BAM Annual Report: Corruption weakens investors visibility

The Wali of Bank Al-Maghrib (BAM), Abdellatif Jouahri,  in his 2021 annual report presented to the King, did not derogate from the rule of being inclusive concerning the main subjects. Thus, the Wali began by indicating that despite a difficult international context, the national economy was able to achieve a remarkable performance in 2021, with a growth of 7.9%,  thanks to the vaccination campaign, which has made exceptional progress, and to the economic recovery program launched by the King, in addition to the “maintenance of monetary and budgetary stimulus and favorable climatic conditions”. This rebound generated a sharp rise in tax revenue, thus helping to reduce the budget deficit to 5.9% of GDP, while the recovery in the labor market was only partial. Foreign trade is no exception. It recorded a remarkable improvement, and remittances from Moroccans residing abroad reached a record level of 93.7 billion MAD. This made it possible to contain the current account deficit at 2.3% of GDP.

For its part, inflation came out at 1.4% instead of 0.7% a year earlier, under the effect of external pressures, but this year, the inflation rate has started to rise again to reach unprecedented level, under the effect in particular of the rise in the price of petroleum products, the transport of goods, etc.

■ The harmful effects of corruption:

Concerning the points that hurt, the Wali of the Central Bank has once again been outspoken. He said among other things that the productive fabric is confronted with implementation difficulties by surveys carried out with businesses. These difficulties consist mainly in  the pressure and heaviness of taxation, the competition from informal activities, and above all the incidence of corruption. The latter is a scourge that weakens visibility for operators and investors and even threatens economic development and social cohesion. Corruption is one of the manifestations of a structural deficit from which the country suffers, namely the quality of public governance at both the local and central levels. Despite the will, the determination and the many laws and regulations, as well as measures and strategies put in place, Morocco is unable to make progress in this area. Its poor performance in the international rankings even suggests a certain regression in recent years, which calls for a questioning of the approaches adopted so far and above all for stronger and more determined action, said the Wali.

■ Social protection: What the central bank recommends:

For Abdellatif Jouahri, the generalization of social protection, launched by the King, is cited as an example by institutions and international partners, but, he warns and says that «for its success and its completion within the planned deadlines, it is essential to carry out the parallel projects, which should make it possible to mobilize part of the necessary resources, such as the completion of the reform of the “compensation”  (subsidies to basic commodities) and the implementation of the Unified Social Register. In addition, the reform of the pension schemes is still partial and incomplete, while the financial balance of some of them is experiencing a worrying deterioration».

M.C.