The finance bill is the legal text fixing the annual state budget for every government department and economic sector.
Rabat – Morocco’s Government Council, chaired by Head of Government Saad Eddine El Othmani, adopted Tuesday a draft of the amended 2020 finance bill.
The council adopted the bill after presenting it to King Mohammed VI on Monday, said Government Spokesperson Saaid Amzazi on July 7.
The finance bill amendments came in response to the COVID-19 pandemic and the different mutations in national and international economic contexts, said Amzazi.
During Monday’s presentation, Minister of Economy Mohamed Benchaaboun emphasized that the amended finance bill focuses on three main axes, namely the progressive restart of economic activity, the preservation of jobs, and the acceleration of administrative reforms.
The updated finance bill allocates MAD 5 billion ($518 million) to accompany businesses in their relaunch period, including public enterprises. The budget would allow companies to benefit from loans with a maximal interest rate of 3.5% and a reimbursement period of seven years.
Moroccan businesses will also benefit from a two-year grace period and a state-guarantee of the loans. The Moroccan government, through the Central Guarantee Fund (CCG), will guarantee 80% to 90% of the loans. The guarantee rate could also reach 95% for micro-sized businesses.
Under the new finance bill, CCG would undergo institutional reform by adopting better international practices, optimizing its governance, modernizing its financial management, and adapting new monitoring and management protocols.
The rectified finance bill also allocates an additional MAD 15 billion ($1.55 billion) for public investments, increasing the total 2020 budget for public investments to MAD 86 billion ($8.92 billion), in order to accelerate the national economy.
Regarding the preservation of jobs, the recently-approved legal text would facilitate both social and economic support for sectors in difficulty, such as transportation and tourism.
The new bill allows 80% of employees registered under the National Social Security Fund (CNSS) and working in hard-hit sectors to keep their jobs. It also allows the acceleration of the registration process for non-declared employees.
Finally, in terms of administrative reforms, the amended finance bill aims to strengthen the business climate by simplifying and digitizing administrative procedures and generalizing payment through electronic methods.
The Moroccan government studied different macroeconomic scenarios and estimated that the gross domestic product could decrease by 5% in 2020, while the state budget deficit could reach 7.5%, Amzazi concluded.