Morocco braces for austerity measures in wake of Covid-19
Morocco expects a spike in spending to counter coronavirus and mitigate its social and economic impact combined with a drop in tax and customs revenues as demand falters and exports drop along with tourism revenue and remittances by Moroccans abroad.
Morocco is planning this year an international bond, which, the central bank governor has previously said, would stand at 1 billion dollars or euros but a draft decree to be approved soon shows that the government plans to raise the foreign debt threshold to cover the budget deficit.
The draft decree was submitted to the secretariat general of the government to remove the cap of 31 billion dirhams of foreign debt set in the appropriation bill.
The decree also suspends commitment, under the appropriation bill, to public enterprises and special treasury accounts except concerning the health department, security and social services.
Earlier, the government ordered the first measure to rationalize spending by putting off promotions of employees and hiring new staff in the public administration except in health and security areas.
Morocco has imposed a nationwide quarantine and banned travel between cities. Only critical businesses such as shops and supermarkets selling foodstuff, pharmacies and banks and other essential businesses were allowed to operate.
Morocco has set up a special national response committee to the coronavirus as well as an economic committee to meet the challenges relating to the pandemic.
The King ordered the creation of a special fund to offset the economic and social impact of the virus and upgrade health service. So far, generous donations from the Moroccan public and private sector flowed to the fund, which garnered more than $3 billion, only few days after it was created on March 15.