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AFRICAN DEVELOPMENT BANK
MOROCCO
SOCIAL PROTECTION GOVERNANCE SUPPORT PROGRAMME
(PAGPS)
OSHD DEPARTMENT
June 2016
Translated document
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ABLE OF CONTENTS
1 PROPOSAL ................................................................................................................................1
2 COUNTRY AND PROGRAMME CONTEXT ..........................................................................1
2.1 Government’s Overall Development Strategy and Medium-term Reform Priorities ..................1
2.2 Recent Political, Economic and Social Developments, Prospects, Constraints and Challenges .2
2.3 The Sector and Related National Programmes ............................................................................5
2.4 Status of Bank Group Portfolio Situation ....................................................................................6
3 RATIONALE, MAIN DESIGN ELEMENTS AND SUSTAINABILITY .................................6
3.1 Linkages to the CSP, Assessment of Country Preparedness and Underlying Analytical
Elements ......................................................................................................................................6
3.2 Collaboration and Coordination with other Donors ....................................................................8
3.3 Results and Lessons Learnt from Similar, Previous and Ongoing Operations ...........................8
3.4 Linkages with the Bank’s Ongoing Operations ...........................................................................9
3.5 Bank’s Value-added and Comparative Advantages ....................................................................9
3.6 Application of Good Practice Principles on Conditionality ........................................................9
4 PROPOSED PROGRAMME ....................................................................................................10
4.1 Programme Goal and Objective ................................................................................................10
4.2 Programme Components, Operational Policy Objectives and Expected Results ......................10
4.3 Programme Reform Implementation Status ..............................................................................14
4.4 Financing Needs and Financing Arrangements. ........................................................................15
4.5 Programme Beneficiaries ..........................................................................................................16
4.6 Programme Impact on Gender ..................................................................................................16
4.7 Environment and Climate Change ............................................................................................16
5 IMPLEMENTATION, MONITORING AND EVALUATION ...............................................16
5.1 Implementation Arrangements ..................................................................................................16
5.2 Monitoring/Evaluation Arrangements .......................................................................................19
6 LEGAL INSTRUMENT AND AUTHORITY .........................................................................19
6.1 Legal Instrument .......................................................................................................................19
6.2 Conditions Associated with the Bank’s Intervention ................................................................19
6.3 Compliance with Bank Group Policies .....................................................................................20
7 RISK MANAGEMENT ............................................................................................................20
8 RECOMMENDATION.............................................................................................................20
List of Appendices
1 – Letter of Development Policy
2 – Matrix of Measures
3- IMF Press Release
4 – Recent Trend and Projection of Key Economic Indicators, 2010-2018
List of Figures and Tables
Figure 1: Population Covered by Health Insurance
Table 1: Macroeconomic Development
Table 2: Conditions Precedent to Budget Support
Table 3: Key Analytical Works Used
Table 4: Reform Measures Triggering the Disbursement
Table 5: Projected Financing Needs and Sources
Table 6: Risks and Mitigation Measures
i
CURRENCY EQUIVALENTS
May 2016
UA 1 = 13.6354 Moroccan Dirham (MAD)
UA 1 = 1.24294 Euro (EUR)
UA 1 = 1.41733 US dollar (USD)
FISCAL YEAR 1 January – 31 December
ACRONYMS AND ABBREVIATIONS
ACAPS Insurance and Social Welfare Control Authority
AFD French Development Agency
AfDB African Development Bank
AMI Health Insurance for the Self-employed
AMO Compulsory Health Insurance
ANAM National Health Insurance Agency
BSO Budget Support Operation
CFRA Country Fiduciary Risk Assessment
CMB Basic Medical Coverage
CNOPS National Fund for Social Insurance Structures
CNSS National Social Security Fund
CPAR Country Procurement Assessment Report
CSO Civil Society Organization
CSP Country Strategy Paper
CSU Universal Health Coverage
DPRF Directorate of Planning and Financial Resources
EEP Public Establishments and Enterprises
EMF Multifunctional Institutions for Women
EPA Public Administrative Institution
EPS Social Welfare Institution
EN Entraide Nationale (National Mutual Assistance Fund)
EU European Union
FEC Communal Mutual Assistance Fund
GDP Gross Domestic Product
GFP Public Finance Governance
HCP High Commission for Planning
IGF General Inspectorate of Finance
IMF International Monetary Fund
INDH National Human Development Initiative
JICA Japan International Cooperation Agency
LF Finance Act
LOLF Organic Law on the Finance Act
MAD Moroccan dirham
MAGG Department of General Affairs and Governance
MDGs Millennium Development Goal
MEAS Ministry of Employment and Social Affairs
MEF Ministry of Economy and Finance
MENFP Ministry of Education and Vocational Training
MSFFDS Ministry of Solidarity, Women’s Empowerment, Family Affairs and Social
Development
ONDH National Human Development Observatory
PAGPS Social Protection Governance Support Programme
PARAP Public Administration Reform Support Programme
PARGEF Economic and Financial Governance Revitalization Support Programme
PACEM ² Economic Competitiveness Support Programme
PADESFI Financial Sector Development Support Programme
PARSIF Support Programme for the Strengthening of Resilience and Financial Inclusion
ii
PARCOUM Medical Coverage Reform Support Programme
PEFA Public Expenditure and Financial Accountability
RAMED Medical Assistance Scheme
RSU Single Social Register
SGG General Secretariat of the Government
SNIGI Integrated Information Management System
TGR General Treasury of the Kingdom
USD United States Dollar
UNICEF United Nations Children’s Fund
TFPs Technical and Financial Partners
UA Unit of Account
WB World Bank
WHO World Health Organization
iii
PROGRAMME INFORMATION
INSTRUMENT: Sector Budget Support
LOAN INFORMATION
Client Information
BORROWER: Kingdom of Morocco
EXECUTING AGENCY: Ministry of Economy and Finance
Budget Directorate
Financing Plan
Source Amount (UA) Amount (USD) Instrument
AfDB
95 million
134.65 million
Loan
TOTAL COST 95 million 134.65 million
Key AfDB Financing Information
Loan currency USD
Type of interest* Floating base rate with a free fixing option
Base rate (floating) 6-month LIBOR
Contractual margin 60 basis points (bp)
Funding margin The Bank’s borrowing cost relative to six-month
EURIBOR. This margin is reviewed every 1st February
and 1st August.
Commitment fee In case of slippage on the initial disbursement schedule
indicated in the loan agreement, a commission of 25
bps per year shall be applied to undisbursed amounts.
Such commission shall be increased by 25 bps every
six months, up to a maximum of 75 bps per year.
Other Fees None
Tenor 20 years
Grace period 5 years
iv
PROGRAMME IMPLEMENTATION SCHEDULE
No. Task Start End 2016 2017 2018
J A S O N D J F M A M J J A S O N D J F M A M J
8 Board approval 22-Jun-16 9 Loan signature 27-Jun-16 10 Programme implementation 11 Authorization of first disbursement 04-Jul-16 12 1st supervision mission 13 2nd tranche disbursement
conditions
14 Verification measures (2nd instalment)
15 Authorization of 2nd disbursement 16 Mid-term review 17 2nd supervision mission 18 Preparation of the completion
report
v
EXECUTIVE SUMMARY
Programme
Overview
The Social Protection Governance Support Programme (PAGPS) in Morocco is a sector budget
support of USD 134.65 million (i.e. UA 95 million, May 2016 rate) to the Government of
Morocco. It seeks to improve the social protection of Moroccan citizens by: (i) strengthening
the social protection governance mechanism and ensuring optimum usage of resources; and,
(ii) expanding social protection coverage and improving the quality of services. In particular,
it will create the legislative and regulatory framework for improved social protection, and
support Moroccan government initiatives through sector policy dialogue in coordination with
the Kingdom’s other development partners.
Programme
Outputs
Ultimately, the programme will further reduce poverty and curb social disparities by improving
and ensuring more equitable access to social protection services as well as more efficient and
sustainable social protection. Specifically, PAGPS will help the Moroccan Government to: (i)
strengthen the institutional mechanism for social protection; (ii) enhance accountability and
evidence-based decision-making; (iii) enhance the efficiency of social spending; (iv) expand
the coverage of high-impact social protection programmes; and (v) improve the quality of
social protection services.
Needs
Assessment
The programme will help the Moroccan Government to pursue and develop its social protection
reform. Although national social spending is substantial (53% of the State budget in 2014), the
approach adopted is highly fragmented, thus generating inefficiencies and undermining any
reduction in social disparities. For instance, poverty remains a predominantly rural
phenomenon in Morocco (8.95% compared to 1.1% in urban areas in 2014). The same applies
to vulnerability, which stands at 18.4%, compared to 6.9% in 2014. Inequalities particularly
affect women. Hence, rural women are more vulnerable to the paucity of health care; have a
lower labour force penetration ratio of 25.1% in 2013 compared to 73% for men; and are
victims of violence (almost 63% of them).
Bank’s Value-
added
As regards budget support, the Bank is a privileged partner of Morocco, thanks to its broad-
based involvement in reform programmes to improve public finance management, the financial
sector, economic competitiveness, training-employment matching, agricultural sector
performance or the more specific context of health insurance coverage. The Bank has also
financed the health sector financing strategy, as well as many social welfare programs in
several African countries. Its comparative advantage therefore resides in its expertise in fields
relating to PAGPS and its knowledge of the Moroccan context. Hence, the Bank has
accumulated experience that enables it to maintain sustained sector policy dialogue with
Moroccan authorities. Lastly, since the programme affects retirement-related issues currently
being studied by the Bank under the Support Programme for the Strengthening of Resilience
and Financial Inclusion (PARSIF), it will help to develop synergies between the social
approach and the financial approach, as well as sector policy dialogue that is integrated and
consequently more efficient.
Contribution to
Gender
Equality
Women will reap highly substantial benefits from the programme. Since their situation is more
vulnerable than that of men, they will benefit more from the programme. Women are the lead
beneficiaries under the Medical Assistance Scheme Programme (RAMED), which is based on
national social assistance and solidarity designed to help the underprivileged, especially
women who account for 53% of persons registered under RAMED. Furthermore, the
programme will specifically develop tools that protect Moroccan women against violence and
provide greater support to women with disabilities and generally women in distress, through
identification and local support under a counselling and guidance system. Moreover, young
girls will receive improved schooling aid that will facilitate their access to education.
vi
RESULTS-BASED LOGICAL FRAMEWORK
VII. Preliminary Results-based Logical Framework:
Country and Project Title: Morocco - Social Protection Governance Support Programme Project Goal: Improve social protection for Moroccans, especially for women and the most vulnerable.
PERFORMANCE INDICATORS MEANS OF VERIFICATION
RISKS/ MITIGATION MEASURES
Indicator (including ISCs) Baseline Situation Target
IMP
AC
T
Impact: Improvement of the living conditions of the Moroccan people
Gender Development Index* Net primary enrolment ratio in rural areas
0.828 (2013)
Boys 95.5% Girls 94.4%
0.950 (2025)
Boys 99.6% Girls 99.2%
UNDP Database Ministry of Education
Outcome 1: Improved and more equitable access to social protection services
Number of people enrolled in AMI
0 (2015)
250,000 including 10%** women (2018)
(liberal professions first of all)
CNSS data and reports
Risk 1: Ability and willingness of the Government to drive the reforms Mitigation measure 1: Constant attention from the Government, which has demonstrated its resolve through ongoing actions. Furthermore, the programme includes measures for strengthening evidence-based decision-making that will facilitate discussions among stakeholders. Risk 2: Low quality of social protection services and sustainability of resources to fund reforms Mitigation measure 2: Sustained financial effort of the Government and budget support from the Bank. Risk 3: Fragmentation of social protection mechanisms. Mitigation measure 3: The coordination role played by MEF and the related committee will enhance coordination. Risk 4: The law on AMI is rejected by Parliament. Mitigation measure 4: This law is the culmination of a long consultative process.
