A proposal by the Rassemblement national des independants (RNI) to introduce a tax credit of up to 5,000 dirhams per year per child for private school fees has reignited a fundamental debate in Moroccan economic policy: when the state transfers money to consumers, does it strengthen their purchasing power or merely give producers the ability to raise their prices? The question goes well beyond education. It applies to every market where demand is strong, supply is constrained and price formation lacks transparency, comments medias24 in an analysis.
The mechanism at issue is known in economics as subsidy capture. In a weakly competitive or poorly regulated market where buyers have limited alternatives, a subsidy designed to reduce the cost of a service may instead increase consumers’ capacity to pay, prompting providers to adjust their prices accordingly. For private schools, where spaces are limited, switching costs are high and parents typically remain enrolled once a child is placed, the risk is structural: the listed fee may hold, but total costs can rise through auxiliary charges — registration, transport, meals, textbooks, uniforms and “compulsory” activities.
The media outlet also cited the housing aid program as offering a concrete illustration of the issue. The state introduced direct acquisition grants of 100,000 dirhams for homes priced at or below 300,000 dirhams, and 70,000 dirhams for those priced between 300,000 and 700,000 dirhams. Since its introduction, new housing prices have risen in several segments, absorbing a significant share of the benefit. A unit that might have been priced at 250,000 dirhams can be repositioned at 300,000 dirhams, capturing 50,000 dirhams of the subsidy. The same logic applies across the price band.
The livestock sector provides the most striking case. According to a confirmed source, quoted by medias24, the state disbursed 11.5 billion dirhams in direct support to livestock breeders between December 2025 and May 2026, at a rate of 500 dirhams per head. Despite this exceptional injection, meat prices continued to rise and reached historically elevated levels. A massive public expenditure produced no consumer price relief because the market remained characterized by structural dysfunction, opaque margins and complex distribution circuits.
The lesson Medias24 draws is that transfers and tax credits are fast to announce but limited in impact if not accompanied by genuine market policy: price transparency, competitive discipline and effective regulation. Without these guardrails, demand subsidies in markets with constrained supply and weak oversight risk becoming transfers to producers rather than to households. Public spending increases; consumer purchasing power does not.
