The tourism-dependent kingdom of Morocco has been hit especially hard by the pandemic. But now it intends to launch a series of economic and social reforms to help its recovery, finance minister Mohammed Benchaaboun said at this week’s IMF meetings.
While all African sovereigns have struggled since the pandemic began, Morocco has formulated a comprehensive action plan for the country’s recovery.
With a low external debt-to-GDP ratio, Morocco appears well positioned to combat the worst impacts of the pandemic.
Morocco’s public debt as a percentage of GDP stands at 70.7%, while external debt is 53.4%. It drew down around $3bn made available by the IMF under the Precautionary and Liquidity Line in April. In September, Morocco became one of the few African countries to tap international debt markets since the crisis began, raising a €1bn bond with long five and 10 year tranches.
Social safety nets
“We need to strengthen social safety nets so that all Moroccans can have health insurance, a pension scheme and a family allowance,” Benchaaboun said on Wednesday. “Morocco has made that a priority and it will be launched in January 2021. In a sense, this is a challenge because we are talking about 22 million Moroccans that will join a mandatory health system between now and 2022.”
Similarly, Morocco has drawn up a comprehensive financial recovery plan. “We want to ensure an economic recovery plan is our priority,” Benchaaboun said. He said the plan had a budget worth 11% of GDP, of which 4% which will be provided through the Mohammed VI Investment Fund.
That strategic investment fund, which is expected to increase investment and revive the economy, is set to receive a cash injection of Drh15bn ($1.6bn) from the state budget.
“We want to act rapidly to inject necessary funds into the economy to stimulate investment using traditional methods of financing, including private equity, which will be a component of investment in infrastructure, especially through public-private partnerships,” Benchaaboun added.