The World Bank has approved a $500 million loan to assist Morocco in implementing reforms aimed at improving social protection and access to health services.
The financing is targeted primarily at vulnerable populations adversely affected by various shocks, including the challenges posed by the COVID-19 pandemic, climate-related risks such as drought, international conflicts, inflation, and the recent earthquake in Al Haouz.
The earthquake, with a magnitude of 6.8, struck on September 8, resulting in the loss of more than 2,900 lives, particularly in hard-to-reach mountainous areas. In response, Morocco has outlined plans to allocate 120 billion dirhams for a post-earthquake reconstruction plan, focusing on infrastructure upgrades over the next five years.
The government’s broader strategy includes phasing out subsidies on cooking gas starting next year and replacing them with direct cash handouts to benefit needy households.
By 2026, Morocco aims to allocate 50 billion dirhams ($5 billion) annually to mandatory health coverage, financial assistance for the needy, and housing aid. Funding for these initiatives will be sourced from the state budget, a solidarity tax, and the reallocation of subsidy funds.
Despite increased spending on social safety nets, the government anticipates a reduction in the fiscal deficit, expecting it to shrink to 4% of GDP next year from a forecasted 4.5% for the current year.
