Morocco: The government to launch subsidies reform in June
by Larbi Arbaoui
Morocco World News
Taroudant- Jan 6, 2013
The Moroccan government is willing to reform its costly system of state subsidies for food and energy in June, said the Minister of General Affairs and Governance, Mohamed Najib Boulif.
“Technically, the reform of the subsidies system is quite ready,” Mohamed Najib Boulif was quoted by the official news agency Maghreb Arab Press (MAP.”Once talks are concluded and the political decision is taken, it will be launched,” he added.
The state subsidy bill for food and energy has remarkably increased to MAD 53 billion ($6.25 million) in 2012 up from to 48.8 billion in 2011 and 29.8 in 2010.
The steep increase recorded in 2012 is due to the government’s expenditures during the same period to maintain social peace in the context of the Arab spring uprisings.
The minister expects the annual bill to be reduced to 24 billion if the reform goes ahead in full, but the measure could in itself eventually raise inflation.
During a debate in Parliament, Mr. Nizar Baraka, the Finance Minister, expressed his concerns that such reform could lead to the impoverishment of the middle classes.
The PJD-led government seeks to restore its finances by reforming the compensation scheme through reducing subsidies and focusing on direct aid to poorer.
In a meeting with his party members on December in Rabat, Mr.Abdelilah Benkirane, said that social assistance, expected not to exceed MAD 300 per person, should be delivered directly to the poorer in the form of monthly subsidies.
Some economists said that the newly released banknote of MAD 25 is a sign that inflation, now officially running below 2 percent, is likely to rise.