Coverage of the main social assistance systems RAMED: % of the population that is eligible School aid: % of pupils in the eligible age group
2015: -RAMED: 100% (53% women) Overall: -Boarding facilities: 1.8% -School meals: 27% -Transport assistance: 1.9% Girls: -Boarding facilities: 0.74% -School meals: 10.4% -Transport assistance: 0.76%
2018: -RAMED: 100% (maintained) (53% women) Overall: -Boarding facilities: 2.2% -School meals: 27.3% -Transport assistance: 3% Girls: -Boarding facilities: 1.14% -School meals: 11.5 % -Transport assistance: 1.46%
ANAM MEN
Outcome 2: Social protection is more efficient and sustainable
Share of social expenditure in the State budget
50% (2016) 50% (2018)
General budget, communal expenditures, special allocation accounts
Average annual consumption per beneficiary of RAMED (data from the 2013 actuarial study)
MAD 617 (2015)
MAD 617 (2018)
vii
OU
TPU
TS
Component 1: Strengthen the social protection governance mechanism and optimize the use of resources
1.1. Social protection governance mechanisms are strengthened
Scenarios for the independent management of RAMED are identified and evaluated
N/A
The scenarios are reviewed by the Steering Committee
Agenda and minutes of the Steering Committee (transmission to the Bank)
Risk 5: Elections in October 2016. Mitigation measure 5: The identification of programme measures took this scenario into account. Moreover, changes of Government in Morocco hardly affect commitments taken or call structural reforms into question.
A recommendation note on ANAM reform is prepared and evaluated.
N/A The recommendations are reviewed by the Steering Committee
Agenda and minutes of the Steering Committee (transmission to the Bank)
1.2 Accountability is enhanced
Studies scheduled by the Government are implemented
N/A The following databases and studies are available or underway: (i) household panel survey; (ii) assessment of INDH impact; (iii) database on health in the workplace; (iv) RAMED component of the Integrated Information Management System (SNIGI). Studies (i) and (ii) are made public.
ONDH report Ministry of Employment ANAM report
1.3 Social spending efficiency is improved
Additional volume of flour de-subsidized
N/A 2 million quintals (2018) MAGG Database
Component 2: Expansion of social protection coverage and improvement of the quality of services
2.1. AMO coverage is expanded and the protection of women is enhanced
Number of eligible students enrolled in the AMO students scheme
28,000 [2016] (56 % of women)
288,000 [2017]*** (61 % of women)
ANAM and CNOPS reports
Number of ministries with gender-sensitive programmes and indicators
3 (2015)
At least 5 (2017)
Budget statements of sector ministries
2.3 Strategic measures have been taken to improve the quality of social protection services
The bill on social workers is tabled before the Governing Council
N/A The Bill is considered by the Governing Council.
Letter of transmission of the bill
KEY
AC
TIV
ITIE
S
COMPONENTS RESOURCES
Component 1: Strengthen the social protection governance mechanism and optimize the use of resources Component 2: Expand social protection coverage and improve the quality of services
AfDB: USD 134.65 million (UA 95 million)
* The gender development index is based on three indicators adjusted to reflect disparities between men and women in three areas, namely: duration of life measured through life expectancy at birth; the level of education measured by adding up the adult literacy rate (two-thirds)
with the combined enrolment ratio for all levels of education (one-third); and standard of living measured by real GDP per capita (in PPP
terms). http://hdr.undp.org/en/composite/GDI ** Percentage of women estimated by an EU study. This percentage refers to women enrolled directly and does not include women who
benefit from AMI as dependents. *** Estimates.
1
MANAGEMENT’S REPORT AND RECOMMENDATIONS TO THE BOARD OF
DIRECTORS CONCERNING A PROPOSAL TO GRANT A LOAN TO THE KINGDOM
OF MOROCCO, TO FINANCE THE SOCIAL PROTECTION GOVERNANCE
SUPPORT PROGRAMME
1 PROPOSAL
1.1 Management hereby submits the following proposal and recommendation to grant
a loan of USD 134.65 million to the Kingdom of Morocco to finance the Social Protection
Governance Support Programme (PAGPS). PAGPS is a sector budget support designed in
collaboration and coordination with the Government of Morocco and its main development
partners in the relevant sectors. It builds on previous AfDB support in the area of health insurance
and seeks to expand the scope of Bank operations to social protection as a whole.
1.2 The programme is aligned on the Bank’s CSP 2012-2016 for Morocco and on the
country’s development programme. It will help to strengthen governance and social inclusion,
which fall under Pillar I of the CSP (2012-2016) for Morocco. Furthermore, the programme will
facilitate the implementation of the governance priority under the Ten-Year Strategy (2013-2022)
and its overall goal of inclusive growth, as well as the Bank’s five priorities (the “High 5s”),
especially the priority to improve the quality of life for the people of Africa. The programme is
also consistent with the objectives of the 2014-2018 Human Capital Strategy on the establishment
of inclusive social services and systems, and those of the Bank’s Gender Strategy. PAGPS is
based on Morocco’s sector strategies in the relevant areas, including the Social Pole Strategy of
the Ministry of Solidarity, Women, Family and Social Development (MSFFDS), the 2012-2016
Health Sector Strategy and Education Vision 2030. It also takes into account Government’s
current efforts to formulate an integrated social protection vision and policy.
1.3 The programme will support the implementation of Moroccan Government
initiatives for more effective social protection. PAGPS is a contribution to the improvement of
the living conditions of the Moroccan people and was designed through a participatory approach.
It focuses on: (i) strengthening the social protection governance mechanism and ensuring the
optimum use of resources; and (ii) expanding social protection coverage and improving the
quality of services. Specifically, the programme will further reduce poverty and curb
geographical and social disparities through improved access to social protection services and
more efficient and sustainable social protection. It will benefit the most vulnerable Moroccans,
especially women, by implementing reforms and developing the regulatory and legislative
frameworks that they need.
2 COUNTRY AND PROGRAMME CONTEXT
2.1 Government’s Overall Development Strategy and Medium-term Reform Priorities
2.1.1 Morocco is successfully consolidating its national development model for inclusive
growth. It enjoys political stability and has embarked on a broad reform drive to ensure that its
regulatory and institutional frameworks meet its modernization requirements as enshrined in the
2011 Constitution. This process is implemented in the area of social protection (developing
access to basic social services) by promoting the development of regional and local authorities
(advanced regionalization) and public finance modernization to improve governance and
accountability. Furthermore, Morocco is gradually transforming its productive fabric to boost the
resilience of its economy, raise household income levels and develop better quality jobs. These
efforts have yielded steady progress, reflected in Morocco's human development index trends
(the index rose from 0.456 on average over the 1990-1999 period to 0.617 in 2013), the reduction
2
in the poverty rate (6.2% in 2011 compared to 15.3 in 20011) and the recovery of the major
macroeconomic balances characterized by the gradual decline of the budget deficit (-4.3% of
GDP in 2015 and -3% in 20172), a reduction in the balance of payments deficit (-5.7% in 2014
and -2.7% in 2015) and an encouraging - albeit volatile - GDP growth rate (2.4% in 2014 and
4.6% in 2015).
2.1.2 Social protection is a major concern to the Moroccan Government. Although its
social spending is estimated at 50% of the State budget, the approach adopted remains highly
fragmented, giving rise to inefficiencies. According to a study conducted in 2015-2016 by the
Ministry of General Affairs and Governance (MAGG) with UNICEF support,3 Morocco has over
140 insurance or social assistance programmes, ranging from universal transfers (flour, sugar,
and butane gas subsidies) to protective mechanisms targeting specific population groups, such as
Compulsory Medical Insurance (AMO) for wage earners or the Medical Assistance Scheme4
(RAMED). These last two programmes are among the initiatives that generate the greatest
impact, because they cover 34% and 28% of the population, respectively. They are followed by
social assistance mechanisms such as the National Human Development Initiative (INDH),
which, since its launch in 2005, has co-financed approximately 38,400 projects and 8,300
activities for a total of MAD 29.1 billion5 for the benefit of 9.7 million Moroccans, including
over 4.1 million women. The INDH has also implemented projects to cut down the school
dropout rate, with half a million girls as beneficiaries. Furthermore, Morocco has special
Treasury accounts such as the Social Cohesion Support Fund and the Rural and Mountainous
Regions Development Fund that finance the new programme to address territorial and social
disparities in the rural area. Lastly, the Government is carrying on with its Government Equality
Plan ("Ikram"), as well as its actions to combat discrimination and violence against women and
promote their empowerment. These programmes are beginning to curb social inequalities and
improve access to basic services for the most vulnerable.
2.2 Recent Political, Economic and Social Developments, Prospects, Constraints and
Challenges
2.2.1 Political Developments: As a transition country, Morocco enjoyed unalloyed
political stability during 2012-2016. The Constitution was revised by referendum in July 2011
to consolidate multiparty democracy and individual freedoms. The legislative elections of
November 2011 yielded victory to the Justice and Development Party (PJD), whose Secretary
General was appointed to head the Government. A first coalition government was formed in
January 2012 and a second in October 2013 following the withdrawal of the Istiqlal Party from
the governing coalition. The parliamentary elections of October 2016 will determine the
composition of the next Government. The regional and communal elections of September
2015 were an important step towards implementing the devolution and decentralisation
process enshrined in the 2011 Constitution. These elections lend force to the new organic laws
relating to regions, provinces, prefectures and municipalities, and which allow citizens to be more
involved in the management of local affairs. The regions demarcated in March 2015 and other
local government authorities are indeed endowed with own financial resources and State
allocations.
1 These are the figures for relative poverty, representing USD 2.15 per person per day in Morocco. It declined from 7.6% to 3.5% in urban
areas and from 22% to 10% in rural areas. Meanwhile, vulnerability declined by 40% over the same period (from 22.8% in 2001 to 13.3% in 2011). In 2011, 0.1% of Moroccans in urban areas and 0.5% in rural areas were living on less than USD 1 per day.
2 2017 figures are from AfDB. 3 UNICEF: Integrated Social Protection Vision in Morocco, Part 1 on mapping, November 2015. 4 This scheme specifically covers female household heads, single mothers and persons with disabilities who meet the eligibility criteria set out
in the targeting method (available means measured through the Proxy Means Test method). RAMED also covers inmates in orphanages,
hospices or rehabilitation institutions and any public or private institution hosting abandoned children and the homeless. 5 Including direct funding of 17.2 billion from INDH.
3
2.2.2 Economic Developments6
2.2.2.1 From 2008 to 2012, Morocco implemented a counter-cyclical fiscal policy geared
towards reviving its economy in a context plagued by the international financial crisis and
the high cost of commodities (including energy). Nevertheless, this policy, which helped to
sustain growth, led to a deterioration of macroeconomic indicators and, indeed, reached its limits.
Consequently, since 2012, Morocco has embarked on a policy of correcting these balances by
targeting two objectives: (i) reduce operating costs and improve the efficiency of the State’s
social action in order to create the necessary fiscal space; and (ii) continue with key investments
and reforms in order to improve the business climate and trigger a transformation of the economic
model.
2.2.2.2 Morocco made considerable progress in consolidating its macroeconomic balances
during the 2013-2016 period. In public finance, the country recorded a net reduction in its
budget deficit (from -7.3% of GDP in 2012 to -3.5% as projected for 20167) following cuts in
public spending, including operating expenditure which declined from 29.9% to 26.4% of GDP
in 2015. This stemmed from: (i) a reduction of the budget allocated to subsidies (particularly
energy subsidies) from 6.2% of GDP in 2012 to 1.4% in 2015; (ii) the decline in wage costs by
approximately 0.4% of GDP; and (iii) the non-postponement of investments. These measures
helped to generated additional revenue, streamline State spending and improve investment
efficiency. Thanks to these efforts, Morocco secured a second Precautionary and Liquidity Line
from the IMF in August 2014.
2.2.2.3 Efforts also led to a reduction in the current accounts deficit from 9.2% of GDP in
2012 to -2% in 2015. This stemmed primarily from a decline in imports (-3.5%) as Morocco
benefited from the fall in oil prices. However, it also stemmed from the export sector
development policy (development industries related to Morocco’s global trades) which is
beginning to bear fruit, with the automobile sector becoming the lead exporter in 2015. Foreign
exchange reserves rose from less than 4 months of imports in 2013 to over 6.5 months at the end
of 2015.
2.2.2.4 During 2012-2016, inflation remained low at 1.3% on average, despite the phasing
out of energy subsidies in January 2014. The Moroccan Central Bank pursued a cautious, albeit
accommodating, monetary policy focused on inflation control, while boosting demand which is
the principal engine of economic growth.
2.2.2.5 The Treasury debt reached approximately 63.4% of GDP in 2015, but remains
sustainable in the medium term according to the IMF analysis of February 2016. Although
the Treasury debt has continued its upward trend begun in 2010 (63.2% of GDP in 2014
compared to 62.3% in 2013 and 49% in 2010), it should start declining from 2017. Hence, the
debt ratio is expected to decline from 64.4% in 2016 to 62.1% in 2019. Efforts made in the last
ten years in terms of fiscal consolidation and active debt management have yielded concrete
results: the State has continued to finance itself at relatively low rates and to extend the debt
maturity. The average cost of debt has decreased (from 5.1% in 2010 to 4.6% in 2013 and 4.4%
in 2014), while average maturity has increased (from 5.7 years to 5.5 years and 6.5 years,
respectively).
