The loan is meant to improve life quality and create jobs in rural areas as part of Morocco's decentralization plan.
Rabat – The Board of Directors of the African Development Bank (AfDB) approved on Thursday, November 28, a €100 million credit line for the Municipal Equipment Fund (FEC) to finance new projects of investment and utilities in Morocco.
With the decentralization, Morocco aims to transfer key powers and resources to local officials, and enable the regional authorities to have greater control of local economic development.
Through the projects, local authorities aim to improve the quality of public services, particularly in rural areas, and to develop new economic and industrial activities at the local level, the AfDB said a statement.
“We are pleased with this first partnership with the FEC,” AfDB’s director general for the North Africa region, Mohamed El Azizi, said in a statement. He added that, with the bank’s investment in the initiative, “this operation will enable local authorities to increase the attractiveness of their territories to support, more globally, the dynamic of Morocco’s industrial acceleration.”
By mobilizing funding to support Morocco’s decentralization plan, the FEC wants to strengthen and diversify the country’s production capacity and support growth in various sectors of the economy.
More broadly, the FEC aims to contribute to improving the country’s competitiveness, creating new employment opportunities, especially for youth and women, as well as generating significant tax revenue for the state, the AfDB pointed out in the statement.
The AfDB’s Country Manager for Morocco, Leila Farah Moukaddem, emphasized that “the credit line will foster an inclusive growth dynamic where the territories will increase their capacity even more to become real development hubs and industrial competitiveness.”
She noted that the inclusive growth dynamic will benefit local people and industries.
The funding is in line with the AfDB’s five strategic priorities called “High 5”. It meets Morocco’s objectives in terms of supporting industrialization and improving the quality of life of its population.
“With this operation, we are consolidating the resources available to local authorities. This means more investment opportunities and job creation at the local level, which is set to become a real platform for development, ” said Stefan Nalletamby, the AfDB’s director of the financial sector development department.
AfDB provided funding for 35 projects in Morocco for a total investment of about $3 billion in 2019, making Morocco its top funding recipient, according to the latest synthetic review of the bank’s results, unveiled Thursday, September 26, in Rabat.
The funding covered the sectors of energy (31.5%), transportation (19.8%), water and sanitation (15.5%), and multi-sectoral and social development operations (12.7%).
AfDB’s funding also focused on the private sector (11.2) and agriculture (9.4%).