Leaked directive reveals depths of Algeria and Morocco’s ‘port war’

Strategic battle

Morocco aspires to enhance its control of international maritime trade routes by establishing and developing more ports along the lines of Tangier-Med Port.

One of Morocco's other key investments is the Dakhla Port — the cornerstone of a plan to connect sub-Saharan countries with the Atlantic Ocean, known as the Atlantic Initiative.

It was launched by King Mohammed VI and received positive responses from Mali, Niger, Burkina Faso, and Chad when their foreign ministers met in Marrakech with the leaders of the kingdom in late 2023.

The competition with Algeria is on display here, too. Along with its ally Mauritania — which is a key link between north and west Africa — Algeria leads an opposing project to control trade in the Sahel region, offering access to the sea via the port of Nouakchott. This coincided with the preparation to establish a free trade zone between the two countries.

These allies dealt two simultaneous and severe blows to Moroccan maritime trade, which is supported by more modern infrastructure.

Alongside Algeria's ban outlined in Telegram 29, Mauritania raised customs duties on goods arriving from Morocco. That took the tax rate to 171%, effectively amounting to a ban on trucks from Morocco entering Mauritania at the Guerguerat border crossing when it took effect in early January.

The developments underscore the strategic battle over economic routes around the Sahel between the countries in a region with a common security interest. It comes as Western countries, Russia and China, also compete for influence in a region where national economies vary in size, between €9.2bn and €18.4bn.

There is a market of about 250 million people in the Sahel. Louis Martinez, a researcher in Maghreb affairs, told the French newspaper La Croix that the competition for influence there between Morocco and Algeria comes in the vacuum created by the withdrawal of France and European countries as former colonial powers.

Martinez pointed out that Morocco represents the gateway to the sea for Sahel countries, providing the kingdom with commercial benefits as well as political benefits, which can be just as important.

Sahel countries want access to the Atlantic Ocean through Western Sahara, considering it an attractive alternative to the Gulf of Guinea route, plagued by insecurity and piracy.

West African countries also represent a promising market for Algeria, which has achieved notable success in diversifying its non-oil exports through targeted policies aimed at easing its oil dependency.

This success is attributed to a series of decisions, including lifting customs restrictions, increasing maritime and air routes to African countries, and opening branches for the country's banks abroad for the first time in its history, starting in Senegal and Mauritania.

Figures show Algeria achieved an annual increase of 30% in non-oil exports since 2019, jumping from $7bn in 2022 to $13bn in 2023. Algeria aims to surpass the $15bn threshold by 2025.

On its part, Morocco has strengthened its presence in the region through banking, mining, and services sectors as well as via logistics as it seeks to become a regional business hub. Moroccan exports to Africa rose from $4.5bn in 2021 to $6bn in 2022. The figure was $300mn in 2000.

Morocco's Minister of Economy has attributed the growth in trade between Morocco and African countries to the network of Moroccan banks spread across the continent. He also said the Dakhla Port would be the largest gateway to the African market.

Maritime modernisation

Morocco is anticipating more competition in the medium and long term as Algeria pushes through major projects to modernise its out-of-date port infrastructure. This could pose a threat to Rabat's current superiority in maritime logistics.

Algeria has some catching up to do. Maritime transport has been one of the challenges hindering its economic growth for decades. This issue has evolved into a critical national security concern.

Algeria has not developed the maritime facilities it inherited from the colonial era. Its oldest port is in the capital and was built in 1860.

The country is determined to accelerate construction and development to narrow the vast infrastructure gap with its rival and end its near-complete dependence on foreign shipping companies.

Ending dependency

Telegram 29 seeks to end Algeria's dependence on Tangier-Med, looking to alternative ports in Spain, Portugal, and Marseille as alternatives.

Algeria exports its gas through three specialised ports: Arzew, Skikda, and Bejaia. However, the country's remaining ports can barely meet the minimum service requirements within their deadlines, such as unloading cargo ready for shipping or discharging.

According to former Algerian Transport Minister Lazhar Hani, Algeria lost over $1bn in 2019 due to delays in unloading containers at ports and increased leasing costs.

These factors – combined with the depletion of foreign currency reserves during the oil price collapse – prompted Algeria to take action in 2022.

It drew up a plan for the development of maritime and air freight transport and a review the mechanisms for managing the 55 ports along its 1,650-kilometre coastline, including seven commercial ports dedicated to goods and three for transporting oil products.

Algeria has set 2030 as the date to begin competing to position itself among the top 30 ports in the world. This coincides with the completion of the construction of the Port of El Hamdania in Cherchell, west of the capital, with aspirations to transform it into a naval base that enables Algeria to control trade in Africa.

The port, which covers an area of more than 3 square kilometres and includes 23 docks, can handle 6.5 million containers annually, accommodating 25 million tonnes.

Once completed the Port of El Hamdania is expected to revolutionise Algerian maritime transportation, sparking competition between the two neighbouring countries for maritime dominance and control of shipping amid expectations of a race to allocate investments directed towards ports.

Morocco's plans

Earlier this year, Morocco announced a new expansion project for the Tangier-Med Port and allocated $714mn in funding.

Morocco has also prioritised further development of its port and logistics infrastructure. The country has 14 ports open for international trade, facilitating 96% of export and import operations for the kingdom.

Investments have been directed towards both the Nador West Med Port and the Dakhla Atlantic Port with international standards as part of its objectives to establish a commercial maritime fleet.

Tangier-Med has become a source of pride and a vital economic artery for Morocco. It dominates the Strait of Gibraltar, which separates the continents of Africa and Europe and connects the Mediterranean Sea with the Atlantic Ocean. It is well-positioned as a link between northern and south, connecting more than 180 ports worldwide.

The crisis in the Red Sea has been beneficial for Tangier-Med.

Christophe Castaner, the head of the Marseille Port, told Reuters in January that one possible scenario if the disruption continues, is for ships to head towards Morocco en route to the Cape of Good Hope. Other ships may also turn to Morocco to transport goods and commodities across the Mediterranean.

Rock-bottom relations

After Telegram 29, the value of trade between Morocco and Algeria plummeted. Relations between the two countries are at their worst since Algeria announced in August 2021 that it would "permanently" cut diplomatic ties with Morocco.

Natural gas is Morocco's main import from Algeria. Rabat used to get a portion in return for the passage of the gas pipeline to Europe through its territory.

However, in October 2021, Algeria decided it would not renew the contract, prompting Rabat to exploit the part of the pipeline on its territory to obtain liquefied natural gas from the global market through Spain.

The ongoing tension has ended the prospects for "economic integration in the Arab Maghreb." According to the International Monetary Fund, this region is the least integrated in the world.

The Moroccan-Algerian animosity has deep roots.

There have been over 50 years of tensions since the Sand War between the countries in October 1963. This was followed by the conflict over the Western Sahara issue. The animosity only grew after Morocco normalised ties with Israel.

Telegram 29 shows how trade on the high seas has become the latest area for this deep rivalry.