Mohamed Benchaí¢boun

Morocco’s financial and economic management of the crisis has been lauded by the international community. What have been the main challenges, and which achievements are you most proud of?

Under the informed leadership of His Majesty Mohammed VI, the country was able to mobilize its forces and take the necessary steps in timely manner in order to cope with the effects of the current health crisis. His Majesty introduced a special COVID-19 fund that gave people hope and stimulated an extraordinary mobilization. The response to the call for solidarity was much greater than expected, with over MAD34.6 billion (USD3.78 billion) donated, a record and an example that has drawn admiration from all over the world. The first measures were to distribute monetary aid, defer the payment of social security contributions, support access to state-guaranteed funding for companies, and pause the repayment of loans for both families and companies. The planning and execution of its vaccination drive also made Morocco a model, commanding both respect and admiration. Corporate defaults have been kept to a relatively moderate level, thanks to the many measures designed to reduce constraints on company cash flow and solvency. Faced with the magnitude of the health crisis, we implemented various short-term measures to ensure a quick economic recovery. Morocco opted for the implementation of an ambitious recovery plan allowing a rapid return to economic growth. With a budget of MAD120 billion (USD13.11 billion), or about 12% of GDP, the recovery plan includes the expansion of stimulus credit support and the scaling up of financial support for direct investment through the Mohammed VI Fund for Investment into priority areas, including industrial restructuring, innovation and growth-promoting activities, including the promotion of SMEs, infrastructure, agriculture, and tourism. An exhaustive reform of the public sector was also initiated to strengthen the strategic role of Public Establishments and Enterprises (EEP) in socio-economic development to help accelerate structural transformation. In order to tackle the economic and social difficulties, Morocco intends to progressively expand social coverage, while reforming existing aid programs and the compensation system. Finally, significant efforts have been made to improve the business and investment context, particularly through reforms aimed at simplifying administrative procedures, modernizing the legal framework for business, and strengthening economic governance.

What will be the impact of the New Development Model (NMD) on Morocco’s economy?

On May 25, 2021, under High Royal Instructions, a Special Commission for a New Development Model proposed a roadmap based on four strategic development pillars: the strengthening of economic resilience and the diversification of growth resources; the consolidation of human capital; equal access to inclusion opportunities; and the strengthening of the territories. The Ministry of Economy, Finance, and Administrative Reform will ensure the application of strategies and reforms aimed, on the one hand, at making Morocco one of the most dynamic and attractive economies in Africa, and, on the other, achieving an average annual economic growth of 6%. The success of NMD demands an adequate financing strategy. In this regard, the Ministry of Economy and Finance will play a pivotal role in the mobilization of financial resources, through the establishment of a more efficient fiscal policy, promoting, in addition to the preservation of the competitiveness of companies, the mobilization of additional resources, whose potential is estimated at between 2 and 3% of GDP.

What are the goals for the year?

The financial sector development strategy aims to establish a favorable framework for sustainably financing the economy. This objective is pursued through strengthening financial inclusion, consolidating financial stability, initiating a new dynamic in the development of the capital market and its infrastructure, and developing the insurance and social security sector. Regarding the banking sector, in the future, support and stimulus measures should continue, considering the evolving health situation and the recovery of economic growth. Priorities must be set for Moroccan banks. The objective is to identify ways to boost bank financing for the target populations, including the promotion of access to entrepreneurship bank loans for as many young, qualified project promoters as possible, and support for small and medium-sized businesses.