Finances News Hebdo: After the lockdown, Morocco faced the challenge of economic recovery. But the drought and an unfavorable international economic situation have weakened the recovery effort. What is your analysis?
Mohamed Amrani: Indeed, Morocco expected sustained growth during the two years post Covid, or even the third year. But major constraints such as those you mentioned, in this case the drought and the war in Ukraine, seriously disrupted the recovery, especially since several activities have not fully resumed their normal level. There are also perverse effects on macroeconomic balances. The public deficit has increased as well as inflation. The level of unemployment is still at a worrying level. The rise in the cost of living has sparked social discontent and widened inequalities and poverty. For the moment, the government is activating support and support measures for the most impacted sectors such as transport. Could public finances support such burdens over a long period? The Minister of Economy and Finance was clear on this subject. She affirmed that the State does not have enough leeway.
Arbitrations will have to be made to get out of it with the least collateral effects. The most important thing is not to sacrifice public investment, which is a real engine of growth and a simulator for many companies. It is also a question of not increasing the indebtedness. Pn the past, such a scenario had negative long-term repercussions and dysfunctions that were difficult to overcome. However, it is clear that the national economy has benefited from certain advantages. Several sectors were able to reach their cruising speeds faster than expected, in particular the world trades of Morocco, phosphates, construction. The situation might have been better if agriculture and tourism, two key sectors of the national economy, were operating at a normal pace.
FNH: Don’t you think that in times of crisis we have to launch reforms, strategic programs and structuring projects?
M. A. : The crisis can serve as a catalyst for reforms and policy changes. Historically, and all over the world, all crises have been followed by new, more innovative and sometimes bolder directions. The crisis of 1929 upset economic thought and gave impetus to a new doctrine. In Morocco, the pandemic has accelerated many projects which, in the past, dragged on the agendas of the various governments. I can cite that of health insurance which is on track. The system for distributing direct aid to the poor population has fallen far behind. It will make it possible to somewhat reduce social inequalities and will be an effective tool in the fight once morest school dropout, because the aid granted must be linked to the pursuit of studies and the respect of certain elements to promote human development. We must focus on the rural world and disadvantaged regions where social deficits are very significant.
FNH: What regarding the new development model?
M. A. : The government program includes the implementation of the New Development Plan (NMD). Several ministers of this cabinet sat on Chakib Benmoussa’s commission to draw it up. They know perfectly the files and the sites on which they have to work. The commission works on the basis of the achievements that the country has accumulated during the 23 years of the new reign, such as major institutional or sectoral reforms. The State should deploy the means necessary for the realization of the strategic axes in order to guarantee to the citizens the full and equal exercise of their fundamental economic, social, cultural and environmental rights, in the same way as their civil and political rights. It is also a question of guaranteeing a supply of quality health care covering the entire territory and benefiting all citizens. It is also a question of securing their rights to justice that is honest, reliable and protective of the dignity, freedoms and fundamental rights of litigants. The NMD advocates ensuring the right of citizens to an extensive, safe and quality public transport service, guaranteeing access to decent housing and a dignified living environment and building access to culture and sports in priority causes, by investing in infrastructure, equipment and developing talent.
FNH: Are the projections set by national and international institutions realistic and achievable?
M. A. : We are going through a very difficult situation marked by a lot of uncertainty.titudes. Indeed, all the Moroccan organizations concerned by the forecasts, in particular the Ministry of Finance, Bank Al-Maghrib and the High Commission for Planning (HCP) have been repeatedly forced to revise their assumptions, most often downwards. This is also the case for international institutions such as the World Bank and the IMF. This constant revision of the projections makes it necessary to cross-check the models used in such circumstances with other determining elements in order to be able to arrive at figures close to reality. Since the outbreak of the health crisis which resulted in an economic crisis in a vague international environment, we have observed that the forecasts have become very fluctuating due to a lack of visibility.
FNH: What regarding inflation?
M. A. : If we refer to official figures, inflation in Morocco is around 5%. It is significantly lower than what exists in other countries. The world average is around 9%. It is twice as high as last year. It stands at 7.8% in the United States and 7.2% in the Euro zone, which are our major partners. The upward trend in inflation started just following the pandemic and it was accentuated with the war in Ukraine. It should continue as long as geostrategic tensions are maintained in a region renowned as the main producer of oil and food products. This conflict has inflicted a major shock on commodity markets, disrupting global patterns of trade, production and consumption from a way that should keep prices at high levels in the coming months and even next year. According to global commodity market data, wheat and oil are both regarding 65% more expensive now than they were a year ago. The prices of other cereals are also on the rise. For importing countries, these price increases constitute a significant obstacle to economic growth and livelihoods, and can cause social and political tensions. A net importer of hydrocarbons and food products, especially cereals, Morocco has been directly impacted. Inflation is fueled by these exogenous factors.
FNH: What room for maneuver does Morocco have to absorb the shock?
M. A. : The most important thing is to ensure a strategic stock with sufficient quantities to meet demand. Whether for petroleum products or cereals, it is necessary to strengthen reserves, diversify its suppliers and negotiate contracts well to deal with the various hazards. For oil, a Samir solution must be found. Our country needs a national refiner. Hydrocarbons are purchased at a high price on the international market. If the Samir was operational, our country might have saved the cost of refining, which is estimated at between 10 and 20% of the price of fuel, not to mention the assets in foreign currency, the jobs created and the knock-on effects generated on several activities. The Samir also had an important role in terms of storage and price stabilization.
