Morocco: IMF and World Bank bail out Akhannouch government
The news of a bail out might be welcomed by rural Moroccans who are suffering from high food costs, but equally by the middle classes who are miffed that they have to pay sky high import duty on minor e-commerce purchases – if of course the government uses the money wisely
The International Monetary Fund (IMF) has responded to Morocco’s PM Aziz Akhannouch, offering his government a $5 billion Flexible Credit Line, designed for crisis prevention purposes, and the World Bank approving a $450 million loan, reports alarab.co.uk.
The Fund announced that the Executive Board had approved, on April 3rd , a two-year agreement with Morocco under the Flexible Credit Line at a value equivalent to 3.7262 billion Special Drawing Rights, or $5 billion, or the equivalent of 417 percent of its membership quota.
Morocco’s PM Akhannouch sought a $5 billion loan from the International Monetary Fund to hedge against shocks weakening its foreign exchange reserve balance, which Bank Al-Maghrib expects to reach $35 billion by the end of the year.
The government has been showing signs for a number of months of its institutions being cash-strapped. Moroccans noticed in the last year that Rabat was resorting to desperate measures to extract cash from wherever it could, with the most noticeable being the exemption of import duties imposed on small items bought on e-commerce sites of us to 1000 dhms being recently scrapped. Recently, a contributor to Maghrebi ordered a car part from Germany which only cost 25 euros and was required to pay almost 100 % import duty. Food inflation is also a big worry for many working class and rural Moroccans, currently at around 20%
