Morocco finds itself at a decisive turning point, as economic and social challenges accumulate, weakening the country’s stability. On the front line, corruption and economic instability weigh heavily on government action. A recent report from the Government Work Observatory and the Hayat Center paints a bleak picture of the situation, highlighting the impact of corruption on the national economy.
In Morocco, the annual cost of corruption exceeds 50 billion dirhams, a figure which alone underlines the scale of the economic and, by extension, social problem. But beyond the numbers, it is the profound repercussions on economic growth, public confidence and social services that are of concern.
Corruption in Morocco affects almost every sector, from the smallest civil servant to large businesses, and its effects are broad and far-reaching. Public resources, which should be invested in development projects, are often diverted, thus weakening the state’s capacity to provide essential services such as education, health or infrastructure. This state of affairs also undermines Morocco’s competitiveness on the international scene, by discouraging foreign investors who see in this practice legal instability and a lack of transparency.
In addition, corruption leads to poor distribution of resources, exacerbates social and territorial inequalities, and promotes an environment where networks of favoritism and clientelism predominate. These practices harm long-term economic development because they inhibit innovation, discourage entrepreneurship and create distortions in public procurement.
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Faced with this situation, the government is struggling to implement policies capable of stimulating sustainable growth. Public spending continues to increase, largely to finance ambitious development projects aimed at ensuring social stability. However, these investments, coupled with increasing pressure to maintain a balanced budget, are putting public finances under pressure. Despite attempts to increase tax revenue, the implementation of these measures must be done delicately, otherwise it will further weaken the middle class, already under pressure due to the rising cost of living.
The government’s ambitious social protection program is also in difficulty, according to several observers, but also the opposition. While participation in this program is still too low, the reforms put in place are progressing slowly, and the viability of the pension system is seriously threatened. In the absence of profound reforms, it risks collapsing, endangering the security of current and future retirees. Moreover, the latter recently reminded the government
What about the energy and water crisis?
Morocco must also address two major challenges in terms of natural resources: energy and water management. The country has begun a transition to renewable energy in hopes of reducing its dependence on fossil fuels. This approach, although promising, requires colossal investments and substantial technological advances. Added to this is another equally alarming crisis: that of water. The effects of climate change, combined with inefficient management of consumption, have led to a scarcity of water resources. This situation threatens agriculture, which is one of the pillars of the Moroccan economy, and contributes to the exacerbation of social tensions, particularly in rural areas.
Youth unemployment and social unrest
Furthermore, unemployment remains a large-scale structural problem, particularly among young people. Despite the various employment plans put in place by the government, results are still awaited. The unemployment rate remains high, and a large part of the working population, particularly young graduates, is having difficulty finding stable employment. This situation has contributed to a rise in social unrest in certain regions of the country. The rising cost of living, growing inequalities and the feeling that the government is not doing enough to remedy these problems are all factors fueling this social anger.
Faced with these challenges, the government has taken several initiatives aimed at improving the situation. The fight against corruption is at the center of its concerns, with the creation of specialized bodies and the adoption of laws to strengthen transparency. However, these efforts face several obstacles, including the absence of real political will and a well-entrenched culture of impunity. Despite the promises, the perception of corruption remains very high among the population, who are demanding more concrete actions. Citizens express growing disillusionment with reforms that appear ineffective, and the expectation of tangible results increasingly weighs on the stability of the government.
At the same time, tax reforms have been introduced, notably in 2023 and 2024, to reduce the burden on businesses and encourage competitiveness. The gradual reduction in the corporate tax rate should help attract more investment, but these tax measures may not be enough to reduce the budget deficit, which continues to widen.
The reconstruction plan budgeted at $11.7 billion (8.5% of GDP), financed in part by international loans and grants, aims to redress the economic situation. This plan is supported by international aid, including a flexible credit line of $5 billion granted by the IMF in April 2023 and an additional loan of $1.3 billion to deal with climate disasters. However, this increase in public debt, combined with internal budgetary pressures, suggests a slight increase in external debt, which will reach around 42% of GDP in 2024.
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