The financial health of Morocco’s local governments continues to show positive momentum. According to the latest Monthly Bulletin of Local Finance Statistics, released by the General Treasury of the Kingdom, the execution of local government budgets resulted in a surplus of 3.2 billion dirhams by the end of February 2025—up from 2.2 billion dirhams recorded a year earlier.
This surplus includes a positive balance of 11 million dirhams from special accounts and annexed budgets, which will help cover planned expenditures for the year. More broadly, cumulative surpluses across all local governments now stand at 62.3 billion dirhams, factoring in leftover funds from previous years. These reserves are allocated to cover outstanding expenses, including salaries, public service operations, utility costs, and debt interest payments. Notably, municipalities account for 61.3% of the total surplus, reinforcing their central role in local budget management.
Local government revenue reached 5.731 billion dirhams by the end of February 2025, marking a significant 26.3% increase compared to the same period in 2024. This growth is largely driven by a 43.9% surge in state-transferred funds, which totaled 3.428 billion dirhams, alongside a 9.6% rise in revenues directly managed by local governments. However, revenues collected by the state on behalf of local governments saw a slight decline of 2.4%.
Taxation remains the primary source of local government revenue, accounting for 87.1% of total income. Local tax revenues soared by 28.3% year-over-year, reaching 4.992 billion dirhams. This increase is mainly due to a sharp 56.7% rise in direct taxes—particularly corporate and income taxes—as well as an 18.3% growth in indirect taxes. The value-added tax (VAT), which alone represents 49.1% of local government revenues, remains a key pillar of funding.
Meanwhile, revenues managed by the state on behalf of local governments fell by 2.4% to 457 million dirhams, driven by declines in local taxes such as the municipal service tax, professional tax, and housing tax.
On the expenditure side, local governments spent 2.346 billion dirhams by February 2025, reflecting a modest 1.7% increase compared to the previous year. This rise is primarily attributed to a 7% uptick in personnel expenses, adding 122 million dirhams to the payroll. Conversely, spending on goods and services dropped by 13.6%, reducing costs by 71 million dirhams, while interest payments on debt fell by 27.5%, translating to 11 million dirhams in savings.
