## Morocco & the IMF: Partnership for Progress

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**Canonical URL:** [Morocco & the IMF: Partnership for Progress](https://www.imf.org/en/countries/mar/morocco-and-the-imf-partnership-for-progress)

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### Overview / Context
- Publication date: October 2020.
- Morocco is positioned on the Mediterranean as a bridge between Africa, the Middle East, and Europe.
- Economic vulnerabilities: a relatively small, oil- and rain-dependent economy; exposed to external shocks including the global financial crisis of 2008 and the economic fallout from the COVID-19 pandemic.
- Structural challenges: slowing economic growth over the last decade and job creation that has not kept pace with an expanding working age population.

### IMF Partnership: Strategy & Policies
- Morocco’s relationship with the IMF dates back to 1958.
- After the 2008 crisis Morocco worked closely with the IMF to support the economy and prevent another crisis.
- In 2012 the Government approached the IMF to access a Precautionary Liquidity Line (PLL) arrangement, a credit facility available only to countries with good macroeconomic fundamentals and sound policies; objective: insure Morocco against economic shocks from abroad.
- Minister of Finance Mohamed Benchaaboun (early 2020): the PLL’s purpose “is obviously not for Morocco to draw on this line, but to be able to give more assurance to our partners and lenders--and also demonstrate, if necessary, all the trust the IMF is putting in our country.”
- April 2020: Morocco drew on $3 billion from the PLL to help maintain adequate levels of reserves and tackle the sizable social and economic impacts of the pandemic crisis.
- The PLL has provided insurance against external risks and inspired confidence among international investors and market participants.

### IMF Partnership: The Nature of Collaboration
- The IMF relationship is characterized by ongoing dialogue and mutual respect, according to Morocco’s Central Bank Governor Abdellatif Jouahri.
- Regular interactions:
  - Annual meetings between teams from Morocco’s Finance Ministry and Central Bank with IMF staff as part of Article IV consultations.
  - Since 2012, more frequent meetings to monitor reforms as part of PLL tracking discussions.
- Technical assistance and assessments cited as high quality; Jouahri emphasized work on monetary policy assessments and the Fund’s consideration of Morocco’s positions.
- Jouahri’s assessment: the Fund acts as a partner that reports Morocco’s positions honestly to the IMF Executive Board and trusts Morocco to make decisions at the most opportune moment.

### Results: A Diversifying Economy
- Morocco has continued to diversify while weathering external shocks, with growth in phosphates, chemicals, and the auto sector alongside traditional sectors (agriculture, fishing, tourism).
- Automotive sector specifics:
  - 2018 export value cited as 72 billion dirhams or 7.2 billion euros.
  - The sector comprises more than 200 actors.
  - Three OEMs with an installed capacity of 700,000 vehicles—making Morocco the leading automaker in the Middle East and North Africa.
  - Renault Group: 12,000 employees and 400,000 vehicles produced last year—90 percent exported to more than 70 countries.
  - Tangier factory described as the largest automobile factory in Africa.
- Policy environment: stability cited as a major factor attracting investment and enabling export growth across the Kingdom.

### Africa: Strengthening South-South Cooperation
- Minister of Finance Mohamed Benchaaboun: acceleration of economic opportunity “at the level of the African continent” and a desire to strengthen South-South cooperation under the leadership of His Majesty.
- Morocco’s role in African agricultural services strengthened by OCP Group:
  - OCP founded in 1920.
  - OCP is one of the leading exporters of phosphate rock and fertilizers in the world and has turned a strategic gaze southward.
  - OCP CFO Ghislane Guedira: the next agricultural green revolution will take place in Africa due to available arable land and potential to increase farmers’ productivity; OCP operates in a sector contributing to food security for a growing population.

### Conclusion: A Better Distribution of the Fruits of Growth
- Demographics and connectivity:
  - About two-thirds of the population is under age 35.
  - Morocco has signed more than 50 new free-trade agreements with countries across the globe in the past decade.
- Outcomes of IMF collaboration: strengthened macroeconomic resilience, weathering of past external challenges, and support for economic growth.
- Remaining policy priorities: tackling long-term challenges such as income inequality and unemployment, which remains high, particularly among women and young people.
- Institutional perspective:
  - Central Bank Governor Jouahri: international organizations have evolved to focus not only on growth but on inclusive growth and “a better distribution of the fruits of growth.”
  - Minister Benchaaboun: His Majesty has embarked on a major reflection on a new development model and calls for a new generation of sectoral programs; for these reforms “the Fund’s support is always desired.”

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## References

- [Marrakesh2021](https://www.imf.org/en/News/Seminars/Campaigns/2020/Marrakesh2021)
- [Morocco & the IMF: Partnership for Progress](https://www.imf.org/en/videos/view/6132678095001)
- [Morocco & the IMF ▷](https://www.imf.org/en/Countries/MAR)

_Source: https://www.imf.org/en/countries/mar/morocco-and-the-imf-partnership-for-progress_