Algeria Reels Under its Own Boycott of Moroccan Ports

 

On January 10, the growing diplomatic row between Algeria and Morocco reached the shipping sector. Algeria’s Professional Association of Banks and Financial Institutions (ABEF) banned its members from processing transactions for goods transshipped through Moroccan ports, with immediate and severe consequences.

Unfortunately, the decision has plunged the Algerian economy into a crisis with shortages of critical imports, including meat and cereals. As consumer pressure mounts, ABEF has been forced to issue another directive, less than a month after the previous, with fresh instructions now to allow direct debit transactions for imports of goods, especially fresh produce and meat.

“ABEF has received a letter from the Ministry of Transport on the subject of goods imported through Moroccan Ports. Through this letter, you (ABEF members) are kindly asked to reinstate your services, and proceed with the domiciliation of all import operations of products, in particular those perishable and whose date of embarkation on board vessels is prior to 10 January 2024,” ABEF said in a letter dated January 29.

Goods bound for major Algerian ports have usually been transshipped through Morocco’s Tanger Med, which is a massive container hub for international trade. However, the ABEF ban led major shipping lines such as Maersk and CMA CGM to introduce changes in liner services in North African Ports. Both carriers replaced Tanger Med as the transshipment port serving Algerian Ports, instead opting for the ports of Algeciras and Valencia.

Some analysts warned that the Algerian decision would negatively affect its economy, since bypassing Moroccan ports would increase the cost of transportation and delivery time. This would eventually impact the prices of key commodities in the Algerian markets.

The disagreement has been brewing for a long time. Political and economic disputes between Algeria and Morocco intensified in 2021, when Algeria decided to cut its bilateral ties with Rabat.

Morocco accuses Algeria of hosting and financing the Polisario Front, the Sahrawi nationalist group which is seeking the independence of Western Sahara from Moroccan occupation.

The boycott comes after a banner year for Tanger Med. In 2023, the Tanger Med Port Complex processed over 8.6 million TEU worth of freight, representing an increase of 13 percent compared to 2022. This performance is equivalent to 95 percent of the port’s nominal capacity- a feat reached four years earlier than expected.

 Further, the port’s two car export terminals processed a total of 578,446 cars in 2023, an increase of 21 percent compared to 2022. Morocco is quickly becoming an auto-manufacturing hub, and the port complex handles vehicles made by the Renault factories in Melloussa and Casablanca and the Stellantis factory in Kenitra.