Social aid to cost Moroccan government 8% of GDP by 2026- minister

Morocco’s spending on social assistance would amount to $9 billion, representing some 8% of the country’s GDP, minister in charge of the Budget Fouzi Lekjaa said.

Lekjaa was speaking before MPs explaining the logic behind cutting cooking gas prices, which come after a series of measures aiming to boost purchasing power of poor and middle-class households.

“Between 2015 and 2023, the state spent 111 billion dirhams (11 billion dollars) to subsidy butane gas, with the poor benefiting at a 14% rate,” he said, to show how little the poor benefited from the general subsidies system.

Funding social protection would be possible thanks to an expected rise of state revenue by 12%, he said.

Social aid benefits 6 million households, including 3.6 million families that receive direct cash handouts regularly, he said.

The government’s social effort together with an enlargement of the tax base would enable cutting the budget deficit from 7% in 2021 to 3% in 2026, he said.

Tax burden has shrunk from 21% to 23% as the government expands the tax base and VAT collection to increase revenue, he said.