In front of the deputies, the treasurer of the Kingdom defended the provisions of the new budget, recalling the 15 billion mobilized by the State for the recovery effort in 2020, 21 billion in subsidies to citizens in precarious situations, as well as 46 billion in business support.
The Minister of the Economy has clarified the financing strategy of the recovery plan within the framework of the 2021 finance bill. Indeed, the government provides 230 billion for public investment, including 45 billion intended for the Mohammed VI fund for investment and 185 billion intended for operating expenses, as well as the budget of public establishments and local authorities.
Following multiple criticisms of the delay in the execution of public investments, the Minister of the Economy recalled that the execution rate reached 78% at the end of 2019. Until September 2020, the rate of execution reached 78% at the end of 2019. State budget execution did not exceed 54% with 49% for public enterprises.
Guarantee mechanism: what about microcredit associations?
To support business recovery, the government has entered into a partnership with the banking sector to help businesses in difficulty as part of the pact for economic recovery and employment. However, banks are not the only ones affected by this effort, said Mohammed Benchaâboun. The Minister recalled that the microcredit associations are also concerned, recalling that they have contributed to financing 70% of the credits granted within the framework of “Damane Express”, dedicated to Very small businesses and self-employed people.
Attachment to the middle class
Beyond the controversy generated by the imposition of the solidarity contribution, considered unfair to the middle class, Mohammed Benchaâboun affirmed that the State is working to consolidate the achievements of this category which constitutes the backbone of the national economy, recalling that the average salary in the public service has increased by 44% in recent years, from 5,600 to 8,000 dirhams. The wage bill constitutes 70% of state expenditure, he continued.
To remedy the problem of growing deficits, the Executive intends to rationalize the functioning of public establishments and administrations. Thus, the ordinary operating expenses of the administration were reduced by 3 billion dirhams between 2019 and 2021, according to the minister’s figures.
EPP: towards public limited companies
Public establishments and enterprises (EEP) will now be transformed into public limited companies, knowing that those which no longer have reason to exist will be liquidated. The minister reassured, however, that this does not in any way mean their privatization.
This project will be reinforced by a law simplifying and digitizing administrative procedures, with a view to reducing the extent of the bureaucracy that is eating away at the public sector, according to Mr. Benchaâboun’s details.
The beginnings of a recovery of the national economy?
Mohammed Benchaâboun reported an improvement in the economic situation, following the appearance of some signs of recovery in some sectors, such as exports. “At the national level, some sectoral activities have shown signs of remission, as evidenced by the positive trend of exports, which improved in August by 6.8% compared to the same period last year, benefiting from the ‘relative improvement in external demand for Morocco,’ he told the committee members.
The same is true for the construction sector which is starting to regain its dynamism, as evidenced by cement sales, which increased by 18.6%, said the kingdom’s treasurer.
In addition, all the measures and actions, which have been taken since March, have made it possible to support household demand through the Special Fund for the management of the coronavirus (Covid-19) of approximately 0.9 point, and to stimulate investment by 0.6 points as part of the stimulus plan, thus mitigating the contraction of the national economy by about 1.5 points of growth, he stressed.