Morocco to amend the budget law in bid to revive national economy

A $ 3.5 billion fund to manage the coronavirus pandemic was created by King Mohammed VI.
Monday 11/05/2020
A Moroccan vendor, wearing a protective mask, works at the central market  in the Moroccan capital Rabat. (AFP)
Adjusting to circumstances. A Moroccan vendor, wearing a protective mask, works at the central market in the Moroccan capital Rabat. (AFP)

RABAT--Morocco’s Ministry of Economy, Finance, and Administration Reform announced Monday that it is preparing a revision of a draft financial law as part of measures to tackle the coronavirus pandemic, which has adversely affected the economy.

Minister of Economy, Finance and Administrative Reform Mohamed Benchaaboun stressed that the government is working on updating key economic objectives after taking into account the impact of the crisis on the budget deficit, balance of payments and debt.

These steps came after the majority and opposition in parliament called on the government to prepare amendments to the financial law as part of a national strategy to contain the impact of COVID-19 on the national economy.

The ministry confirmed that a multi-action plan has been developed to revive the economy and is being prepared for various contingencies.

“Amending the financial law has become a necessity regardless of the options available,” said economist Hichem Atouch, who added that “it is possible to redirect and rationalise a set of programmed funds so as to avoid as much as possible excessive borrowing from outside.”

“Due to the projected effects of the coronavirus over the coming months, the government has to revise and abandon many procedures, obligations and provisions in the current finance law, and add new provisions aimed at giving urgent support to companies and actors affected by the spread of the virus,” added the same source.

Omar Blafrij, a member of the Finance and Economic Development Committee of the House of Representatives, emphasised that the government has to present an amended draft of the financial law to parliament in order to adjust the budget to the exceptional circumstances the country is facing.

He added that measures should principally take into account reviewing the funds that the government allocated to the education and health sectors in particular.

According to the fourth article of the Financial Law, provisions cannot be changed during the current year except through amending financial laws.

Last April, parliament approved a law allowing the government to borrow from abroad over the ceiling amount specified in the 2020 Finance Law (i.e. 31 billion dirhams, or $3.1 billion).

Atouch said the budget deficit, which reached some 33 billion dirhams (about $3 billion) in 2019, will deepen further.

Idriss al-Fina, professor at the National Institute of Statistics and Applied Economics, highlighted the decision to create a special fund to manage the coronavirus pandemic amounting to approximately 35 billion dirhams, ($3.5 billion), saying that it reduced the burden on the public budget.

This special fund, which was created by King Mohammed VI,  will allocate a monthly allowance of $200 between March 15 and June 30 for those who have been furloughed by their employers in the private sector.

The country’s Economic Vigilance Committee announced it will hear all economic actors and suggest necessary tools to enable small and medium-sized companies to overcome the crisis as part of its economic recovery plan.