Morocco to reduce public debt below 70%- Finance Minister

Morocco’s government debt is sustainable as efforts are ongoing to cut it further below 70% of GDP, finance minister Nadia Fettah Alaoui said.

The minister made the remark during an interview on le360, following criticism by opposition MPs who warned of the risk of debt unsustainability.

Debt to GDP ratio was brought below 70% this year and the government “is committed to maintain this downward trend,” she said.

“The share of domestic debt in the treasury’s debt portfolio exceeds 75%. Secondly, the structure of the debt is essentially long-term and its average cost is around 3%. This debt is mainly (90%) backed by fixed rates,” the minister added.

The minister also highlighted the improvement of Morocco’s ranking by rating agencies, noting that Standard & Poor’s revised Morocco’s outlook from “Stable” to “Positive”.

Last month, minister in charge of the budget said Morocco would not use debt to fund the expansion of its safety net programs, such as the mandatory health coverage and financial aid to the needy.

The government would rather meet rising social spending through reforms that increas tax revenue and through fiscal consolidation, he said.

This fiscal consolidation earned Morocco improved ratings by S&P and Fitch ratings, while the IMF and World Bank praised in their recent reports the resilience of Morocco’s public finances.