Rabat The Moroccan Minister of Economy and Finance, Nadia Fattah Al-Alawi, presented the draft finance law for the year 2025 in a general session held by Parliament in both chambers last Saturday, while the Finance and Economic Development Committee in the House of Representatives is expected to begin the general discussion of the draft today, Friday.
According to the project, the 2025 budget increased by about 13.01% compared to last year, exceeding 721 billion dirhams ($73 billion) compared to 638 billion dirhams ($64 billion) in 2024.
It is distributed between 494.6 billion dirhams ($50 billion) for the general budget, 2.01 billion dirhams ($200 million) for independently run state facilities, 162 billion dirhams ($16 billion) for private accounts, and 62 billion dirhams ($6 billion) for debt amortization. The medium and long term, according to what was stated in the project’s introductory note.
The government says that it aims to achieve economic growth estimated at 4.6%, and it has based this expectation on the assumption that the inflation rate will stabilize at 2%, that the agricultural yield will be around 70 million quintals, and the price of butane (cooking gas) will reach $500 per ton.
The total regular resources of the general budget for the year 2025 amount to 369 billion dirhams ($37 billion), compared to 311 billion dirhams ($31 billion) for the year 2024. The source of these resources is generally from direct and indirect taxes and customs duties, and they represent 77% of the budget’s resources, in addition. To the revenues of state property and the proceeds of transferring state contributions and others.
Supporting purchasing power, investment and employment
In the draft budget, the government emphasizes supporting the purchasing power of citizens during the year 2025 by continuing to support basic materials, as it allocated 16.53 million dollars ($1.7 billion) in order to maintain the stability of the prices of butane gas, sugar, and soft wheat, and allocating 26.5 billion dirhams ($2.7 billion). One billion dollars) for direct support directed to poor and vulnerable groups.
In order to maintain adequate supply of agricultural materials to the national markets at subsidized prices and protect the livestock stock, the project put in place a number of measures, including exemption from the import value-added tax and stopping the fees applied to the import of cattle, sheep, goats, camels, some red meat and olive oil.
The government is moving to strengthen public investment efforts to reach 340 billion dirhams ($34 billion), and according to what was stated in the project, this investment will focus on projects related to green hydrogen and the shift towards clean energies and tourism. It will also give special importance to the implementation of huge projects related to the Kingdom’s preparations to host the World Cup. 2030, especially those related to sports, rail, air, road and digital infrastructure.
The employment sector is one of the largest sectors in the Kingdom, especially with the record numbers reached by unemployment rates, which approached 14%, and the number of unemployed people at the national level reached one million and 633 thousand people.
To deal with this reality, the government revealed in its project that it has allocated more than 14 billion dirhams ($1.4 billion) to support employment by allocating an additional 12 billion dirhams ($1.2 billion) to stimulate investments that have an impact on job creation, and allocating one billion dirhams ($100 million). Dollars) to preserve job opportunities in the rural world, which was greatly affected by successive years of drought, and then allocate one billion dirhams ($100 million) to improve the effectiveness of employment promotion programs with the aim of reaching 217,000 beneficiaries in 2025.
Positive signs and caution
Economist and university professor Badr Zahir Al-Azraq believes that the government set the growth rate at 4.6% based on assumptions based on positive indicators, especially those related to the return of external demand for Moroccan products and services, the recovery of a number of sectors, most notably the automobile industry, and the good and unprecedented performance of the tourism sector, phosphates and industries. extractivism.
However, the speaker believes that the state of uncertainty still frames the draft 2025 budget, as was the case in 2024.
He explained in an interview with Al Jazeera Net that despite some positive indicators, the government is dealing with great caution with the international market given the presence of two major conflicts in the world: the first between Russia and Ukraine and the second in the Middle East region, indicating that the development of these two conflicts could lead to disruption of the chains of exchange. Distribution again, and the burden of this matter will fall directly on the Moroccan economy, which is linked to import and export.
On the other hand, the speaker points to a number of challenges facing the Moroccan economy, which are mainly related to the completion of major projects such as social protection, reform of the health and education systems, and the reconstruction of the Al Haouz region.
He added that these major projects require the mobilization of large financial resources at the state budget level in order to strengthen the infrastructure and complete reforms in these sectors, and at the same time there are new commitments for the Kingdom in terms of organizing the African Cup in 2025 and the World Cup in 2030, which require the mobilization of financial resources. Significant at the state budget level.
Major projects and challenges
In the view of Ali Al-Ghanbouri, head of the Center for Economic and Social Foresight, the government’s increase in the investment budget in the 2025 draft budget reflects its commitment to implementing major projects aimed at transforming Morocco into an emerging country by the year 2035.
In this regard, he refers to the huge investments in renewable energy projects to solve the energy problem, whose bill consumes more than 13 billion dollars annually, equivalent to half of the trade deficit.
The project also pays great attention to the problem of water scarcity, by allocating a budget exceeding 18 billion dirhams to accelerate the completion of strategic projects that include building new dams and seawater desalination plants.
At the social level, the project focuses on supporting purchasing power and direct support for vulnerable groups, as well as on employment programs and raising the budgets of vital sectors such as education and health by more than 11 billion dirhams ($1.1 billion) and 32.6 billion dirhams ($3.3 billion), respectively.
The speaker concludes that the draft budget carries an ambitious vision to achieve economic and social development through large investments in vital sectors and strategic projects, but as he said in a statement to Al Jazeera Net, it is not devoid of fundamental challenges.
One of the most prominent challenges that Al-Ghanbouri monitors is related to financing major projects and ensuring their financial sustainability, especially in light of the high levels of debt that exceeded 69% of the gross domestic product.
He believes that this high percentage puts pressure on the government, and makes it necessary to search for more balanced financing solutions that take into account preserving the independence of Moroccan economic decisions, avoiding excessive debt, and dealing with external and internal challenges that may affect the implementation of these ambitious plans. It is likely that the government will turn Towards strengthening partnerships between the public and private sectors, and implementing reforms aimed at improving tax collection and increasing the efficiency of public spending.
New resources
Badr Zaher Al-Azraq points out that the government has been trying for years to carry out tax reforms in order to confront the rising expenditures, and he believes that it has somewhat succeeded in mobilizing them through tax resources that have witnessed a significant increase. However, he points out that the volume of investments and expenditures in the coming year requires research on… Other resources, which may push the government to borrow again and to use so-called innovative financing in order to secure the basic needs of public investment in Morocco, in addition to betting on foreign investments and making foreign investors partners in implementing these major projects in the Kingdom.
Although he stressed that the government deals with various external and internal indicators with caution, taking into account the challenges associated with the rise in social and investment expenditures, it is likely, based on the indicators announced by the government, that it has been able to secure the minimum levels of stability and that it has a forward-looking view regarding mobilizing additional resources to finance all projects. And the major reforms it instituted.
