Rabat – Morocco’s Minister of Minister of Economy, Finance and Administration Reform, Mohamed Benchaaboun, announced on Wednesday that the government intends to begin gradually lifting subsidies on commodities such as sugar, wheat, and butane gas.
The minister made the announcement before the Finance Committees of the Parliament as the Moroccan parliamentarians discussed the government’s budget for 2022.
In April 2021, the Compensation Fund stated that it would decrease subsidies for the products. However, Benchaaboun’s statement is the first official announcement in parliament.
Read also: Morocco’s Compensation Fund: Subsidy Decrease for Butane Gas, Sugar
Due to the COVID-19 pandemic, the Moroccan government has had to reconsider its budget.
The parliamentarians laid out a timeline for the reduction of subsidies, stating that the compensation fund would see the “total liberalization” of sugar by 2022 and begin the liberalization of wheat in the same year. By 2023, the fund will lift subsidies for wheat and flour completely and rescind at least 50% of butane gas.
Despite suppliers ensuring consumers that butane gas would be distributed through a “natural cycle,” the government intends to lift subsidies for butane entirely by 2024.
As the budget cuts fall in-line with Morocco’s social protection plan, eligible families will still receive special payment plans for commodities such as butane gas, sugar, and wheat products.
The decision, falling within the 2022 budget plan, is a crucial step to revitalizing the Moroccan economy after the COVID-19 pandemic. Additionally, the ministry noted that the move will strengthen other sectors of the Moroccan economy such as human capital.
The 2022 budget has projected 3.2% economic growth, which would be the first economic boom since 2019.