2.2.2.6 Nevertheless, Morocco's growth remains constantly volatile and dependent on
agricultural sector performance. After growing 4.5% in 2013, the agricultural sector fell to
2.4% in 2014. Similarly, after growing by 4.5% in 2015, thanks to a bumper grain harvest, this
sector is expected to fall below 2% in 2016. Although non-agricultural activities continued to
6 AfDB figures. 7 Source: AfDB. See Annex 4.
4
grow during 2012-2015, driven by the excellent performance of tertiary activities and some
secondary sector branches including mining and Morocco's new professions (automobile and
electronics), the pace of growth remains insufficient and is declining.
Table 1-Macroeconomic development
2014 2015 (e) 2016 (p) 2017 (p)
GDP growth 2.4 4.5 1.8 3.5
Real GDP growth rate per capita 1.0 3.2 0.5 2.3
Inflation 0.4 1.8 1.4 1.6
Budget balance (% of GDP) -4.9 -4.3 -3.5 -3.0
Current account (% of GDP) -5.7 -2.7 -0.7 -0.9
Source: AEO 2016 (see Annex 4).
2.2.3 Social Developments
2.2.3.1 Despite the efforts and progress made, the country still has significant social and
spatial disparities, and human development remains below expectations. Poverty, which
declined from 15.3% in 2001 to 6.2% in 2007, remains a predominantly rural phenomenon in
Morocco (8.95% compared to 1.1% in urban areas in 2014). The same applies to vulnerability at
18.4%, compared to 6.9% in 2014. Unemployment, which generally inched down from 10.8% in
2004 to 9.9% in 2014, disproportionately hits the youth, affecting 20% of those aged 15-24 years
nationwide and up to 38.1% of urban youth. The unemployment rate among higher education
graduates is 20% and only 22.7% of the female labour force have a job, which is often of poor
quality. Women and young graduates are particularly affected, especially higher education
graduates. Lastly, access to primary education remains difficult in "areas of shortage" identified
by the Government and the country still has a low transition rate from primary to secondary
education, with a national average of 62% and only 23.6% for girls in rural areas.
2.2.3.2 Women remain exposed to a situation of fragility, due to gender inequalities.
Hence, the Health in Figures report published by the Ministry of Health in 2014 shows that rural
women are more exposed to health care shortage, since only 55% of them are assisted by skilled
attendants during childbirth, compared with 92.1% of urban women. Similarly, only 55% of
women get four prenatal consultations. It follows that rural women are more exposed to the risk
of maternal mortality than urban women (respectively 148 and 73 deaths per 100,000 live births).
A rural woman is 4.3 times more likely to be illiterate than an urban man. Women record a low
remunerated economic activity rate (25.1% in 2013 compared with 73% for men), with exposure
to precarious employment, especially among home workers, and limited participation in
decision-making. Lastly, according to a survey conducted by the High Commission for Planning
(HCP) in 2011, 62.8% of women aged 18 to 64 years, or almost 6 million women, are subjected
to acts of violence.
2.2.3.3 Social protection in Morocco is plagued by problems of coverage and
fragmentation that undermine its efficiency and efficacy. These coverage problems are
particularly evident in rural areas and for certain at-risk
groups such as self-employed persons, women and girls in
difficult situations, and persons with disabilities. For
example, despite the overall success of current initiatives
to increase health coverage, most self-employed persons
are not covered by AMO and RAMED, and only 62% of
the population is covered by an insurance or health
assistance scheme (Figure 1). Besides, the social protection
mechanism is highly fragmented, with 140 different
programmes and approximately 50 stakeholders. The
effects of this fragmentation are aggravated by the lack of
Figure 1. Population covered for health
5
coordination among social protection stakeholders, the lack of clarity in their respective mandates
and the absence of a unique targeting system. The result is duplication and exclusion from social
protection coverage. Lastly, it is difficult to monitor and evaluate social protection safety nets
and to precisely measure their effects on beneficiaries mainly because the available data is
incomplete.
2.2.3.4. The State is making substantial financial efforts for the social sectors, which
account for 50% of its budget. Thus, the budget of the Ministry of Health increased from 3.8%
of the State budget in 2005 to 4.2% in 2015, although it remains short of the WHO standard.
Efforts have been made to ensure a sustainable financing of the sector. To improve public
spending efficiency, the Ministry of Health developed a health financing strategy, designed with
Bank support. Besides, the Ministry of Economy and Finance has established a Social Cohesion
Fund to generate resources for social programmes. More than half of the resources of this Fund
were allocated to RAMED in 2014 and supplementary annual financing of MAD 1 billion has
been allocated to the Ministry of Health over the next five years, thanks to de-subsidization of
basic necessities8. However, financing the Basic Medical Coverage (CMB) reform and ensuring
the financial sustainability of RAMED remain significant challenges for the Kingdom. It is
estimated that Universal Health Coverage (CSU) for a basket of basic care could be under-funded
by MAD 27 billion in 2030.9
2.2.3.5 Significant efforts are also being made within the framework of public finance
reform to improve efficiency in the use of resources. For example, the Head of Government
issued a circular, dated 12 June 2014, on implementation of the performance-based budget
approach. Nine ministries, including the Ministry of Health, have already developed programme
budgets and performance projects within the context of preparation of the 2015 and 2016 finance
bills, and 7 additional ministries are using programme budgets within the framework of the 2016
Finance Act. A programme contract system should be generalized from 2018.
2.2.3.6 Moroccan authorities agree on the need and urgency of social protection reform.
The objective of PAGPS is to support the Government in such a reform. The Bank is also
studying the PARSIF programme, which focuses on financial stability and inclusion, especially
in the insurance and pension sectors, and which will, in particular, support parametric10 pension
reform.
2.3 The Sector and Related National Programmes
Combating social inequalities is the core target of Morocco's development model. It
constitutes the foundation of the programme and is implemented through the sector
strategies of the Moroccan Government. The Government is stepping up efforts to introduce
social protection safety nets that are more efficient and efficacious, in a bid to build an integrated
economy that curbs disparities. There is broad consensus on the need to reform the social safety
nets and the Government has initiated broad-based analysis and consultations on these issues
with a view to developing a vision and an integrated social protection policy. For the time being,
social protection is provided through sector policies. The 2012-2016 Health Sector Strategy
comprises seven pillars, among which the development and control of strategic health resources,
including RAMED, as well as improvement of health system governance. It is implemented
through the AMO 2014-2018 roadmap, which seeks to expand health insurance to self-employed
workers and students by gradually enrolling them in existing insurance schemes, among others.
The MSFFDS Social Pole Strategy is based on four strategic pillars to ensure sustainable and
equitable social development for the country, and specifically provides for the strengthening of
8 De-subsidization: withdrawal of State subsidies. 9 Source: Health Financing Strategy. 10 Retirement age, basis and rate of contribution, and minimal pension.
6
local services. Education Vision 2030 is expected to create a more efficient and fairer education
system through four intervention areas, namely: (i) the human element; (ii) governance; (iii)
pedagogy; and (iv) number of schools. Apart from these sector strategies, there are also major
national poverty and inequalities reduction programmes, for instance the INDH.
2.4 Status of Bank Group Portfolio
The Bank is one of Morocco’s leading development partners.11 Its active portfolio has 32
operations worth over UA 1.51 billion, including UA 1.5 billion as loans financing 14 operations.
The portfolio covers seven areas including energy, which accounts for 45.5% of commitments,
with a high concentration in infrastructure (96%). Other sectors include transport (21%); water
and sanitation (13.1%); agriculture (8.1%); the private sector (9.2%); multi-sector operations
(4.1%); and the social sector (0.1%). The portfolio also includes a non-sovereign operation (an
equity participation in the Argan Infrastructure Fund) for a total of EUR 15 million. The overall
portfolio performance is satisfactory, with a total score of 2.49 on 3 in March 2016. This score
has remained stable since 2012.
3 RATIONALE, MAIN DESIGN ELEMENTS AND SUSTAINABILITY
3.1 Linkages to the CSP, Assessment of Country Preparedness and Underlying Analytical
Elements
3.1.1 Linkages to the CSP: The programme will help to strengthen the 'Governance'
pillar as defined in the CSP Mid-term Review (2012-2016) for Morocco. Under this pillar,
lending operations are aimed at improving the efficiency of the State’s social action by supporting
reforms that promote expenditure rationalization, stakeholder coordination and better beneficiary
targeting. PAGPS is part of the Bank’s lending programme as adopted during the CSP mid-term
review. It is consistent with the Bank’s priority to improve the quality of life for the people of
Africa. It will contribute to the implementation of governance and inclusive growth - respectively
the priority and goal of the 2013-2022 strategy. Lastly, the programme is consistent with the
objectives of the Bank’s Human Capital Strategy 2014-2018 on the establishment of inclusive
social systems, and those of the Gender Strategy. Concerning the latter, the programme focuses
on gender-oriented governance, taking violence against women into account. Public finance
reform also highlights the principle of gender-sensitivity promoted by the new Organic Law on
the Finance Act (LOLF), through programme budgets, programme-contracts and the
performance projects system being introduced in sector ministries.
3.1.2 Assessment of Country Preparedness and Compliance to the Bank’s Safeguards
Policy: Morocco fulfils all conditions of eligibility for a budget support operation (Table 2). In
2015, its overall score (average from A to E) was 4.09, placing it in the 13th position on the
continent. With this score, the country is in the second quintile. Fitch Ratings confirmed the risk
rating for Morocco’s long-term issue in foreign and local currency at 'BBB-' and 'BBB'
respectively, with a stable outlook.
11 Apart from the Bank, Morocco’s major financial partners are the World Bank and France, which each provide approximately 11% of
development aid, behind the EU which accounts for 33.5%.
7
Table 2: Conditions Precedent to Sector Budget Support Conditions
Precedent
Remarks
Government
commitment to
poverty reduction
Morocco has made giant strides in poverty reduction and in access to education, healthcare and health services,
although spatial disparities remain a source of fragility. The national poverty rate declined from 15.3% to 6.2%
between 2001 and 2007. However, this trend masks significant regional disparities. Poverty remains a predominantly rural phenomenon in Morocco (14.4% compared to 4.8% in urban areas).
Macroeconomic
stability Morocco made considerable progress in consolidating its macroeconomic balances during the 2013-2016 period.
From the public finance standpoint, Morocco recorded a net reduction of its budget deficit (from -7.3% of GDP in
2012 to -3.5% as projected for 2016) following cuts in public spending, including operating expenditure which declined from 29.9% to 26.4% of GDP in 2015. This stemmed from: (i) a reduction of the budget allocated to
subsidies (particularly energy subsidies) from 6.2% of GDP in 2012 to 1.4% in 2015; (ii) the decline in wage costs
by approximately 0.4% of GDP; and (iii) the non-postponement of investments. These measures helped to raise additional revenue, streamline State spending and improve investment efficiency. Thanks to these efforts, Morocco
secured a second Precautionary and Liquidity Line from the IMF in August 2014.
Satisfactory fiduciary risk
assessment
Recent Country Fiduciary Risk Assessments and other PFM diagnoses for Morocco have concluded that the overall
country fiduciary risk is moderate generally due to satisfactory public finance management processes (three-year
budget programming and preparation, monitoring of budget implementation including procurements, management
accounting and reporting, internal audit, review and external audit). However, as part of the change in its PFM, Morocco initiated a broad range of reforms arising from the Organic Law on the Finance Act No. 130 - 13
promulgated on 2 June 2015. This entails: (i) preparing a budget that is more readable and performance-oriented; (ii)
preparing a budget and State accounts that are more transparent and accurate; and (iii) conducting a more thorough and documented parliamentary control. Furthermore, the results of documentary reviews indicate that the risks
associated with the management of fund flows are low at the level of Bank Al Maghrib and the Kingdom’s General
Treasury.
Political stability
As a transition country, Morocco enjoyed unalloyed political stability during 2012-2016. The Constitution was revised by referendum in July 2011 to consolidate multiparty democracy and individual freedoms. The legislative
elections of November 2011 yielded victory to the Justice and Development Party, whose Secretary General was
appointed to head the Government. A first coalition government was formed in January 2012 and a second in October 2013 following the withdrawal of the Istiqlal Party from the governing coalition. The parliamentary elections of
October 2016 will determine the composition of the next Government.
