Morocco is set to receive an immediate disbursement to the tune of $415 million from the International Monetary Fund (IMF)
This follows the completion of the second review under the Resilience and Sustainability Facility (RSF) by the IMF Executive Board bringing total disbursement under the programme to $747 million.
The funding is expected to enhance climate resilience and decarbonization agenda of the North African nation which has suffered agriculture output decline due to drought experienced this year. IMF says though non-agricultural output has remained robust, and domestic demand is strengthening, loss of jobs in the agricultural sector is keeping unemployment at a higher level than before the pandemic.
“The focus on decarbonization, while limiting the impact on the most vulnerable, is welcome. In the current socioeconomic context with still elevated food prices and high unemployment, it appears more socially acceptable to pursue increases in excises on coal and other highly polluting products than a higher value-added tax (VAT) on fossil fuels,” said Kenji Okamura, IMF Deputy Managing Director.
The multilateral lender however noted that that Morocco’s inflationary pressures have abated while the fiscal deficit is on track to meet the 2024 budget target, with increased current spending offset by stronger-than-expected revenues.
Additionally, strong revenues from tourism, exports of goods, and remittances have kept the current account deficit at low levels, IMF stated.
The RSF facility is tipped to be crucial to support Morocco’s green transition through liberalization