Pressures on public finances at a historic level

Question time at the House of Representatives on Monday, May 16 allowed Fouzi Lek­jaâ to explain to parliamenta­rians the multiple pressures on public finances. The Minister in charge of the Budget took this opportunity to set the record straight on specific issues pres­ented as important choices to be made. The first relates to a possible recourse to Government subsidy to maintain price stability.

For him, this possibi­lity supposes a financial effort of 74 billion MAD (about 7.4 billion USD), i.e. additional budgetary allocations of nearly 60 billion MAD compared to the forecasts of the Appropriations Bill in force. To achieve this, it will be necessary to cancel all public invest­ments by the national Government, including in priority sectors such as health and national education, and this, with all the negative repercus­sions on the national economic dyna­mics. The other choice involves the reduction of taxation on petroleum products, the average annual revenue of which totals 26 billion MAD. This will have a negative impact on bud­getary balances, said the Minister in charge of the Budget.

According to him, we are facing a complex equation, which is diffi­cult to solve. On the one hand, the Government is expected to execute public investments programmed in health, national education, and basic infrastructure, etc. On the other, the Government is required to reduce debt and oil product taxation, while bea­ring the significant increases in sub­sidies-related expenditures. Without even mentioning the mobilization of financial resources of 10 billion MAD to cope with the drought, the recovery of tourism requires 2 billion MAD, the support for the transport sector 1 bil­lion MAD, and the implementation of the generalization of Social Protection will also have a cost.

■ The burden of the Government subsidy for wheat: The pressure on public finance has never reached a level like today. Thus, for the import of wheat, customs duties have been suspended since last November. Des­pite this, the cost for the import of 20 million quintals in the first 4 months of this year reached 2.52 billion MAD, with flat-rate support of 113 MAD/ quintal. The Government has provided the necessary stocks of this vital pro­duct, particularly with the import of large quantities in January -February for an amount of 774 million MAD. As a result, the cost of Government subsidies planned to guarantee the supply of wheat and the stability of the price of bread at 1.20 MAD per loaf during 2022 is estimated at 7.320 billion MAD.

■ Butane gas: record support in April: For butane gas, the Govern­ment spent nearly 7.3 billion MAD during the first four months of this year, compared to 4.2 billion for the same period of 2021. During the last period, from January to May, the ave­rage Government support for the 12 kg gas cylinder reached 100 MAD, or 71% of its price.

In April, the support reached its his­torical level with 116 MAD, which represents 74% of the real price which reached 156 MAD. This is why the cost of support for butane gas reaches 9.2 billion MAD between January and May 2022. With the current level of its price, the forecast cost of support for the consumption of this product during this year will reach 22 billion MAD, i.e. an increase of 51% compa­red to last year.

Mohamed CHAOUI