RABAT (The Southern African Times) – Morocco plans to reform, merge or dissolve some state bodies to reduce their dependency on a state budget hit by the coronavirus pandemic, the finance minister said on Wednesday.
The plan could include a merger of the indebted state railway operator, ONCF, and the highway company ADM into a single entity, the minister, Mohamed Benchaaboun, told reporters.
Morocco expects its economy to shrink by 5% this year, with the fiscal deficit rising to 7.5% of gross domestic product and treasury debt to 75.3% of GDP. Despite a tough lockdown, it has confirmed 26,196 cases of the coronavirus.
The state has already announced some measures to help with the economic impact. Last week, King Mohammed VI announced a $12.8 billion stimulus, equivalent to about 11% of GDP
The stimulus includes 75 billion dirhams ($8 billion) in state-guaranteed loans to private and public enterprises and 45 billion dirhams as a strategic investment fund to finance public-private projects, Benchaaboun said.
State airline RAM will receive 6 billion dirhams, of which 60% is a direct capital injection and 40% loans guaranteed by the state.
Morocco’s plan to generalize social security in five years would guarantee health insurance, retirement pensions and unemployment compensation for everyone, he said.
More than a third of Moroccan workers already work in unregistered businesses without social protection, doing manual labour or selling in the streets, accounting for 14% of GDP, according to the planning agency.
Unemployment is expected to surge to 14.8% in 2020 from about 9.2% before the pandemic, the agency said.
Morocco intends to issue an international bond this year. “All preparations have been made,” he said ,without offering further details.