Harmonization Morocco enjoys a strong partnership with donors, who assist it mainly through sector budget support. The social
protection, education and health sectors targeted by PAGPS are the subject of sector coordination among development partners.
3.1.3 Studies and Analytical Bases: PAGPS review benefited from analyses conducted
by the Government and its partners, including the Bank. The main studies are presented in
Table 3 below. Moreover, several technical assistance operations have been programmed by
TFPs or are underway. An example is EU support under its CMB program, which includes
studies that directly target PAGPS measures on ANAM, regionalization and the management of
RAMED.
Table 3: Main Analytical Studies Conducted
Study Entity in
Charge
Contribution
Growth diagnosis (2015) AfDB
Office of the
Prime
Minister and
MCC
Identifies human capital as one of the two major constraints
to Morocco’s development, and highlights the major existing
disparities in terms of access to basic and social protection
services.
Direct targeting procedures for
poverty and human development
in Morocco (2016)
AfDB Performance analysis of some key programmes and their
impact on poverty. This study also proposes reform options
for improving beneficiary targeting.
Determinants of regional public
policies on health and education in
Morocco: a temporal and
crosscutting analysis (underway)
AfDB Identifies public policies that have had a strong impact on
improving education and health indicators in the regions.
Food subsidies and direct social
aid - towards better targeting of
monetary poverty and deprivation
in Morocco (2014)
AfDB Analyses the performance of food subsidies in Morocco and
their impact on poverty. This study also proposes reform
options for improving beneficiary targeting.
Health financing strategy (2015) AfDB/Ministr
y of Health
PAGPS has picked up some of the recommendations of this
study, especially eligibility to RAMED, moving of the
population from Article 114 to AMO, enrolling self-employed
workers in AMO, and independent management of RAMED.
8
Integrated social protection vision
(2015)
MAGG/UNI
CEF
Mapping of social protection mechanisms in Morocco and
their outcomes.
Targeting and protection social
(2012)
World Bank This study highlights the weaknesses of Morocco’s social
protection mechanism. It recommends the streamlining of
existing programmes; investment in early childhood; and the
development of monitoring/evaluation systems for social
protection programmes.
Reforming Subsidies in Morocco
(2014)
World Bank Analyses the performance of food subsidies in Morocco and
their impact on poverty. This study also proposes reform
options for improving beneficiary targeting.
3.2 Collaboration and Coordination with Other Donors
3.2.1 The programme was designed in consultation with the main social protection
TFPs. This collaboration will continue during the programme implementation. It was
discussed with the EU, which will identify budget support to social protection from May 2016
and plans to align itself with the Bank's programme. This support will be accompanied by
technical assistance, which will be added to current support under the CMB III programme,
which relates to several measures adopted under PAGPS. The Bank will continue its involvement
in sector coordination structures for education, social protection and health, as well as its efforts
to schedule joint missions. In this regard, it should be noted that the health aspects of the appraisal
mission for this programme were conducted jointly with the supervision mission for the EU's
CMB III support. The EU also participated in the PAGPS identification mission but was not able
to participate in subsequent missions because of the constraints it faced and which have forced it
to postpone its schedule (approval in 2017). Discussions were also held with the World Bank,
which is planning to provide support for the Single Social Register (RSU). These consultations
generated a convergence of views on reform priorities.
3.2.2 Activities of development partners in the Country: The social protection sector
enjoys substantial support from development partners, namely: WB (INDH; Health; RSU);
EU (INDH; CMB; Social Protection; Advanced Regionalization; Gender); UNICEF (social
protection mapping; modern preschool standards). A multi-donor group, including AFD, EU and
WB, has developed a health sector strategy support programme (Health Sector SSP) to improve
care. This group, accompanied by JICA, is preparing a support programme for the new education
strategy. The education, health, and social protection thematic groups meet twice a year.
3.2.3 The programme was designed through a participatory approach. In the context of
its collaboration with the Government, the Bank supports Morocco in its dialogue with civil
society organizations (CSOs). The PAGPS appraisal mission held a discussion workshop with a
wide range of CSOs to get their views and recommendations on the programme and assess the
credibility of the Bank’s operations in the field of social protection. Targeting and efficiency
issues have been raised and are considered to be crucial points. It was also noted that civil society
plays a very important role in Morocco’s social protection sector, particularly in managing Social
Protection Institutions (EPS) and building staff capacity in such institutions. MEF conducted
sustained consultations with all institutions concerned with PAGPS, requesting them to prepare
data sheets on each of the measures supported by the programme. These data sheets were
validated during working meetings.
3.3 Results and Lessons Learned from Similar, Previous and Ongoing Operations
The lessons learned from similar, past or ongoing operations in Morocco are factored into
the programme. From 2002 to 2014, the Bank supported the development of social protection
in health through the three phases of the PARCOUM programme, which contributed to the
expansion of basic medical coverage to the marginalized and vulnerable. It also has extensive
experience from other social protection programmes on the continent, as well as budget support
programmes in various fields such as finance, public finance and agriculture (PASFI, PARAP,
PARGEF, PACEM, PADESFI, and the Green Morocco Plan). The lessons from these
9
programmes informed the design of PAGPS, in particular, as regards: (i) the centrality of
governance mechanisms in sector reforms; (ii) the institution of measures aimed at achieving
concrete results on the ground; and (iii) the selection of reform measures that are mature and
achievable within the time frame allotted to programmes. This last point is particularly important
given that legislative elections will be held in October 2016 in Morocco and that the formation
of the new Government could delay reform implementation. More generally, the approach
followed by PAGPS took into account the reform implementation time-limits observed in the
Bank’s previous support operations.
3.4 Linkages with the Bank’s Ongoing Operations
PAGPS complements other Bank operations. It follows preceding CMB support programmes
(PARCOUM I to III) and guarantees the continuity of sector dialogue in key aspects, while
broadening the Bank’s operational scope to the core issues of social protection in Morocco. The
programme also complements the Bank’s ongoing budget support in the financial sector
(PARSIF), which addresses not only the problem of pensioners but strives to strengthen the
governance mechanism in the insurance and social protection sector by creating and
operationalizing the Insurance and Social Protection Control Authority (ACAPS), which is the
independent control authority for the sector, in accordance with international norms and
standards. Therefore, PARSIF’s financial approach and PAGPS’s social approach will
complement each other. Furthermore, in the agricultural sector, the Bank supports the Green
Morocco Plan to upgrade rural areas and reduce inequalities, mainly by supporting young
agricultural entrepreneurs. The Bank’s projects also seek provide access to drinking water in
landlocked areas, thus making it possible to address challenges relating to enrolment ratios and
the development of income-generating activities, both of which are factors that improve women's
status and promote their economic empowerment. Lastly, electricity and transport projects
contribute to the reduction of regional inequalities.
3.5 Bank’s Value-added and Comparative Advantage
3.5.1 With regard to budget support, the Bank is a privileged partner of Morocco, thanks to
its large involvement in reform programmes to improve public finance management, the financial
sector, economic competitiveness, training-employment matching, agricultural sector
performance or the more specific context of health insurance. The Bank also financed the Health
Sector Financing Strategy, which inspired certain programme measures as well as many social
welfare programs in a wide range of countries. Hence, its comparative advantage resides in its
expertise in the relevant PAGPS fields and its knowledge of the Moroccan context. This has
armed the Bank with experience that enables it to maintain sustained sector policy dialogue with
the Moroccan authorities.
3.5.2 PAGPS will enhance the implementation of Bank strategies. Its objectives are
directly consistent with the 2013-2022 strategy and the Bank’s five top priorities, through the
strengthening of sector governance and accountability, as well as the improvement of living
conditions for the Moroccan population. The programme will also contribute to the objectives of
the Human Capital Strategy 2014-2018, by improving the quality of social services and the
establishment of inclusive social and financial systems.
3.6 Application of Good Practice Principles on Conditionality
Reform measures supported by the programme were agreed upon with the Government
based on their strategic importance and feasibility within the programme’s time frame. The
number of disbursement triggers within the programme are limited and were selected in
agreement with the Government based on their maturity and feasibility. These measures were
also selected with due recognition of the centrality of governance mechanisms in the reform
10
process. Lastly, they will lead to coordination of Bank support with that of other partners
involved in the relevant sectors, in particular EU support that is being prepared in the sector.
4 PROPOSED PROGRAMME
4.1 Programme Goal and Objective
4.1.1 PAGPS’s objective is to improve the social protection of Moroccans, especially
women and persons in situations of vulnerability. To attain this objective, the programme
focuses on: (i) strengthening the social protection governance mechanism and ensuring the
optimum use of resources; and, (ii) expanding social protection coverage and improving the
quality of services. The Government is seeking to build an integrated economy that reduces
inequality by stepping up efforts to introduce more efficient and effective social protection safety
nets - efficient in terms of better targeting of the population benefiting from social protection
programmes, and effective in terms of coverage of the needy.
4.1.2 The choice of a budget support operation in two tranches is justified by the
opportunity to support the ongoing reform process through sector policy dialogue, in
complementarity with the programmes of other partners. The programme will ease the
pressure on public resources used to implement social protection reforms.
4.2 Programme Components, Operational Policy Objectives and Expected Outcomes
Component 1 - Strengthen the social protection governance mechanism and optimize the
use of resources
4.2.1. The objective of this component is to make social protection more efficient,
effective and sustainable. This component covers the key issues of social protection governance,
coordination and financing. It has three sub-components aimed respectively at: (i) strengthening
the institutional mechanism for social protection; (ii) strengthening accountability and evidence-
based decision-making; and (iii) improving social spending efficiency.
Sub-component 1.1 - Strengthening the Institutional Framework for Social Protection
4.2.1.1 Problems and Constraints: Morocco's social protection system is fragmented and
characterized by overlap and weaknesses that affect its efficiency and effectiveness.
According to the MAGG study, Morocco has 140 insurance or social assistance programmes,
ranging from subsidies for basic food products and butane gas to the Compulsory Health
Insurance (AMO) and the Medical Assistance Scheme (RAMED). This diversity is plagued by a
lack of integration at the institutional level, since some 50 stakeholders are involved in its
governance, implementation and financing. It is worth noting that there is currently no institution
tasked with the regulation and formulation of an integrated social protection strategy. This
multiplicity creates overlap and gaps in social protection coverage. Furthermore, the current
management of RAMED undermines its sustainability. This situation causes ineffectiveness and
inefficiency, which require the enhancement of coordination and synergies among the various
programmes.
4.2.1.2 Recent measures adopted by the Government: Reform of the social protection
institutional governance mechanism is recognized as a prerequisite to the institution of an
integrated social protection strategy that ensures optimum coverage for Moroccan citizens. This problem should be tackled gradually, starting with the priority issues affecting the social
protection system. The 2014-2018 AMO roadmap provides for reform of CMB and ANAM
governance, as part of an integrated CMB strategy. Hence, ANAM has initiated an analysis of its
11
position, governance and management, while a study on RAMED identifies the options for
establishing a managing body for the Scheme, in lieu of the provisions of Law No. 65-00 which
entrusts RAMED management to ANAM. Moreover, the Government is working to deepen the
notion of health region and enhance the legal environment of the 1500 social protection
institutions operating in Morocco, by amending Law No. 14 - 05 which governs such institutions.
The set objective is to improve the quality of services through specialization of EPSs (in
particular, to better accommodate women and children in difficulty, persons with disability and
the aged), endow them with legal personality, and consolidate their governance and management
tools. Furthermore, a Steering Committee bringing together the various stakeholders of a future
Single Social Registry was set up within the Ministry of Interior to guide the institution of the
RSU. These various studies are underpinned by reflection piloted by MAGG, which aims to
develop an integrated social protection vision and policy in Morocco to improve the current
mechanism.
4.2.1.3 Supported measures and expected outcomes: The Bank's budget support is intended
to back strategic measures to reinforce CMB governance, improve RAMED management and
enhance social assistance coordination. More specifically, it entails accompanying Government
efforts to: (i) amend Law No. 14-05 governing the conditions for opening and managing social
protection institutions; (ii) validate the CMB strategy and action plan; (iii) reform ANAM; (iv)
push ahead with reform on RAMED management; and (v) develop the health regions. The
outcomes expected from these measures should strengthen the capacity of the main social
protection stakeholders to conduct their mission in a more coordinated and effective manner. In
this regard, the programme is also a contribution to the longer-term convergence of initiatives
around the integrated social protection vision and policy being prepared by the Government of
Morocco.
