Morocco’s long-promised plans for an economic restructuring began to take shape as authorities named a growth czar and announced initiatives to unload debt-laden state assets.
King Mohammed VI named Chakib Benmoussa, a former interior minister who’s now ambassador to France, to lead a committee charged with developing a new growth model for the North African nation’s stunted economy, the state-run MAP news agency reported late Tuesday.
The move came after the Finance Ministry earlier that day outlined a plan to slim down some state assets by devising a restructuring plan for enterprises including the flagship Royal Air Maroc carrier and railway monopoly ONCF.
Taken together, the efforts show the government finally fulfilling vows first made about two years ago to tackle growth and the revival of a $118 billion economy battered by a poor harvest and weak demands from its key European export market. Officials have already reduced their projections for 2019 economic growth to 2.7% from an earlier figure of 3%.
The International Monetary Fund said earlier in November that while the country’s overall economic policies are “sound,” the government must press ahead with fiscal consolidation to help lower public debt-to-gross domestic product ratio and secure “priority investments and social spending.”
The revival plans come at a pressing time, as eastern neighbors Algeria and Tunisia are either in the midst of upheaval or struggling to rebuild their own economies and Libya remains mired in conflict. Morocco has avoided much of that unrest, but the economy — heavily reliant on phosphates, agriculture and tourism — has been struggling to meet rising social needs.
Key to this fight is patching up deteriorating finances, a fight that authorities are addressing with currency reforms and the privatization of state enterprises, some of which have been criticized by the country’s audit court as inefficient and suffering from poor planning.
Under the plan outlined by the ministry in a report released Tuesday, the aim is to “ensure the sustainability of their business model.”
The overhaul of the companies, which also will include highways authority ADM, seeks to focus on their core activities by setting clear development strategies that can raise private-sector involvement, according to the ministry.
More state-owned firms will probably be slated for privatization, and “the institutional reform” of some of them should add more assets to the list, it said. A total of 400 state-owned companies and affiliates had debt of about 197 billion dirhams ($20.4 billion) in 2018, the ministry said.
The firms’ investments are set to slow in the coming year, rising just 2% in 2020 before decreasing about 1% in 2021 and a further 9% the year after, the ministry said.
Power and water utility ONEE is expected to make more deals with the private sector before the utility is broken up into three units, the ministry said, without giving a time-frame. It also said ONCF would split infrastructure development from running the network in 2022 as part of a move to encourage private sector investment.
©2019 Bloomberg L.P.