Finance Headlines Morocco

Morocco’s Upcoming Cabinet Inherits an Ambitious Social Agenda and a Tight Budget

Morocco is entering a decisive turning point by placing the welfare state at the heart of its priorities, according to the Paris-based Jeune Afrique Magazine.

Expectations now center on Fatima Ezzahra El Mansouri, national coordinator of the PAM, whom King Mohammed VI named head of government on 29 September. Her party puts the program’s extra cost at 350 billion dirhams. Flagship measures include a 3,000-dirham pension floor, free electricity for the poorest households, no income tax on gross salaries below 15,000 dirhams, and one million jobs.

Observers and senior officials praise the program as unusually clear and costed, Jeune Afrique reports, yet experts question its sustainability. A rise in the minimum wage, currently 3,422 dirhams, is among the most debated proposals, and some economists and employer representatives call it populist. Academic Hammad Kassal warns that shaking up the economy without tackling weak productivity would lead to an impasse.

Overhauling income tax is another vast undertaking. A three-bracket scale, a 20% top rate and a higher threshold would cost more than 30 billion dirhams a year in lost revenue. Larabi Jaïdi notes this exceeds half of income tax receipts in 2025, and that some of the previous year’s revenue relied on non-repeatable mechanisms such as voluntary regularisation.

Pensions pose similar difficulties. A 3,000-dirham floor and a doubled survivor’s pension would relieve hundreds of thousands of retirees but add billions in costs for social security funds already depleted. The CMR and the CNSS face chronic deficits and exhausted reserves within a decade.

The job target also meets lessons from the past. The previous cabinet set a similar goal in 2021, yet unemployment was still 13% at the end of 2025. Many analysts see the pledge as an electoral hook rather than a realistic target.

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