Sub-component 1.2- Reinforcing Accountability and Evidence-based Decision-making
4.2.1.4 Problems and constraints: The analysis of social protection programmes is
constrained by the dispersion and non-consolidation of data. Consequently, it is difficult to
pinpoint problems, monitor programmes and base strategic decisions on objective facts.
4.2.1.5 Recent measures adopted by the Government: The Government has started many
initiatives to improve the availability and quality of information. The institutions
encountered during programme appraisal laid emphasis on the need to have reliable information
to monitor and evaluate social protection programmes and provide a basis for any related
decisions. The Bank learned of the many projects underway in this area, such as an INDH impact
assessment, improvement of the household panel survey methodology to allow for production of
disaggregated data at the regional level, or the establishment, by ANAM, of the Integrated
Information Management System (SNIGI) for RAMED. These developments are consistent with
the emphasis laid on accountability in the Finance Act, in accordance with the new LOLF adopted
in 2015. This Law provides that ministries should build their information systems - including
gender-sensitive data - with a view to developing relevant performance indicators to monitor and
evaluate the impact of programmes put in place and thus justify and assess attendant cost. In
parallel, the Government is also developing mechanisms that promote citizens’ views, similar to
what ANAM has done for health services.
4.2.1.6 Supported measures and expected outcomes: The Bank’s budget support seeks to
back strategic measures that: (i) consolidate the facts/statistical base; (ii) enhance
monitoring and evaluation; and (iii) give greater consideration to users’ views. This will
entail supporting ONDH regarding: (i) the RAMED survey on care sustainability, targeting and
perception; (ii) the 2017 household panel survey; (iii) the INDH impact assessment; (iv) the
establishment of the RAMED component of SNIGI; and (v) the strengthening of ANAM’s
“Hotline” and “Front Office” information and complaint services. These measures will increase
12
understanding of the limitations of existing social protection mechanisms and their results for
vulnerable communities. This will enhance the design of social protection programmes and
strategies, promote accountability to Moroccan citizens, and inform the future integrated social
protection policy.
Sub-component 1.3- Enhancing Social Spending Efficiency
4.2.1.7 Problems and constraints related to social protection efficiency and sustainability.
The problem of the burden of compensation, which has long affected public finance balance has
been largely mitigated recently, through a reduction of budget allocations from MAD 54.9 billion
in 2012 to MAD 15.6 billion under the 2016 Finance Act and a subsequent adjustment of the
budget deficit. However, further efforts are needed in this area and in other social protection
sectors. The current inefficiency within the system also stems from the diversity of mechanisms
targeting social protection beneficiaries, be they geographic or based on the characteristics of
households. To address the weaknesses of the purely geographic targeting procedure, the Bank
(2016), WB (2012) and the IMF (2014) recommend that Moroccan authorities adopt programmes
that target the neediest persons, relying on the "Proxy Mean Tests” method.12 To overcome these
challenges, the 2014 report of the Court of Auditors recommends to further target social
assistance beneficiaries based on criteria set in consultation with the various parties concerned.
4.2.1.8 Recent measures adopted by the Government: The Moroccan government is keen
on improving the performance of existing social protection systems. Hence, MENFP is
working on rationalizing the education aid provided in the form of school meals, boarding
facilities, transport and the “one million school bags initiative”. This effort is expected to yield a
ministerial memorandum that provides for consideration of regional specificities and views
expressed by the students, strengthening of the partnership framework for the purchase of inputs,
the matching of services with actual needs and an integrated approach to targeting school aid
beneficiaries, among others. Another major Government project is the identification and
targeting of beneficiaries of social protection programmes through the establishment of an RSU,
which is being discussed within the abovementioned Steering Committee.
4.2.1.9 Supported measures and expected outcomes: The proposed sector budget support
will streamline existing programmes, improve and harmonize beneficiary targeting, broaden the
AMO contribution base and reduce the burden of compensation. Specifically, this will entail
supporting: (i) MEN’s action to improve the implementation of the “one million schoolbags”
initiative and the school aid system (transport, meals, boarding facilities); (ii) the process for
instituting the RSU; (iii) the moving of employees from private health insurance plans to AMO;
and (iv) continuation of the de-subsidization strategy for basic products. These measures will
yield efficiency gains in the use of financial resources allocated to social safety nets. This will
enable MENFP to ensure that a higher number of students benefit from more social aid in the
form of school meals, boarding facilities and transport, and will reduce the burden of
compensation, thus releasing resources for strengthening targeted social protection programmes.
For its part, the switch to AMO (Article 114 of Law 65-00) will help to reduce the costs resulting
from fragmentation of health insurance.
12 This entails gauging the means available to an individual or family to meet its needs, in order to determine their eligibility for State
assistance.
13
Component 2 - Expansion of social protection coverage and improvement of the quality of
services
4.2.2. The objective of this component is to accelerate enrolment in existing contributory
social protection systems, such as AMO, while reinforcing key non-contributory systems and
preparing the ground for coverage of risks that have received only limited coverage hitherto, such
as those related to gender, childhood, loss of employment and industrial accidents. This
component has two sub-components designed respectively to: (i) expand the coverage of high-
impact social protection programmes; and (ii) improve the quality of social protection services.
Sub-component 2.1- Expansion of the Coverage of High-impact Social Protection Programmes
4.2.2.1 Problems and constraints: The coverage of social protection mechanisms remains
limited despite the progress made over the past decade13. Approximately 38% of the
population is not yet covered by basic medical insurance, particularly people operating in the
informal sector, the liberal professions and self-employed workers and their families who are not
eligible for RAMED coverage. The proportion of household health expenditure remains quite
high (53.4% of total health expenditure). In this respect, the AMO roadmap recommends that, to
reduce direct payments for health services by households, insurance should be extended to the
entire labour force. At the national level, the preschool enrolment ratio is only 64.3% and does
not exceed 28.3% for girls in rural areas, whereas preschool is crucial to the academic success of
children and their productivity in adulthood. In rural areas, only 69.5% of any age group reach
high school (23.6% of girls in rural areas). Moreover, certain social risks such as loss of
employment, industrial accidents and disability are not sufficiently covered. Lastly, as indicated
above, social disparities particularly affect women, who are victims of violence and, more
generally, of gender inequality in many areas.
4.2.2.2 Recent measures adopted by the Government: The Government is stepping up its
efforts to expand coverage of social protection to self-employed workers, students and the
disabled in particular. On 19 August 2015, the decree implementing Law No. 116 - 12 on the
AMO student scheme was promulgated, entitling them to the same range of benefits as public
sector employees. This measure primarily concerns 288,000 students below the age of 30. The
Government has defined the scheme for AMI coverage, which entails gradually enrolling self-
employed workers in the CNSS under a separate scheme, starting with the socio-professional
categories that are better organized. The preliminary draft of the legal instruments that will
govern self-employed workers was produced by ANAM and submitted to members of the CMB
technical commission. The Government's approach is also supported through the adoption of
Decree No. 2-14-278 establishing the Inter-ministerial Committee tasked with monitoring the
implementation of strategies and programmes that promote the rights of persons with disabilities.
Lastly, the Government's social protection strategies focus on improving the living conditions of
women. They prescribe gender mainstreaming and gender equality, especially under the
Government’s Equality Plan ("Ikram"), and actions that combat discrimination and violence
against women and promote their empowerment. Such actions include the drafting of a law to
proscribe violence against women and set up an authority to promote gender equality and combat
all forms of discrimination. The Government has also broadened the gender-sensitive budgeting
process.
4.2.2.3 Supported measures and expected outcomes: This sub-component seeks to
strengthen the protection of women, accelerate enrolment in public health insurance, combat
exclusion, improve the social protection of children, improve coverage for industrial accidents,
and ensure a sustainable system of compensation for loss of employment. The programme intends
to support: (i) the adoption of legal provisions proscribing violence against women; (ii) gender-
13 Sources for this section: various reports (see Technical Annex VI).
14
sensitive budgeting; (iii) the enrolment of students in AMO; (iv) the adoption of an action plan
that mainstreams gender into disability concerns; (v) government’s preparatory studies on
community schools and preschool education; and (vi) the adoption of government initiatives on
industrial accidents and coverage of risks related to loss of employment. These measures will
lead to the enrolment of 450,000 persons in AMI in the first three years following promulgation
of the law on insurance for the self-employed. The programme will help to establish a legislative
mechanism for protecting women against all forms of violence. It will also enrol 288,000 students
in AMO and enhance social participation for persons with disabilities in accordance with
international commitments and the 2011 Constitution. Apart from achieving legislative progress
in preschool education, PAGPS will also fine-tune the concept and promote the establishment of
community schools. Lastly, it will improve support to victims of accidents at work and workers
who lose their jobs
Sub-component 2.2- Improving the Quality of Social Protection Services
4.2.2.4 Problems and constraints: Improving the quality of services is a duty to Moroccan
citizens, but also a condition for ensuring the sustainability of the social protection system.
This is particularly true of AMI, whose establishment will require lengthy negotiations between
the Government and various professional bodies. Consequently, the target communities must be
encouraged to enrol in the scheme and they will benefit from it only if the supply of health
services improves, meets their need for rapid treatment close to their workplaces, and if the
accrued benefits are coupled with a pension scheme. The quality problem partly stems from a
lack of local social protection services. That is why the Government, after noting in 2012 that
only 30% of the population expressed satisfaction with its assistance to the poor, initiated the “4
+ 4 Strategy” to strengthen the Social Pole and restructure social activities.
4.2.2.5 Recent measures adopted by the Government: The Government plans to establish
Social Welfare Centres in order to bring services closer to citizens and to ensure the provision of
necessary care. In this regard, it is at work to strengthen the social professions by preparing a bill
on social workers. This law seeks to regulate the scope of social action; guarantee the rights of
beneficiaries and social workers; and adopt a rights-based approach in the area of social action.
The Government is also establishing systems aimed at improving access to social services.
Specifically, this involves strengthening local counselling and guidance services, which are
expected to acquire a better knowledge of vulnerable communities and their needs at the local
level, especially women in distress, the elderly and children in difficulty. Efforts are also made
to improve access to expensive drugs in the case of serious diseases, through agreements with
pharmacies and direct purchase of medicines by insurance providers.
4.2.2.6 Supported measures and expected outcomes: This sub-component seeks to
professionalize social work and provide close support to users. The programme proposes to
support: (i) the preparation of a bill on social workers; (ii) the strengthening of local counselling
and guidance services; and (iii) the establishment of a system of direct purchase of expensive
drugs by CNOPS and CNSS. These measures will regulate the scope of social action; guarantee
the rights of beneficiaries and social workers; and yield a rights-based approach in the area of
social action. They will also yield a better understanding and support of vulnerable groups such
as women and children, and improve access to drugs for patients needing expensive treatment in
the case of protracted illnesses.
4.3 Programme Reform Implementation Status
In accordance with the commitments made by the Government of Morocco during the
appraisal mission, the conditions precedent (Measures 1 to 3 in Table 4) shall be fulfilled
prior to presentation of the programme to the AfDB Board of Directors. This will rapidly
15
kick-off the program, as was the case for PARCOUM III. Fulfilment of Measures 4 to 6 will
trigger disbursement of the second tranche in 2017.
Table 4: Reform Measures that Trigger Disbursement Conditions precedent to Board
presentation (2016)
Proof required (2016) Conditions for the
second tranche (2017)
Proof required (2017)
1. Validation of the CMB strategy
by the CMB Steering Committee
and of its draft Action Plan by the
Inter-ministerial Technical
Committee.
Letter from the Ministry
of Health and copy of the
relevant documents.
4. Transmission of the
draft benchmarks for
preschool education to
MEF.
MENFP’s letter of
transmission of the draft
benchmarks and copies
thereof to MEF.
2. Approval of the bill on AMI by
the Governing Council.
Minutes of the Governing
Council session proving
approval of the bill.
5. Continue disbursement
of funds to start a
compensation mechanism
for loss of employment
Transmission of the draft
employment programme for
the Youth Promotion and
Employment Fund
(employment chapter) for
2017.
3. Approval by the Governing
Council of Bill No. 103-13 to
combat violence against women.
Minutes of the Governing
Council session proving
approval of the bill.
6. Transmission of the bill
on social workers to the
General Secretariat of the
Government.
MSFFD’s letter of
transmission of the bill to the
SGG.
