Local governments in Morocco are sitting on a record surplus of 10.2 billion dirhams, a figure that has nearly doubled compared to the previous year. While this financial cushion could be used to improve public services and infrastructure, much of it remains untouched, raising concerns about bureaucratic inertia and inefficient budget execution.
According to the latest data from the General Treasury of the Kingdom, this surplus is part of a broader trend. The cumulative excess funds of local governments now stand at 59.1 billion dirhams, including reserves from previous years. While these savings offer financial stability, they also expose a paradox. Despite having substantial funds at their disposal, local governments often struggle to implement investment projects efficiently.
One of the main reasons behind this surplus is a significant increase in revenue. Ordinary revenues grew by 14.8 percent, reaching 53.1 billion dirhams. This rise is largely due to an increase in state-transferred funds, a surge in revenues managed by the state, and a moderate rise in revenues directly handled by local governments. While this is a positive development, it also highlights a persistent reliance on state funding, calling into question the financial independence of local governments and their ability to generate their own income.
On the expenditure side, local governments have remained cautious. Ordinary expenses increased by only 4.5 percent, reaching 28 billion dirhams. Spending on goods and services rose by 6.5 percent, personnel costs grew by 1.9 percent, and interest payments on debt jumped by 8.1 percent. This controlled approach to spending raises an important question: do local governments have enough financial flexibility to improve public services, or are they simply stockpiling funds due to inefficiencies in budget execution?
A significant portion of the surplus, nearly 2.9 billion dirhams, comes from special accounts and annexed budgets. These funds are allocated for expenses that have been approved but not yet paid, meaning that much of the surplus is not immediately available for new investments but rather reflects delays in budget execution.
While a large surplus may seem like a sign of strong financial management, it also indicates a tendency toward cautious spending, or in some cases, an inability to implement planned projects on time. With increasing pressure on local infrastructure, particularly in areas such as transportation, sanitation, and urban development, there is an urgent need for more efficient use of these funds.
Communes alone hold more than 60 percent of the total surplus, reinforcing their dominant role in local financial management. However, this concentration of resources raises concerns about equity in fund distribution among different types of local governments.
Looking ahead to 2025, the main challenge for local governments will be to translate these financial surpluses into tangible improvements for citizens. While rising revenues are a positive trend, they should not overshadow the need for reforms in local taxation to enhance financial autonomy. The key to addressing this issue lies in faster project execution, better resource management, and more rigorous budget planning. Without these changes, the growing surplus risks becoming little more than a safety net, rather than a powerful tool for local development.
