The International Monetary Fund (IMF) agreed to provide Morocco a USD 415 million loan on Wednesday under its Resilience and Sustainability Facility (RSF) to support the Kingdom’s transition toward a green and more resilient economy, Morocco’s News Agency (MAP) reported.
The IMF’s Executive Board had previously approved a USD 1.3 billion loan for Morocco under its Resilience and Sustainability Facility in 2023.
The new loan will help bolster Morocco’s ability to adapt to climate risks, such as natural disasters and water scarcity, in light of increasing floods around the Mediterranean.
In a press release, the IMF Deputy Managing Director and Acting Board Chairman Kenji Okamura told MAP that Morocco has been making “steady progress in enhancing resilience to climate change.”
Okamura also highlighted Morocco’s “robust” results achieved in accordance with the RSF framework, underscoring the Kingdom’s “steady progress on strengthening Morocco’s resilience to climate change, underpinned by very strong fundamentals and policy frameworks and a sustained track record of effective policy implementation. “
Morocco has been implementing better strategies to deal with frequent droughts by making “significant investments in water infrastructure to address water shortages and demand management reforms,” according to Okamura. He also highlighted Morocco’s economic resilience despite the droughts that have affected Morocco in 2024, impacting agriculture and employment.
The IMF noted that Morocco will further improve resilience if it increases private sector involvement in all sectors. Okamura said that Morocco should focus its efforts “on further liberalizing the electricity sector, greening the tax system, addressing the risks that climate change pose to the stability of the fiscal and financial systems, and protecting the country’s diminishing groundwater resources.”
The press release stated that inflationary pressures have subsided, and the budget deficit is “2024 budget target, with increased current spending offset by stronger-than-expected revenues.
Strong revenues from tourism, exports of goods, and remittances have kept the current account deficit at low levels.”
The IMF also highlighted Morocco’s “strong revenues from tourism, exports of goods, and remittances have kept the current account deficit at low levels.”