Covid-19: Morocco Reacted Quickly at Health and Financial Levels
The Moroccan state reacted “quickly”, both at the health and financial levels to the outbreak of the Covid-19 pandemic, according to a new report from the Institut Montaigne, a French think tank for reflection, proposals and experiments on public policies in France and in Europe.
The Kingdom “has managed, despite strict confinement, to support companies with systems similar to those of rich countries”, noted the report entitled “The stability of the Maghreb, a pressing need for Europe”.
At the end of the first wave of the epidemic, Morocco quickly mobilized a “large number” of tools to support the economy and endeavored to support the purchasing power of the most vulnerable, noted the document, which recalled the various measures put in place by the Moroccan authorities to face the health crisis linked to Covid-19 and its social and economic impact.
After the first wave, the Kingdom “showed its ability to quickly mobilize a large number of financing tools, while prioritizing support for vulnerable populations and the management of health emergencies”, noted the report, which analyzes the political, economic and social situation in three Maghreb countries (Morocco-Tunisia-Algeria) and the relations between these countries and Europe amid the health crisis and its impact on the economies of the countries of North Africa.
Despite a high debt, Morocco has been able to mobilize “significant” internal resources to support its economy and has been recently able to finance itself through the money markets without difficulty, noted the author of the report, adding that the Kingdom must finance a major medium-term development plan for which a high-level commission was set up shortly before the onset of the health crisis, alluding to the New Development Model.
According to optimistic scenarios, the financing needs by Morocco would be between 3.5 and 6.5 billion dollars, while they are between 6 and 11 billion euros according to pessimistic scenarios, if it does not get help from international donors, it pointed out.
Nevertheless, as Morocco enjoys an “excellent” relationship with international donors, based on the political stability and institutional capacity to implement large-scale infrastructure projects, “it is likely that donors will contribute significantly to a considerable acceleration of the country’s investment effort, the report said.
Unlike neighboring countries, “Morocco’s political stability has enabled it to refinance its debt in the markets and to contain inflation,” noted the author of the report.
It also underlined the performance of the Moroccan economy, describing the Kingdom as a growth model that has been able to attract foreign capital and build a financial system which is “more robust than its neighbors”, making it possible to finance public investments and current account deficits.
The “Tangier Med” project and the investments of European automotive and aeronautical companies (Renault, Airbus) are symbols of this attractiveness, underlined the Paris-based French think tank.
It stressed that the central bank (Bank Al-Maghrib) has a “good capacity to control inflation”, given that the consumer price index has never exceeded 2%, making it possible to stabilize the exchange rate and gain the confidence of foreign investors.
