Mr. Boussaid gives a press conference on a bond issuance on the international financial market : 19/06/2014

Mr. Boussaid gives a press conference on a bond issuance on the international financial market

The Minister of Economy and Finance, Mr. Mohamed BOUSSAID gave Friday, June 20th, 2014 in Rabat, a press conference on the issuance of a bond on the international financial market. Present at the meeting which was attended by the Minister Delegate in charge of the Budget, Mr. Driss El Idrissi Azami and representatives of banks, joint leaders, about sixty press bodies representing national as well as foreign media.

The exhaustive presentation of the Minister made it possible to the journalists in particular to become acquainted with the recent evolution of the debt, its structure, the successful release on the international financial market and of the prospects and financing needs for 2014.


Mr. BOUSSAID stressed that all the modern countries use debt leverage to support economic and social development. The statistics presented gave an outline on the evolution of the total debt of the Treasury which declined passing from 67.1% of the GDP with 58.2% between 2001 to 2004, a slight increase in 2005 with 62.1%, to then gradually fall, going up to 47.3% between 2008 and 2009. This trend reduced since, for a continuous progression which reached 63.5% of the GDP in 2013. This increase is the result of the State’s expansionary fiscal policy over the period 2009-2012 to voluntarily absorb the impact of the external shocks. For instance, the average volume of public investment and the average charges of compensation have both, doubled between this period and the period before, namely 2005-2008.

Starting from 2013, the government adopted a stabilizing budget policy which put our country on a budgetary recovery path which should come to stabilize debt ratio from next year.


The Minister also provided an overview of the legal framework of the Moroccan debt, stressing that the use of the latter is framed upstream and downstream by the Parliament and that net debt over the budgetary year must be lower or equal to investment budget. As regards the funding strategy, Mr. BOUSSAID stressed its six principles which consist on allowing the State to honor its commitments to save and develop the debt capacity of the country, to reduce the cost of financing and risks, optimizing the conditions of funding, to diversify our investment base and contribute to the development of the Treasury securities market.

As for the funding sources of the Treasury, Mr. BOUSSAID revealed that the auction market of the treasury bonds on domestic market remains the main source of funding. He further stated that the external financing depends on an intensive mobilization of grants and concessional external financings. “The use of the international financial market is done only when conditions are favorable”, he specified.

Referring to debt structure, the Minister stated that Morocco compares itself rather favorably with other countries in terms of debt level, with a debt of the Central Government reaching 59.6% against 70.5% for Spain, 85.8% in France, 120.7% for Italy but also 45.8% for Tunisia and 36.2% for Turkey. For external public debt, it presents 25.4% in case of Morocco when it is 80.2% for Egypt, 79.6% for Jordan, 44.5% for Tunisia and 36.4% for Turkey.


Because of the recent issuance of a bond on the international financial market in an amount of EUR 1 billion, the Minister provided explanations regarding the timing of the issuance and its characteristics.

Within this framework, Mr. Boussaid specified that the timing of the issuance was chosen to, on the one hand, record the performance of the Moroccan economy, recently greeted by the International Monetary Fund as well as by the credit rating agencies Standard and Poor's and Fitch Rating and on the other hand, to take advantage of the favorable conditions which prevailed on the international financial market and which allowed a successful return of our country on the market of the euro, after an absence of almost four years.

For the characteristics of the issuance, the Minister announced that the distribution by investors’ profile shows in particular three main categories: funds managers (55%), Banks and private banks (22%) and insurance companies (15%). In terms of geographical distribution, he mentioned that the greatest part which is attributed to Germany and Austria with 22% followed by the Middle East with 21%, the United Kingdom with 18% France with 12%, Other countries of Europe with 11%, the offshore US (7%) and others (9%).

Mr. Boussaid thus stated that the specific conditions of the recent bond issuance on the international financial market are better than those for the previous ones. He also reported that the yield rate used on the issuance at 10 years on the International Financial Market (3.702%) is lower than the yield of the same maturity on the domestic market (4.393%).

Finally, the Minister of Economy and Finance announced that the need for net funding for the second half of 2014 is estimated at approximately 16 MM dh nearly 10 MM dh will be covered by internal resources.