Moroccan Government Uncaps External Loans

Morocco’s government council decided to uncap the country’s external loans, currently limited at around $3.1 billion, as announced in the 2020 budget and approved by the parliament last December.

This could help Morocco better respond to the COVID-19 crisis and mitigate its impact on the most affected economic sectors, such as tourism and transportation.

The government also hopes this will help in managing the consequences of the scarcity of rains during the winter season which has negatively impacted agriculture in many areas in the country.

The Moroccan economy is facing a difficult situation due to the lack of currency inflow resulting from tourism, remittances, and foreign investment. In addition, many exports sectors were halted such as auto industry, textile and clothing industry, and agricultural products.

The cabinet issued a statement saying it authorized uncapping of external loans to ensure the influx of hard currency into the country, especially through international loans, given that many sectors were affected by recent developments, such as tourism, foreign direct investment, and exports.

Minister of Economy Mohamed Benchaaboun suggested a number of measures relating to the review of the 2020 budget in light of the emerging conditions of the coronavirus and drought.

Benchaaboun proposed redefining priorities at the level of future expenditures for the government and public institutions. He emphasized the need to accelerate contracting dues, especially those of very small, small, and medium enterprises to enable them to fulfill their financial obligations and maintain jobs.

The Minister hoped those measures would help alleviate the social repercussions of this crisis.

Benchaaboun pointed out that these reviews are imposed by the global and national economic context affected by the negative repercussions of the coronavirus pandemic.

The developments require urgent and fast measures to limit the effects of this pandemic, especially by directing public spending towards priorities at the health, social, and economic levels, according to the Minister.