4.4 Financing Needs and Arrangements
According to projections by the authorities, the financing needs of the Treasury of the
Kingdom of Morocco for 2016 would amount to approximately MAD 42.6 billion, or about
USD 4.4 billion, and MAD 32.8 billion for 2017 according to the IMF (see table below). These
needs will be covered by Morocco’s own resources and external resources. The budget support
operations proposed by the Bank in 2016 (PARSIF and PAGPS amounting to UA 165.2 million
and the second tranche of PAPMVII worth USD 55 million) represent approximately 12.5% of
scheduled external financing needs for one fiscal year (6.8% for PARSIF, 3.4% for PAGPS and
2.4% for PAPMVII). Furthermore, budget support operations represent 38% of the financing
needs of one year’s balance of payments (20.6%, 10.2% and 7.2% for PARSIF, PAGPS and
PAPMVII, respectively). According to IMF data, PAGPS would cover 2.7% of the scheduled
external financing needs for 2017.
Table 5 – Projected Financing Needs and Sources
2016 2017
In
Million Chapters MAD UA USD EUR MAD UA USD EUR
A Total revenue and grants 222 155.5 16 293.1 23 092.7 20 251.4 293 700.0 21 540.3 30 529.7 26 773.3
Comprising: non-tax revenue
(including CCG grant and
excluding budget support) 27 160.5 1 992.0 2 823.3 2 475.9 50 200.0 3 681.7 5 218.2 4 576.2
B Total expenditure and net loans 264 773.7 19 418.8 27 522.8 24 136.4 326 500.0 23 945.9 33 939.2 29 763.3
Including: public debt repayment 28 284.6 2 074.4 2 940.1 2 578.4 30 500.0 2 236.9 3 170.4 2 780.3
Including: Capital expenditure (*) 53 129.9 3 896.6 5 522.8 4 843.2 58 500.0 4 290.5 6 081.0 5 332.8
C Overall balance (settlement
basis) (A B) -42 618.2 -3 125.7 -4 430.1 -3 885.0 -32 800.0 -2 405.6 -3 409.5 -2 990.0
D Arrears accumulation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
E Special Treasury account balance 6 000.0 440.0 623.7 547.0 0.0 0.0 0.0 0.0
E Budget balance (commitment
basis) (C + D) -36 618.2 -2 685.6 -3 806.4 -3 338.1 -32 800.0 -2 405.6 -3 409.5 -2 990.0
F External financing (without AfDB
budget support in 2015) 19 427.6 1 424.8 2 019.5 1 771.0 5 449.3 399.7 566.4 496.7
G AfDB external financing
(PARSIF) 1 508.0 110.6 156.8 137.5 0.0 0.0 0.0 0.0
H AfDB external financing (PAGPS) 744.6 54.6 77.4 67.9 550.7 40.4 57.2 50.2
I AfDB external financing
(PAPMVII) 529.1 38.8 55.0 48.2 0.0 0.0 0.0 0.0
J Domestic financing (net) 14 408.8 1 056.8 1 497.8 1 313.5 26 800.0 1 965.5 2 785.8 2 443.0
K Financing (F + G+H+I+J) 36 618.2 2 685.6 3 806.4 3 338.1 32 800.0 2 405.6 3 409.5 2 990.0
L Residual financing gap 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Source: 2016 (2016 Finance Act); 2017 (IMF, Article IV 2016)
16
4.5 Programme Beneficiaries
The programme will benefit the entire Moroccan population: It will help to further reduce
poverty by providing improved and more equitable access to social protection services that are
more efficient and sustainable. The programme will specifically benefit the most vulnerable
Moroccans, especially women, by establishing the legal and regulatory frameworks necessary
for improving their living conditions. The other vulnerable groups targeted by the programme
include disadvantaged preschool children, pupils and students; persons with disabilities and
workers who have lost their jobs or been victims of workplace accidents.
4.6 Programme Impact on Gender
Women will reap highly substantial benefits from PAGPS. Since their situation is more
vulnerable than that of men, women will also benefit more. Women are the primary beneficiaries
under the RAMED programme, which seeks to guarantee access to basic health services that
largely benefit them and their children. Furthermore, the programme will specifically develop
tools that protect Moroccan women against all forms of violence, and provide greater support to
women with disabilities and generally women in distress through identification and closer
support, thanks to the counselling and guidance units set up in multifunctional centres for women
(EMF). Moreover, young girls will receive greater school assistance that will enable many of
them to make the transition from primary to secondary education.
4.7 Environment and Climate Change
The programme is budget support, classified under environmental category III by the
Bank. The programme is not eligible for the climate risk identification and climate change
adaptation process. Reforms supported by the programme have no direct impact on the
environment. Morocco is signatory to various climate conventions and protocols. Moreover, it
has established social safety nets against natural disasters. Hence, a World Bank programme was
approved on 20 April 2016 for the integrated management of natural disaster risks and
resilience. This programme specifically seeks to establish a national resilience fund, a national
insurance programme and a solidarity fund to protect businesses and households against climate
risks.
5 IMPLEMENTATION, MONITORING AND EVALUATION
5.1 Implementation Arrangements
5.1.1 Institution in charge: The programme will be coordinated by MEF through a
Committee established within the Budget Directorate and bringing together entities involved in
implementing programme measures. MEF will conduct such coordination together with the other
entities involved in programme implementation, in particular the Ministry of Health; the Ministry
of Interior; the Ministry of Education and Vocational Training; the Ministry of Employment and
Social Affairs; the Ministry of Solidarity, Women’s Empowerment, Family and Social
Development; and the Ministry of General Affairs and Governance. Institutions under
supervision, such as CNSS, ANAM and CNOPS, will be closely involved, especially through the
CMB Steering Committee and Technical Committee. All entities involved in the programme
have acquired expertise in their respective fields and have wide experience of the reforms covered
by PAGPS.
5.1.2 Fiduciary Arrangements
5.1.2.1 Morocco's fiduciary risk is deemed moderate. Country Fiduciary Risk Assessment
(CFRA): An update of the CFRA was conducted within the framework of public finance
management by the Bank in March 2016. It concluded that the overall country fiduciary risk is
17
moderate, thanks mainly to satisfactory public finance management processes (three-year budget
programming and preparation, monitoring of budget implementation, management accounting
and reporting, internal audit, review and external audit). The results of previous studies such as
PEFA (2009), CFAA (2007) and CPRA (2008), as well as the public expenditure review reached
the same conclusion. The weaknesses identified led Morocco to launch reform implementation
under LOLF 130-13 of 2 June 2015. It entailed enhancing public management performance
through a performance-based programme budget and within a three-year budget framework. The
same applies to the enactment and implementation of principles and rules governing the financial
balance of the Finance Act and public finance transparency through a State budget and accounts
that are more accurate and certified by the Court of Auditors. Also worth mentioning is the greater
role of Parliament in the budget debate and in public finance control. Some of these reforms have
been implemented (particularly the establishment of the PFM control commission within
Parliament) or are underway, such as the performance-based programmatic approach introduced
in 16 pilot ministries. Furthermore, audit results of fund flows for sector budget support
operations based on the relevant IGF reports indicate that the risks of delays and foreign exchange
conversion errors are low at the level of Bank Al Maghrib (Central Bank of Morocco) and the
General Treasury of the Kingdom.
5.1.2.2 Fiduciary risk assessment for the social protection sector: The administrative,
financial and accounting management mechanisms for public funds, as well as those for internal
and external controls, are in place. For the moment, sector entities (DPRF/MS, DRHBAG/MEAS
and EEPs especially Entraide Nationale (National Mutual Assistance Fund) and ANAM) are
classified at a level of preliminary control conducted by the State (DEPP for EPAs) using the
hierarchical nomenclature instituted by the authorities for modulated control. Improvement areas
are obvious in administrative management, for instance management of assets (property,
equipment, etc.) for MOH and Entraide Nationale, as well as management of human resources
and medicine stocks for MOH. As regards the accounting management of Entraide Nationale,
ANAM has to ensure the streamlining of preliminary controls and formalization of monitoring
when implementing audit recommendations. The separation of some functions and tasks is
another improvement to be executed by Entraide Nationale. Risk mitigation measures (see
annexes) will not yield full results within the two-year time period of PAGPS implementation.
5.1.2.3 Financial management and disbursement mechanisms: Given the nature of the
operation, financial resources shall be utilized in accordance with national public finance
management regulations. To this end, MEF will be responsible for managing the financial
resources of PAGPS. Disbursement: Budget support, in the form of a loan, will be disbursed in
two tranches. Each tranche will contribute in covering the deficit of the 2016 and 2017 budgets,
subject to fulfilment of the general and specific conditions of the operation by the Borrower. At
the Borrower’s request, the Bank will disburse the agreed amount of funds in foreign exchange
into an account at Bank Al Maghrib, which will credit the Single Treasury Account (CUT) with
the equivalent amount in local currency. Accountability: Every year, the Moroccan Government
tables before Parliament the Audited Budget (“Loi de Règlement – LR”) on the execution of the
Finance Act (LF) in the first quarter of year n+2. This LR is accompanied by the report of the
Court of Auditors on the execution of the LF and the general statement of conformity between
the management accounts and the general account of the Kingdom. All these reports for 2016
will be analysed by the Bank. Audit and Supervision: The internal audit of PAGPS will be
conducted by IGF, which will undertake a specific audit of the financial flows of this support
operation as well as a performance audit thereof. The relevant TORs prepared by IGF were
discussed with the Bank. The time limit for submission of the audit report to the Bank will be six
months from closure of the programme. Given the sector’s substantial fiduciary risk level,
PAGPS will be subject to two fiduciary supervisions (Technical Annex I).
18
5.1.3 Procurements: Since the project is sector budget support, resources will be used to
finance needs that will be procured through the national public procurement system.
5.1.3.1 Assessment of the risk level under the procurement component of the Country
Fiduciary Risk Assessment (CFRA): (i) During preparation of the operation, information
was collected to update and re-evaluate the risk level of the procurement component of
Morocco’s CFRA. As indicated in the CFRA, the risk level of the procurement component was
deemed moderate. Public procurements in Morocco are governed by Decree No. 2-12-349 of 30
March 2013 and specific regulations for certain public institutions (EEPs). The Moroccan public
procurement system has recorded several qualitative reforms over the past decade (see annex),
reflecting the determination of the national authorities14 to modernize and constantly improve the
legislative and regulatory framework for national public procurement in order to bring it to
international standards. (ii) The national procurement system has an acceptable level of
transparency: the existing system is characterized by a requirement (respected) to open access
to information, with an obligation to ensure the publication and annual planning of each business
opportunity as well as the results of all tenders on public procurement websites. To increase the
level of participation, the system in 2015 introduced the possibility of submitting electronic
tenders. (iii) The system is equipped with a control mechanism that is functional and
reassuring, with a level of integrity that requires further improvement, even though there
has been progress: any bidder can complain and expect remedy from a complaints management
organ (the National Public Procurement Commission (CNCP)). The integrity and credibility of
the system improved in 2015 when the composition of the CNCP was expanded to include the
private sector.
5.1.3.2 Evaluation of the procurement practices of the Social Protection Sector: Almost all
EPAs from the sector covered by the operation and authorized to have their own regulations,
have taken measures to have their Boards of Directors approve specific procurement regulations
inspired by the applicable State decree of March 2013, and have benefited from advances in
transparency provided for under same decree. The obligation for each authorizing entity to
conduct public procurement audits15 and publish summaries of such reports have been complied
with to varying degrees. Most structures respect this requirement to conduct audits, undertaken,
as the case may be, by a private audit firm, the General Inspectorates of Ministries or internal
audit structures for State institutions. In recent years, the implementation of recommendations
made by the Court of Auditors to some of these structures have helped to improve the public
procurement management capacity in State institutions operating in the sector. Based on the
foregoing, there is no objective evidence on which to conclude that the risk level on procurements
in the social protection sector would differ from the national level. As with other stakeholders at
the national level, those of the social protection sector should take appropriate measures not only
to conduct procurement audits but also to publish summaries thereof on the public procurements
portal as required by the regulations.
5.1.3.3 In light of the foregoing, the details in annex and the proposed mitigation measures, the
legal and regulatory framework of public procurement, the institutional framework as well as
fiduciary environment in Morocco provide reason enough to conclude that the resources of this
operation will be utilized through acceptable, clear and transparent procedures, and subject to an
effective and reassuring control mechanism.
14 In the July 2011 Constitution, the authorities introduced the right of access to public information and promotion of good governance,
transparency and integrity in public procurements. 15 Contracts exceeding MAD 5 million or MAD 1 million for directly negotiated contracts.
