"The new growth drivers are in good working condition; the contribution of non-agricultural activities would amount to 3.7% this year and GDP will reach 100 billion dirhams." These are the key statements made by Mr. Mohammed BOUSSAID, Minister of Economy, Friday, January 8th 2016 in Casablanca.
Mr. BOUSSAID who was the guest of the Club de l’Economiste gave his view on a number of strategic issues for the national economy. But first, he stated that the Government tackles the year 2016 with serenity and maintains its growth rate forecast to 3%. In terms of macroeconomic balances, he thinks that significant progress has been made since the budget deficit which exceeded 7% of GDP in 2012 was reduced to below 4% in 2015. As for foreign exchange reserves, he announced that Morocco now has reserves that can provide coverage for seven months of imports against less than four months in 2012.
Growth and employment
The link between growth and employment was one of the main points discussed at the Club de l'Economiste. Noting that growth in Morocco is not creative of jobs, Mr. BOUSSAID explained that this growth was financed by the budget deficit. "The country has much room to create jobs in sectors where competitive advantage is proven.
In this respect, the ambition to develop the industrial sector is sustainable, "argued the Minister. He added:" Thanks to the political stability and sound public finances, Morocco can become in the medium term, a production and export hub of industrial products with high added value in the fields of automotive, aerospace and related equipment ".
The tax audit
Addressing fiscal control, Mr. BOUSSAID conveyed three key messages: The tax audit will focus on documentary checking, its time will be halved and the number of inspectors’ missions will increase. The Minister also stated that the tax administration controls only 2% to 3% of all formal enterprises and had introduced an electronic application to carry out targeted checks. He also announced that starting from 2017,all companies will be controlled through the generalization of the dematerialization of tax returns and payments.
Default interest and antidumping measures.
The Club de l’Economiste was an opportunity for the Minister of Economy and Finance to urge companies to demand the default interest provided for by law resulting from late payments. He, thereby, announced the future launch of a range of measures in legislation to address this phenomenon. Furthermore, the Minister opposes any direct involvement of the State in companies in difficulties and continues to support the implementation of safeguard measures to protect the economy in accordance with the rules of the World Trade Organization.
The investment achievement rate
The investment achievement rate is improving. It exceeded 70% in 2015 against 68% in 2014 and 65% in 2013. "In the years to come, the investment emission rate should continue to improve. This is because the organic budget law and multiannual programming over a three-year period guarantee more visibility on the budget for different government departments”, specified the Minister.
The SAMIR case
The Minister asserted that the State is just being an observer for the SAMIR case and behaves like any creditor. Adding that the State has always accompanied this entity, he stated that the SAMIR didn’t respect its commitment to increase capital, nor to pay debts owed to customs. "The company needs capital and shareholders made a commitment to it. We ask them to meet their obligations, "said the Minister who affirmed that Morocco needs a refining industry, considered to be the essential tool to secure supply.
The Casablanca Stock Exchange
The demutualization that opens the discussion of the company manager of the market to banks, insurers, the CDG and Casablanca Finance City Authority, was also raised at this meeting. For Mr. BOUSSAID, the challenge is to make the stock market more attractive and competitive, but also to restore its credibility. "We cannot have a place with a PER (Price Earning Ratio) of 16, while it is between 8 and 9 on average over competing markets," stated the Minister. He stressed that these market conditions are obstacles to foreign investment. The market control upgrade is another project that concerns the competent authorities. Before installing the Moroccan National Capital Market (AMMC), the Ministry of Economy and Finance prepares new laws to strengthen the sanctions mechanism. Violations will be reclassified and the fines will be reviewed in the light of practices in other countries.
The debt level is expected to reach 60% of GDP in 2020 because Morocco still has margin especially after the achievements of 2015. “The encouraging news is that we managed to break with the disproportionate and alarming increase of debt of the previous years”, asserted Mr. BOUSSAID.
As a result of a fiscal policy devoted primarily to fund operating expenses, which according to the Minister was not advisable, the debt has risen to incredible levels especially in 2012 and 2013.
As such, Mr. BOUSSAID recalled the provisions of the new Organic Law on Finance Laws, which call for the exclusive use of debt to finance capital expenditures. "The act seeks to strengthen parliamentary control over public finances that eventually recovered," specified the Minister.