that may accelerate the collapse of projects,” inferring what the Kingdom witnessed during the recent years of startups in the technology sector, has obtained promising initial funds, but it chose to focus on costly marketing campaigns and rapid expansion without achieving a sustainable revenue base, and confirmed that “this approach led to the depletion of financial resources in record time, some, He forced these projects to close before you can achieve any tangible return. ”

The same expert explained that “with regard to legal and administrative challenges, it represents a major obstacle to investors, especially in the industrial sector. Slowness in administrative procedures, and the complexity of rulers related to obtaining the necessary licenses and permits, often leads to delaying the launch of projects for long periods, which results in an increase in operational costs, and the project’s ability to withstand the financial burdens in the long run, so that a number of investors have to abandon their entire projects after years of waiting and confronting endless bureaucratic obstacles.