19
5.2 Monitoring and Evaluation Arrangements
5.2.1 Institutions in charge: The Ministries of Solidarity, Women's Empowerment,
Family Affairs and Social Development; Health; Interior; Employment and Social Affairs;
General Affairs and Governance; the Office of the Prime Minister, ANAM, CNOPS, CNSS
and ONDH, will be involved in PAGPS’s implementation, as shown in the Matrix of
Measures. Their action under the programme will be coordinated by MEF and they will provide
the studies and data needed for programme monitoring and evaluation.
5.2.2 Monitoring system: The monitoring and coordination of programme
implementation will be conducted based on the Matrix of Measures jointly adopted with
the Government. Regular sector policy dialogue will be held and supervision missions
organized, at least every six months. These missions will focus on monitoring the programme
with the relevant institutions, mainly by studying annual reports, analysing the recommendations
made and reviewing disbursement triggers. The programme will be subject to two fiduciary
missions (see 5.1.2.3).
5.2.3 Information system, reporting and dissemination mechanisms: Implementation
will be monitored through annual progress reports of sector strategies and financial reports
that the Government will transmit to the Bank. During the first half of 2018, the Bank and the
Government will jointly prepare the programme completion report.
6 LEGAL INSTRUMENT AND AUTHORITY
6.1 Legal Instrument
A loan agreement for financing the programme will be signed between the Kingdom of the
Morocco and the Bank.
6.2 Conditions Associated with the Bank’s Intervention
6.2.1 Conditions precedent to presentation of the programme to the Board of Directors:
The Moroccan authorities shall implement Measures 1 to 3 presented in Table 3, prior to
presenting the programme to the AfDB Board of Directors.
6.2.2 Conditions precedent to loan effectiveness: Effectiveness of the loan agreement shall
be subject to fulfilment of the conditions set forth in Section 12.01 of the General Conditions
Applicable to Loan Agreements and Guarantee Agreements of the Bank.
6.2.3 Conditions Precedent to Disbursement
(i) First Tranche: In addition to effectiveness of the loan agreement, disbursement
of the first tranche of the loan (USD 77.40 million) shall be subject to fulfilment
by the Borrower, to the Bank’s satisfaction, of the following condition: provide to
the Bank evidence of opening a foreign exchange account in Bank Al Maghrib to
receive loan resources.
(ii) Second Tranche: Disbursement of the second tranche of the loan (USD 57.25
million) shall be subject to fulfilment by the Borrower, to the satisfaction of the
Bank, of conditions precedent Nos. 4 to 6 of Table 4.
20
6.3 Compliance with Bank Group Policies
This programme complies with applicable Bank policies, including its operational guidelines
on programme-based support operations. No waiver is requested.
7 RISK MANAGEMENT
Table 6: Risks and Mitigation Measures Risks Level Mitigation Measures
Ability and willingness of
the Government to drive
the reforms supported by
the programme
Low Social protection enjoys sustained attention from the Government, whose
capacity is clearly demonstrated in ongoing actions (RAMED has attained
its coverage targets). Furthermore, the programme includes measures for
strengthening evidence-based decision-making that will facilitate
discussions among stakeholders.
Low quality of social
protection services and
sustainability of resources
to fund reforms
Moderate The Government devotes constant financial effort to social programmes and
has, for example, set up new special Treasury accounts (Social Upgrade
Fund and Inter-Regional Solidarity Fund) under the 2016 Finance Act.
Furthermore, a health financing strategy was prepared with Bank support
that will contribute to rationalize funding in the sector. The measures
included in the programme will yield greater efficiency and will therefore
help to achieve better results with available resources. AfDB budget support
to back the reforms.
Fragmentation of social
protection mechanisms
(difficulty to coordinate
reforms).
Moderate The coordination role played by MEF and the related committee will help
to strengthen coordination.
Legislative elections in
October 2016.
Moderate The identification of programme measures took this situation into account.
Moreover, changes of Government have never really affected Morocco’s
commitments or called structural reforms into question.
The law on AMI is
rejected by parliament.
Moderate This law is the culmination of a long consultative process.
8 RECOMMENDATION
The programme will support the Government of Morocco in its efforts to reform social
protection, and contribute to the reduction of poverty and exclusion. Management
recommends that the Board of Directors approve, in favour of the Kingdom of Morocco, a loan
of USD 134.65 million for implementation of the programme, for the purposes and under the
terms set out in this report.
I
Annex 1
Letter of Development Policy
SECTOR POLICY LETTER TO THE AFRICAN DEVELOPMENT BANK
The Government of Morocco has engaged major reforms in the social protection sector in
recent years, the general strategic thrusts of which consist in improving the collective welfare
mechanisms that allow individuals or households to financially meet the consequences of social
risks. Several efforts have been made to offset risks related to:
Poverty and social exclusion through the implementation of the National Human
Development Initiative, which comprises 4 programmes in favour of the poor;
Health, by extending social protection and improving access to care, which
comprises the establishment of the Compulsory Basic Health Insurance (AMO)
and the Medical Assistance Scheme for the Economically Disadvantaged
(RAMED);
Maternity – the family, which incorporates family services through the Social
Cohesion Support Fund, allowing for the implementation of direct assistance
programmes to widows in a precarious situation, assistance to individual with
special needs as a means of promoting the rights of individuals in situation of
disability, TAYSSIR and the “One Million Schoolbags” Royal Initiative. It is
also worth recalling the implementation of the Government Equality Plan
(PGE), which highlights the preparation of the project to combat violence
against women and the project to create an entity responsible for equality and
the fight against all forms of discrimination;
Housing, through the application of the “Cities without Slums” programme and
which helps to improve the supply of decent housing and living environment to
citizens, in order to respond appropriately to the need for promoting low-income
housing, preventing unsanitary housing and above all, anticipating urban
development;
Employment, through the preparation of a new National Employment Strategy
up to 2025. Hence, it is worthy to note various programmes such as “IDMAJ”,
“TAEHIL”, “Auto-Emploi” that have given good results, and the compensation
for loss of employment (IDE) whose sustainability is guaranteed by employer
and employee contributions.
Social protection is one of the fundamental factors of the fight against poverty and exclusion,
and contributes significantly to social cohesion where it truly exercises a protecting and
integrating force. In a generally difficult context where job income allows fewer and fewer
individuals to guarantee their wellbeing, social security emerges as a primordial challenge. The
social development process can only take root if it is accompanied by respect of individual
rights as enshrined in the Moroccan constitution (Article 31), especially the right to health,
education, work, a healthy environment and security from all perspectives.
In this regard, and within the context of pursuing the implementation of Government’s action
plan emanating from the general strategic orientations of the social protection sector,
Government’s action in 2016 are set out along three main thrusts:
II
Institution of advanced regionalisation and enshrinement of the role of local
governments in socio-economic development, implementation of pension
system reforms, and generalisation of coverage under these systems to
categories so far excluded;
Pursuit of the institution of an integrated social policy aimed at fighting poverty
and all forms of marginalisation, social and territorial exclusion;
Promotion of employment by consolidating public investment effort, promoting
private investment and entrepreneurship, improving the business climate,
modernising the financial sector and improving conditions for financing the
economy.
Alongside these efforts, the Government accords high importance to strengthening justice and
individual freedoms, promoting the rights of women and Moroccans in the Diaspora, and
consolidating mechanisms for providing coverage to the most vulnerable social categories.
Therefore, the Government will pursue its efforts to implement the Constitution, institute
organic laws and push on with priority structural reforms. Specifically, these include:
Pension system reform as an urgent and crucial project;
Reduction of territorial and social disparities in the rural area, and strengthening
of social cohesion and the fight against poverty through the implementation of
the new programme to combat territorial and social disparities in the rural area
(roads, water, rural electrification, education and health, income producing and
generating activities (agriculture, craft, tourism), social activities (health centre,
sport and cultural activities));
Establishment of a Family Mutual Assistance Fund, which falls within the
framework of a new generation of services aimed at consolidating the cohesion
and sustainability of the family unit, and at addressing the needs of an essential
societal link;
Promotion of a social and solidarity-based economy in order to strengthen and
harmonize public action in favour of a social and solidarity-based economy at
both the national and regional level, facilitate the emergence of a social and
solidarity-based economy that favours a more active fight against poverty,
precarity and exclusion, promote a territorial expansion of a social economy
based on the rational exploitation and development of riches and local potential,
and improve visibility for the sector through the development of an information
system and tools for project monitoring and evaluation;
Pursuit of compensation reform to free additional financial margins to sustain
the resources of the Social Cohesion Support Fund to further support the
“RAMED” Medical Assistance Programme, the “TAYSSIR” Programme, the
“One Million Schoolbags” Royal Initiative, as well as cater to widows in a
vulnerable situation and back programmes in support of individuals with special
needs.
Minister of Economy and Finance
(signed) Mohammed Boussaid
III
Annex 2
Matrix of Measures
MEDIUM-
TERM
OBJECTIVES
MEASURES AND INSTITUTIONS IN CHARGE OUTPUT INDICATORS OUTCOME
INDICATORS 2016 MEASURE
2017 MEASURE INSTITUTION IN
CHARGE
2016 2017 MEANS OF
VERIFICATION
PILLAR 1: Strengthen the social protection governance mechanism and optimize the use of resources
A.1.1 Strengthen the institutional framework for social protection
Strengthen the
coordination of the social
assistance
Continue the dialogue with the Secretariat General
of the Government on the draft amendment of Law No. 14 - 05 on the conditions for opening and
managing social protection institutions (EPS)
Transmit to the Governing Council the draft
amendment of Law No. 14 - 05 on the conditions for opening and managing EPS.
Ministry of
Solidarity, Women’s Empowerment,
Family Affairs and
Social Development
Draft
amendment transmitted to
SGG
Draft
amendment transmitted to
the
Governing Council
Letters of
transmission and copy of the
relevant texts
At least 40
women support centres are
established
186 social assistance centres
are set up
Strengthen the
governance of
the Basic Medical
Coverage
(CMB)
* Validate the strategy of CMB and its draft action
plan
Update the action plan of the CMB strategy
Ministry of Public
Health (Secretariat)
CMB strategy
validated by the
Steering Committee and
the Technical
Committee validates the
minutes of the
Steering Committee
meeting.
Draft action plan proposed
by the Technical
Committee.
Action plan
updated
Letter from the
Minister of Health
and copy of the documents
concerned.
Extension of
Medical
Coverage (CM) to the whole
population (90%
of pop. is covered in 2020)
Setting up of the
Agency that manages the
various CM
schemes
Present the institutional audit results of ANAM to
the Inter-ministerial Technical Committee of CMB
Make a recommendation on ANAM reform to
CMB Steering Committee
ANAM and Ministry
of Health/Secretariat
institutional
audit submitted
to the Inter-ministerial
Technical
Committee
The
recommendat
ions are discussed by
the Steering
Committee
2016 - Agenda and
minutes of the
Inter-ministerial Technical
Committee
2017 - Agenda and
minutes of the
Inter-ministerial
Steering Committee
Publish an Order on health regions.
(Technical support to the existing EU programme)
N/A Ministry of Health; Order published
in the Official
Gazette (OG)
N/A Publication of the
OG
Improving
RAMED
management,
Prepare a diagnostic study on the basket of
RAMED care and its implementation
Present to the Inter-ministerial Technical
Committee the diagnosis on the basket of care
and discussion of same by the Technical Committee
(Technical support provided by the EU)
Ministry of Health; Terms of
Reference of the
study are available
Terms of
reference and
draft report of the diagnostic
analysis
The agenda and
minutes of the meeting of the
Technical
Committee
Stabilization of
the average
annual consumption per
RAMED
beneficiary
IV
MEDIUM-
TERM
OBJECTIVES
MEASURES AND INSTITUTIONS IN CHARGE OUTPUT INDICATORS OUTCOME
INDICATORS 2016 MEASURE
2017 MEASURE INSTITUTION IN
CHARGE
2016 2017 MEANS OF
VERIFICATION
indicating its
recommendations
Present to the Inter-ministerial Technical Committee the various scenarios concerning the
establishment of a management structure for
RAMED
(Technical support to the existing EU programme)
Present the scenarios to the Steering Committee
ANAM and Ministry of Health/Secretariat
Scenarios concerning the
establishment of
a management structure for
RAMED
presented to the
Inter-ministerial
Technical
Committee
Scenarios on the
establishment
of a management
structure for
RAMED
proposed by
the Technical
Committee and presented
to the
Steering Committee
for validation
2016 - Agenda and minutes of the
Technical
Committee 2017 - Agenda and
minutes of the
Inter-ministerial
Steering
Committee
A.1.2 Strengthen accountability and evidence-based decision-making
Consolidate the
factual and
statistical basis
Preparation of the households/ONDH panel survey
(2017 edition) EPM 2017 (selection of BETs for
data collection)
Increase the sampling frame for the
household panel survey from 8000 to 16000
households and collect data
ONDH Launch of
competitive
bidding and
selection of
BETs for data
collection
2015 panel
survey results
available
and survey
data collected
for 16,000 households
2016 - Extract of
the public
procurement
portal, minutes of
the contract award
Committee and service order
2017 - Results of
the 2015 survey
Conclude the RAMED survey on perception of care
by beneficiaries and non-beneficiaries.
