LMoroccan authorities continue to make steady progress in strengthening Morocco’s resilience to climate change”declared the Deputy Director of the Fund, and Acting Chairman of its Board of Directors, Kenji Okamura.
This statement was made in a press release published at the end of the second review of the Resilience and Sustainability Facility (RSF) program for Morocco. To this end, the IMF disbursed $415 million to the Kingdom.
According to Okamura, the progress made by Morocco is favored by “very strong fundamentals and policy frameworks and a sustained track record of effective policy implementation.”
Relevant to “solidity” of the results obtained within the framework of the RSF system, the senior IMF official indicated that the Moroccan authorities, aware of the risks linked to climate change and natural disasters, “remain committed to the green transition and strengthening climate resilience”.
Welcoming the efforts made in terms of decarbonization “while limiting the impact on the most vulnerable”the Bretton Woods institution recommends a series of measures to reduce dependence on polluting energy sources, and underlines the crucial importance of “liberalization of the electricity sector, greening of the tax system, combating the risks that climate change poses to the stability of the budgetary and financial systems, and protecting groundwater resources.”
In this sense, the Fund notes that Morocco is making investments “important in hydraulic infrastructures aimed at remedying water scarcity”which must be supplemented by “demand management reforms”.
Evoking the imperative to stimulate private sector participation in renewable energies, the international institution notes that such a strategy “will not only help Morocco achieve its Nationally Determined Contribution (NDC) targets, but will also reduce its dependence on imported fuels, improve business competitiveness and help create jobs.”
Regarding the fundamentals of the economy, the IMF emphasizes that if agricultural production suffered a new drought in 2024, which had particular repercussions on the job market, “non-agricultural production has remained robust and domestic demand is strengthening”.
Furthermore, inflationary pressures have eased, at a time when the budget deficit is “on track to meet the 2024 budget target, with increased current spending offset by higher-than-expected revenue.”
“Significant revenues from tourism, exports of goods and remittances from migrants have helped keep the current account deficit low”notes the same source.
In September 2023, the IMF Executive Board approved financing of $1.3 billion for Morocco under the Resilience and Sustainability Facility.
This 18-month funding is intended, according to the international financial institution, to support Morocco’s transition to a greener economy and contribute to strengthening its preparation and resilience in the face of natural disasters, particularly those linked to climate change.
(with MAP)
