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EBRD optimistic about Moroccan economic recovery

The European Bank for Reconstruction and Development (EBRD), which recently granted a financing facility of 145 million euros to the BMCE Bank of Africa group, is convinced: Morocco has solid fundamentals to face the crisis global health related to the new coronavirus (Covid-19) pandemic.

In any case, said Marie Alexandra Veilleux-Laborie, the director in charge of Morocco at the European Bank, recalling to be convinced that the Kingdom has in the past demonstrated its resilience to internal and external shocks.

“I think that Morocco has solid fundamentals to face the current difficulties”, she precisely declared in an interview and in which she praised the proactivity of the public authorities in the management of this pandemic.

But even if these reacted very early on by taking a set of measures and putting in place a certain number of measures capable of limiting the effects of the pandemic on the country, the local official of the EBRD nevertheless believes that the Morocco must “expect a year 2020 which is extremely difficult economically and socially, not only because of the consequences of the health crisis, but also of the agricultural drought with a very low level of rainfall”.

Marie Alexandra Veilleux-Laborie, who spoke on the recovery of the economy after the coronavirus and the actions carried out by the EBRD to support the efforts of the Kingdom to get out of this crisis, also pointed out that “the balance of payments is strongly impacted, notably due to the loss of tourism income, the drop in money transfers from abroad and exports, mainly to Europe”.

During this interview, she also drew attention to “the fall in domestic demand which will have a strong impact on public finances with a sharp increase in the public deficit”.

The director of the EBRD office in Morocco has also noted the very serious situation observed at the level of companies, citing the latest statistical data from the High Commission for Planning (HCP) which show more than 140,000 companies at the stop.

Proof of the gravity of the situation, even “the informal sector is also hit hard, especially due to confinement,” added Marie Alexandra Veilleux-Laborie saying that “this has a very significant direct social impact”.

However, it remains optimistic about the revival of the national economy. If it cannot base itself on any existing economic model against this pandemic, Morocco can boast of having taken measures to mitigate the negative economic and social fallout.

These include support for the most vulnerable populations, SMEs and more generally businesses and employment, as well as Bank Al-Maghrib support for the banking sector.

For Marie Alexandra Veilleux-Laborie, if it is necessary to coordinate public policies at the international level, taking into account in particular the interdependence between Morocco and Europe, it is up to each country to decide how to revive the economy.

Regarding Morocco, she recalled that before the Covid-19 pandemic, the country had started to reflect on its new model of economic development.

Thus, the director of the EBRD office in Morocco estimated that “once the management of the health emergency has passed, this reflection will be even more topical in order to redefine the development model”.

In this case, it will be about initiating “deep structural transformations, both economic and societal, and creating an environment conducive to an inclusive economy, in particular in terms of access to vital services such as health and education, and a low-carbon green economy to cope with climate change,” she said.

But before, to successfully revive its economy, Morocco must target several priority sectors.

Marie Alexandra Veilleux-Laborie first dwelled on extremely fast digitalization, which led to significant technological change. “I think this trend will not be fleeting because the environmental benefits in terms of pollution, but also the gain in productivity and the savings linked to digitalization are significant, and will push companies and States to further advance in this direction”, she argued.

Then there is the tourism sector which is among the most affected by the crisis. In her opinion, “it is urgent to support this sector both in the short and long term, to show that we are ready to welcome tourists again in a healthy environment”, she explained.

Then comes the agricultural sector which “remains and will be essential” and which the “Generation Green” strategy should make it possible to transform in depth in order to meet basic needs and to ensure food sovereignty.

Given the new situation, Marie Alexandra Veilleux-Laborie also believes that Morocco should “put in place innovative processes to meet the expectations of global consumers”. Especially since a global shortage of the supply of agricultural products is expected, “lack of labor capable of harvesting in due time due to the confinement and disruption of conventional routing and transport circuits.”

As for the export industries and in particular the automobile, aeronautics and textiles, she estimated that “coordination is necessary with the partners upstream and downstream of the Moroccan production chains, with very precise health specifications to guarantee the fluidity of trade”.

Finally, given the disruption of trade flows and value chains which will probably lead to a recomposition of the world trade map for the benefit and to the detriment of each other, the African dimension is an asset for Morocco which “seems to me to be very well placed to take advantage of this new restructuring,” she concluded.

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