The International Monetary Fund (IMF) has approved the release of $415 million for Morocco, following the successful completion of the second review of its resilience-focused aid program. This disbursement brings the total funds allocated to Morocco under the IMF’s Resilience and Sustainability Facility (RSF) to $743 million, out of a planned $1.3 billion. The RSF provides extended-term loans with deferred repayment, designed to support climate adaptation and transition initiatives in beneficiary countries.
Funding Morocco’s climate resilience and sustainability goals
The RSF aims to help countries invest in sustainable development, particularly in adapting to climate change. Morocco has made significant strides in building climate resilience, with a stable economic foundation and a track record of effective policy implementation, according to Kenji Okamura, IMF Deputy Managing Director. Despite the nation’s ongoing drought impacting its agriculture sector, growth in other industries and domestic demand has helped mitigate some of the economic pressures.
Key areas for Morocco’s green transition
While the IMF acknowledged Morocco’s progress, it stressed the importance of timely implementation of upcoming program measures to support the country’s green transition. Key recommendations from the IMF include:
- Energy sector liberalization – Creating a more competitive energy market to boost efficiency.
- Green taxation – Introducing taxes to incentivize environmentally friendly practices.
- Water resource management – Developing policies to safeguard Morocco’s increasingly scarce water reserves.
Economic outlook and financial stability
The IMF forecasts a 2.6% economic growth rate for Morocco in 2024, down from the previous year due to agricultural challenges. Inflation, which surged above 8% in late 2022, is expected to settle at around 2.1% by the year’s end, aligning closely with the Bank of Morocco’s target. The country’s fiscal deficit is anticipated to remain steady at 4.3% of GDP, while the debt-to-GDP ratio is projected to stay above 69%—one of the highest in Africa.
