Moroccan Economy and Finance minister’s sacking ‘expected’

TETOUAN, Morocco - The dismissal of Moroccan Economy and Finance Minister Mohamed Boussaid by King Mohammed VI three days after the monarch’s speech to mark the 19th anniversary of his accession to the throne was expected, analysts said.

Last year, King Mohammed VI slammed the government for failing to implement a development programme called “Al Hoceima, Manarat Al Moutawassit” (“Al Hoceima, the Lighthouse of the Mediterranean”), which was signed in 2015.

The Moroccan monarch’s decision to dismiss Boussaid, which was taken in consultation with Prime Minister Saad Eddine El Othmani, was “part of the implementation of the principle of accountability which His Majesty is keen to apply to all officials, whatever their ranks or affiliations,” the Royal Cabinet said in a statement August 1.

Boussaid is the fourth minister in the current government to be sacked. In October 2017, the king fired the ministers of education, planning and housing and health for failing to improve the economic situation in the Rif region, which was shaken by protests in late 2016 and early 2017.

Rachid Aourraz, a researcher at the Moroccan Institute for Policy Analysis, said the Manarat Al Moutawassit development programme was probably one of the major reasons behind Boussaid’s dismissal.

Le360.ma, a news website considered close to the palace, reported that Boussaid, a member of the co-ruling liberal National Rally of Independents (RNI) party was sacked because of his ministry’s delays in releasing funds provided for the Manarat Al Moutawassit programme.

Aourraz said Boussaid failed to manage the liberalisation of fuel prices, which have soared, prompting consumers to boycott Afriquia petrol stations, which are owned by RNI chief and Agriculture Minister Aziz Akhannouch.

“Another reason could be the sale of the insurance firm Saham Assurance owned by Minister of Industry Moulay Hafid Elalamy to South African firm Sanlam, which resulted in a loss of more than [$42 million] of tax revenue to the government,” Aourraz said.

Le 360.ma said Elalamy benefited from a tax measure, introduced in the latest draft of the 2018 Finance Law and tailored by the Ministry of Economy and Finance in a way that it exempted Saham Assurance from registration fees on the sale of shares.

“The application of this measure to the Saham-Sanlam transaction automatically results in a loss of 420 million dirhams ($44 million) of tax revenue (equivalent to 4% of the overall volume of the transaction),” the news site said.

Aourraz said he expected more public officials to be dismissed.

“It is just the beginning of a political earthquake whose replicas will likely hit several public administrations,” warned Aourraz.

Both heads of the Central Bank and the Court of Accounts presented their reports to the King in Al-Hoceima on the eve of the throne anniversary, respectively criticising Morocco's economic performance and finances.

"The pace of progress remains below expectations, especially as the non-agricultural activity remains slow,” said Abdellatif Jouahri, the governor of Bank Al Maghrib, raising the limits of investments which reduce the chances of a rapid recovery of growth and employment.

The trade deficit worsened by 7.8 percent to 100.8 billion dirhams at the end of June 2018 against 93.5 billion dirhams during the same period a year earlier, according to the Foreign Exchange Office.

“This aggravation is due to a significant increase in imports (+21.6 billion dirhams), which is greater than that of exports (+14.3 billion dirhams),” it added.

Driss Jettou, president of the Court of Accounts, emphasised the “limited effect” of state funding for investment in general and the financing of sectoral strategies in particular on the overall development and the creation of employment more specifically.

Jettou said that this limited effect “slows the economic machine of the country which lifts the veil on the factors likely to constitute risks on the sustainability of public finances, particularly the high level of public debt and its increasing rate, as well as the problem of state arrears for the benefit of certain public institutions and private companies.”

The King called for a strong boost to school enrolment programmes and the need to combat school drop-out, besides the reshaping of the health system which is characterized by “blatant disparities and poor management.”

EL Mehdi Fakir, analyst and Managing Director of AdValue Audit and Consulting Group, said that the King focused this time on the qualitative aspect of the health and education sectors.

“Public hospitals are there but they are not meeting people’s demands. The quality of services is poor, which helped boost the private health sector,” said Fakir.

“We need the right person in the right place. Poor management comes from those who do not have the required skills,” he said.

The King urged political parties to attract new elites and mobilise young people, who are aware of the current problems, to engage in political life.

He also called on the parties to find the ways and means to revitalise their work methods in order to respond on a permanent basis to the citizens’ demands.

Fakir said the real problem comes from within political parties which have repeatedly failed to convince the electorate.

“Political parties need to change their customs before it’s too late. There are some parties that are there from father to son, which affects their credibility,” warned Fakir.