Rabat – As Morocco’s compensation regime continues to equally benefit the rich and the poor, Head of Government, Saad Eddine El Othmani, pointed out that the Government is working on “a reform of the compensation fund” to ensure “equitable distribution of available resources.”
Reform measures that develop will likely be the result of a process that emphasizes progressive reform and the protection of subsidies for those citizens most at risk. For El Othmani, lessening the burden on the government’s budget, though, is inevitable, as he said during an intervention in the Parliament on January 23.
The Head of Government pointed out that the compensation fund represents a significant source of government spending and a principal cause of government debt. In 2017, an estimated MAD 12 billion was spent on the fund, while nearly MAD 200 billion was spent on the fund between 2011 and 2015.
The government is “determined” to continue “phasing out subsidies on butane gas, sugar and flour,” he said, adding that this will be offset by increased funding for social development policies and programs that support vulnerable populations.
El Othmani acknowledged dysfunctions in the compensation system, saying that it benefits the rich more than it does vulnerable Moroccans.
Concerning butane gas subsidies, which are often the most contentious of all subsidies, Minister of General Affairs and Governance, Lahcen Daoudi, said that “many of those who are currently receiving support from the compensation fund do not want subsidies to be abolished, as some of them consume 100 bottles of gas per day for water extraction.”
“Currently, there is be no increase and there will be none soon,” said Daoudi, indicating that this decision is taken in consideration of the “poor and vulnerable categories.”
“The government wants to reserve its grants only to those who need them, as it is working to define the eligible population who should benefit from social assistance,” El Othmani concluded.
