Morocco: King receives new head of the Hassan II Fund for Economic & Social Development

King Mohammed VI received this Monday, at the Royal Palace in Rabat, Dounia Ben Abbas Tâarji, who was appointed last week President of the Executive Board of the Hassan II Fund for Economic and Social Development.

Although the official news agency MAP, which reported the news, did not give any details about the content of talks, the Sovereign has undoubtedly given his instructions to the new chief of the fund to upgrade the action of this state investment institution whose resources are expected to be heavily bailed out this year.

The Hassan II fund was created by King Mohammed VI in 2000 to support investment in infrastructure and structuring projects and to provide financial assistance for economic and social development projects, in line with the priorities of the new development model, spearheaded by the King.

The Hassan II Fund served as a catalyst for the development model of the 2000s: a model based on public investment as the main engine of growth.

The idea behind the genesis of the Fund was simple: privatization money should not be swallowed up by the running costs of the general state budget. It had to be used to support the investment effort of the state and create a ripple effect throughout the economy.

This gave a political legitimacy to the act of privatizing and provided colossal means to the ambitions of the monarch.

Tanger Med, motorways, Plan Azur stations, industrial zones, Renault Tangiers, new football stadiums, development of the Bouregreg valley, rescue and development of RAM, railway network, LGV Tangier-Casa … The Hassan II Fund has been part of all major projects initiated since 2000.

But its resources dried up after the shutdown of the privatization program that included the privatization of Maroc Telecom, la Régie des Tabacs, public sugar mills and a dozen other state-owned companies.

Following the curtailment of privatization receipts, the Fund continued to receive state contributions. But these did not exceed 2 billion dirhams a year and were drawn from the general budget.

The situation is however expected to change this year with the projected injection of 20 billion MAD between 2019 and 2024.

The 2019 appropriation bill earmarks 5 billion MAD for the Hassan II Fund as announced by the Minister of Finance during the presentation of the bill.

According to leboursier.ma website, this amount corresponds to half of the anticipated privatization receipts programmed in 2019 (10 billion MAD).

This bailout will be carried on for at least five years.

In a letter sent November 30, 2018 by the treasurer of the kingdom and the Wali of Bank Al Maghrib to the IMF Managing Director Christine Lagarde, Moroccan officials committed to a privatization program equivalent to 4% of GDP over the period 2019-2024, the website recalled. It explained that 4% of GDP amounts to 40 billion dirhams. Half of this money will go to bail the assets of the Hassan II Fund.

“The appointment of Dounia Taârji is not a simple change of face. But is already interpreted as a change of course, the sign of a new life for the Fund,” commented the website.

Also on Monday, King Mohammed VI received Obaid Amrane, new Director General of “Ithmar Capital” Fund, formerly dubbed Moroccan Fund for tourim development.

The fund is involved in strategic projects, such as the Morocco-Nigeria gas pipeline or the Wessal urban transformation projects, in Casablanca and Rabat.

Tourism contributes about 7% to Morocco’s GDP and is among the key drivers of employment in Morocco offering over 2.5 million direct and indirect jobs.