Rabat - Economy minister Benchaaboun has announced that Morocco will privatize some public companies to help reduce the budget deficit to 3.3 percent of GDP in 2019.
Rabat – Economy minister Benchaaboun has announced that Morocco will privatize some public companies to help reduce the budget deficit to 3.3 percent of GDP in 2019.
The move will also generate MAD 8 billion, Minister of Economy and Finance Mohamed Benchaaboun said on Monday in a parliamentary session.
The decision, according to Benchaaboun, comes to improve the governance of public companies and to increase state resources.
Benchaaboun estimated that the treasury’s deficit in 2018 would end at 3.8 percent instead of 3 percent of GDP as stipulated in the finance bill.
Without revenue from privatization, the budget deficit is expected to stay almost flat at 3.7 percent from a forecasted 3.8 this year, Reuters reported.
However, the minister did not reveal which companies the government plans to privatize.
According to Al Massae, the National Railway Office (ONCF) and the Moroccan Airports Authority (ONDA) may be privatized..
Benchaaboun also stated that increasing taxes on tobacco consumption will generate additional revenue estimated at MAD 1.2 billion in 2019.
The government has also considered other measures to raise revenues. The 2019 Finance Bill will levy an additional 2.5 percent corporate income tax on companies with annual profits equal to or more than MAD 40 million. The government believes it will generate MAD 2 billion in 2019-2020 to be used as a “solidarity contribution” to reduce social disparities.
Benchaaboun also noted the impact that rising oil and gas prices will have on financial balances. The economy, he added, requires measures to mobilize resources, control spending and establish mechanisms to reduce the burden on the investment budget.
The government allocated MAD 17.67 billion for the subsidy fund to subsidize butane gas, sugar, and flour in 2019. The significant increase of MAD 4.65 billion from the 2018 budget can be explained by the increase of oil prices at the international level.
Benchaaboun said that the increase in oil and gas prices “will imply an increase of MAD 5 billion in the expenses of the subsidy fund at the end of 2018.”
“These are all indicators that illustrate the soundness of the national economy, but they must be consolidated by restoring the citizen’s confidence through quality social benefits and ensuring decent employment, a stable and reasonable income,” the minister said.