Jean R. AbiNader
March 17, 2020
After the displeasure of the people of northern Morocco was clear in the Hirak demonstrations, King Mohammed VI sacked a number of officials and directed the government to move ahead with long promised development projects in the region. Recently, a number of partnership agreements were signed between the central government authorities and local governments to renovate and develop the cities of Tangier, Chefchaouen, Ouazzane, Ksar El Kebir, and Larache at a cost of some $207 million. Eight ministries signed the convention, including the Ministry of Economy and Finance, the Ministry of Culture, and the Ministry of Tourism. The projects run from 2020-2024.
The initiatives aim to preserve the cultural value of Medinas (old cities), enhance tourism potential, as well as develop the urban areas, according to an article in Morocco World News. The redevelopment of the five cities will include the refurbishment of traditional hotels, restaurants, and the reconstruction of ruins; and involve civil society, local architects, and businesses.
A similar effort has been launched in Fez, A UNESCO World Heritage site, to enhance economic activities, improve living conditions in the medina, and safeguard traditional trades with a budget of $70 million focused on numerous sites in the city. These projects target the restoration and rehabilitation of 1,197 buildings and sites that are part of the historic heritage of the medina, upgrading urban spaces, and improving tourist access to various venues. Efforts include improving facilities for traditional handicrafts and providing support for recruitment and training in traditional crafts.
On the political front, the National Rally of Independents (RNI) political party, a member of the governing coalition, headed by Minister of Agriculture and Fisheries Aziz Akhannouch, has called on all parties to quickly begin discussions on electoral laws and political reforms in advance of upcoming 2021 elections. At the meeting of the party’s leadership, the discussion also focused on the latest developments for the agricultural sector. Unfortunately, the international agricultural festival held each spring has been canceled due to concerns around the coronavirus. However, the country has recently launched a new plan to promote the sector with an emphasis on raising the standard of living of people engaged in agricultural by providing incentives and subsidized loans for improvements and expansion.
The meeting also issued a statement of support for the efforts of Moulay Hafid El-Alamy, the Minister of Industry, Trade, and Green and Digital Economy, who is renegotiating the Free Trade Agreement with Turkey and reviewing others as well to protect Morocco’s interests and competitiveness of its industries.
The banking sector is coming under greater scrutiny by the national authorities since the king asked it to act more proactively in supporting the country’s development through better credit facilities for small business and entrepreneurs. This has led the parliament to devise a review of key sectors in the economy to determine if they are profiting unfairly by their treatment of consumers and clients. Its finance and economic development committee is scheduling meetings with the governor of the central bank, the finance ministers, and industry representatives in April, including the state-owned pension fund manager.
It is generally agreed by multinational agencies and rating firms that Morocco needs to adopt new banking reforms if it is to transform its national economy and better support a diversified and proactive development strategy. For example, the weak agricultural results due to a lack of sufficient water have an outsized impact on the country’s GDP because of the number of people employed in the sector. Scarce rainfalls again and the coronavirus are raising concerns over yet another year of slow growth.
In addition to the king’s admonition, the banking sector has drawn fire because of the prevalence of high profitability with declining credit approvals and lower deposits, rising non-performing loans, and worsening macro-economic conditions. Lawmakers are urging firms to set aside more money for “social and solidarity” projects, and better integrate the self-employed and the informal sector into the economy to “ensure social justice and a balanced distribution of wealth,” according to a preliminary committee report.
Questions will focus on lending margins relative to the central bank’s benchmark rate; fees and commissions; the banks’ contribution to job creation; their commitment to fair competition; as well as their social and corporate responsibility programs. In regards to the pension funds manager, CDG, an investigation by Morocco’s audit court found shortcomings with the state-owned pension fund manager’s investment policy and risk-management processes.