NA ONDH Validation of
the deliverables
by the Steering Committee
NA
2016 - Agenda and
minutes of the
Steering Committee
the RAMED
beneficiaries have
an electronic card (example: smart
card)
Data are available and authenticated;
data from care
establishments is collected through
and SIH or a data
entry portal; The data collected
are controlled and
validated; reports, master plans
products.
Prepare the establishment of the RAMED
component of the National Integrated Information
Management System (SNIGI)
Establish the RAMED component of the
National Integrated Information Management
System (SNIGI) on at least one pilot site
ANAM RAMED
component
contract
awarded
RAMED
component
deployed on
at least one
pilot site
2016 - 2017:
AMO and
RAMED 2016 and
2017 activity
reports are forwarded to the
Bank
Enhance
monitoring/eval
uation
Initiate an assessment of INDH impact on the target
population in 2016 (data collection)
Initiate an assessment of INDH impact on the
target population in 2016 (data analysis)
ONDH
Invitation to
tender for INDH
impact
Analysis of
collected data
2016 - Extract of
the public
procurement
V
MEDIUM-
TERM
OBJECTIVES
MEASURES AND INSTITUTIONS IN CHARGE OUTPUT INDICATORS OUTCOME
INDICATORS 2016 MEASURE
2017 MEASURE INSTITUTION IN
CHARGE
2016 2017 MEANS OF
VERIFICATION
assessment
published and
execution of the field survey
portal, minutes of
the contract award
Committee and Service order and
field survey
progress reports. 2017 - Results
report
Increase
consideration of
users’ views
Strengthen the Hotline, the Front Office service and
communication of ANAM (this measure is covered
by the measure on institutional audit in A.1.1).
See the measure on institutional audit in
A.1.1)
ANAM See A.1.1 See A.1.1 The 2016 ANAM
progress report is
sent to the Bank
The satisfaction
of AMO and
RAMED
beneficiaries is increasing (EU
survey)
A.1.3 Increased returns on social spending and broadening of the contribution base
Streamline existing
programmes
Improve implementation of the “one million schoolbags” Initiative.
Improve the school transport support system MENFP Ministerial circular
streamlining aid
adopted as part of the “one
million
schoolbags”
Initiative.
Ministerial circular
streamlining
aid is adopted for school
transport
Transmission signed ministerial
circulars on
improvement of the aid concerned
N/A
Sign Programs Contracts signed between the
Ministry of Health and the regional directorates (for implementation from 2018)
MS
N/A
Programme
contracts signed
between the
MOH, its departments
and regional
directorates
Transmission of
programme contracts
Improve and harmonize
targeting of
beneficiaries
Initiate the RSU establishment process
Define and deploy an action framework for
RSU establishment
Ministry of the Interior (Steering
Committee of the
single social register)
Meetings of the steering
committee and
the technical
committee of
the RSU
Existence of a roadmap for
RSU
establishment
2016- Proof of the holding the
steering
committees
(agenda)
2017 -
Transmission of the roadmap
Broaden the
AMO base of
contributors
Switching ONCF employees, covered by a private
health insurance, to AMO under Article 114 of the
Law No. 65-00
N/A CNOPS and the
ministries concerned
Convention
signed between
ONCF and CNOPS
Convention signed
with the ONCF
Reduce the cost
of compensation
and re-direct
resources to
other social
Continue to reduce the quota of subsidized soft
wheat “national flour” (SWNF).
1- Continue to reduce the quota of
subsidized soft wheat “national flour”. 2- Start the process for gradual de-
subsidization of sugar
MAGG, in
coordination with the Ministry of Interior,
the Ministry of
Economy and
Finance and the
Reduce the
quota for SWNF by 1 million
quintals.
Reduce the
quota for SWNF by an
additional 1
million
quintals.
2016 - Results of
the proceedings of the committee
responsible for
distributing
SWNF.
Redeployment of
part of the subsidy gains to social
projects
Allocation of an
additional MAD1
VI
MEDIUM-
TERM
OBJECTIVES
MEASURES AND INSTITUTIONS IN CHARGE OUTPUT INDICATORS OUTCOME
INDICATORS 2016 MEASURE
2017 MEASURE INSTITUTION IN
CHARGE
2016 2017 MEANS OF
VERIFICATION
protection
expenditure
Ministry of
Agriculture
Trigger the
gradual de-
subsidization of sugar
2017 - Order on
sugar prices
billion per year to
MOH
PILLAR 2: EXPANSION OF SOCIAL PROTECTION COVERAGE AND IMPROVEMENT OF THE QUALITY OF SERVICES
A.2.1 Expansion of High-impact Programmes
Strengthen the protection of
women
*Approval by the Governing Council of Bill No.
103-13 to combat violence against women.
Submit the draft decree relating to Law No. 103-13 to the SGG
Ministry of Solidarity, Women’s
Empowerment,
Family Affairs and Social Development
Bill No. 103-13 approved by the
Governing
Council and under
consideration in
Parliament
Draft decree transmitted to
SGG
2016 Proof of approval of the
law by the
Governing Council
2017 - Letter of
transmission of the decrees to the
SGG
Operationalization of gender-sensitive budgeting in
a ministry in charge of social protection
At least two other ministries have gender-
sensitive programmes and indicators
MEF / sector
ministry
The Ministry of
Health has gender-sensitive
programmes
and indicators
The Ministry
of Solidarity has gender-
sensitive
programmes and
indicators
Ministerial
performance projects for 2016
and 2017
Accelerate enrolment in
State health
insurance schemes
Start operations on the affiliation of students to AMO.
Ensure the affiliation of all eligible students to the AMO student scheme.
(EU support for the information campaign)
CNOPS-Higher education
institutions
10% of eligible students are
registered for
2015-2016 (at appraisal)
100% of eligible
Students are
registered in 2016-2017
CNOPS reports 2016 - 28000 eligible students
are registered.
2017- 288000 students are
eventually
registered under the AMO student
scheme. (These
figures are estimates and
dependent on
complying with
the obligation to
fill-in the data
sheets).
300,000 are
enrolled in AMI by 2018
*Approval of the bill on AMI by the Governing
Council.
(ii) Present the draft implementing decrees of the
AMI law to the Technical Committee, subject to adoption of the law by the two chambers of
Parliament.
Present to the Inter-ministerial Technical
Committee of the CMB at least one decree for the integration of a profession to AMI
(Technical support to the existing EU
programme)
MOH and Ministry
of Employment
(i) - Bill
approved by the Governing
Council.
(ii) - The draft decrees are
presented to the
Inter-ministerial
Technical
Committee of
the CMB
Draft decree
submitted to the
Committee of
the CMB
2016 - Report of
the Governing Council approving
the law on AMI.
2017 - Report and
agenda of the
Technical
Committee
Preparation and approval of the four procedures for
the enrolment of self-employed workers
Prepare and validate the plan and training
areas for CNSS staff posted to AMI
administration.
CNSS Four procedures signed by the
DG of the CNSS
Plan and training areas
approved by
the in-house steering
committee
chaired by the Director
General of the CNSS
2016 - Procedure forms signed by
the GM of CNSS
2017 - Plan and training areas
available together
with the report of the meeting
VII
MEDIUM-
TERM
OBJECTIVES
MEASURES AND INSTITUTIONS IN CHARGE OUTPUT INDICATORS OUTCOME
INDICATORS 2016 MEASURE
2017 MEASURE INSTITUTION IN
CHARGE
2016 2017 MEANS OF
VERIFICATION
Step up the fight
against
exclusion
Good governance of the implementation of
integrated public policy on disability
(Disability will also be addressed in the next EU
program)
Action Plan to mainstream gender into the
integrated public policy on disability
Ministry of
Solidarity, Women’s
Empowerment, Family Affairs and
Social Development
Finalisation of
the study on the
gender dimension and
presentation of
the action plan to mainstream
gender into the
Inter-ministerial
Committee for
Disability
Meeting of
the Inter-
ministerial Committee
and the
Technical Committee
on disability
2016- Letter
transmitting the
Action Plan to the inter-ministerial
committee and
transmission of the study to the Bank
2017- Record of
meetings of
disability
committees
The rate of
integration of
disabled people into the workforce
will be 10% in
2020 and they are represented in
elected bodies
Prepare the benchmark standards for community
schools
Transmit the draft regulations for community
schools
MENFP Benchmark
standards for
community schools
prepared
Draft
regulations
2016 - Reference
benchmarks
transmission letter 2017 -
Transmission
letter for the draft regulations and
copy of the
relevant texts
Satellite schools
are eradicated
(2020) The primary
school retention
rate in rural areas is equivalent to
the national
average (2020)
Improve social
protection for
children
Prepare preschool benchmark standards with a view
to amending Law No. 05-00
(UNICEF technical support)
* (i) Transmit the draft benchmark standards
to MEF
(ii) Transmit the draft amendment of Law No.
05/00 to MEF
MEN/MEF Draft
benchmarks
Draft
benchmarks
transmitted to MEF.
Draft
amendment to Law No.
05-00
2016 - Draft
benchmarks
2017 – Draft benchmarks
Letter of
transmission of the benchmark to
MEF
2.17 – Letter of transmission of the
draft amendment
to Law 05-00 and copies of the texts
50% of rural
children are
enrolled in preschool (2020)
Improve
coverage of
industrial accidents
Publish the six Orders of the Ministry of
Employment relating to the enforcement of Law
No. 18-12 (Accident report template; accident attestation template; funeral expenses; amicable
settlement record; documents to be requested from
the insurance company)
Adopt the Decree increasing benefits in case
of industrial accident
Ministry of
Employment/Gover
ning Council
6 orders Letter
transmission of
published orders.
Ensure the
sustainability of the
compensation
system for loss of employment
Continuing with the disbursement of funds to start a
compensation system for loss of employment
*Continuing with the disbursement of funds
to start a compensation system for loss of employment
MEF MAD 125
million allocated as seed
fund
MAP 125
million programmed
under the
seed fund
Draft employment
programme for the Youth Promotion
and Employment
Fund (Employment
Chapter) for 2017.
A.2.2. Improving the Quality of Social Protection Services
VIII
MEDIUM-
TERM
OBJECTIVES
MEASURES AND INSTITUTIONS IN CHARGE OUTPUT INDICATORS OUTCOME
INDICATORS 2016 MEASURE
2017 MEASURE INSTITUTION IN
CHARGE
2016 2017 MEANS OF
VERIFICATION
Professionalize
social work
Prepare the bill on social workers
*(i) transmit the bill to the SGG
(ii) transmit the bill to the Governing Council
Ministry of
Solidarity, Women’s
Empowerment, Family Affairs and
Social Development
Draft bill
available
Bill
transmitted to
the SGG and the
Governing
Council
December 2016-
Letter of
transmission of the bill to the SGG
and copy of the
bill 2017- Letter of
transmission to the
Governing
Council and copy
of the bill
Provide local
support to users
Sign a national agreement between CNOPS and the Board of the College of Pharmacists for the
establishment of a third-party payment system for
expensive drugs
Assess the effects of the agreement CNOPS The national agreement is
signed
The financial and technical
impact of the
agreement is assessed
through the
dashboard that includes
the gender
dimension and which is
set up for that
purpose
Signed agreement Master-plan
Annual Report of
CNOPS
86 expensive drugs are directly
paid for by
CNOPS Information
activities for the
providers and 12,000
pharmacies
involved Five additional
CNOPS
delegations are established
Set up the counselling and guidance unit within the
MFC in Kenitra
Test the enhancement of the counselling and
guidance unit after the Kenitra experience
Ministry of
Solidarity
Kenitra MFC
progress report
Counselling
and guidance units are set
up in at least
two MFCs
Field visits under
PAGPS and the Kenitra MFC
progress report
IX
Annex 3
IMF Press Release
Press Release No. 12/26 of January 28, 2016
On January 27, 2016, the Executive Board of the International Monetary Fund (IMF) completed the third and last
review of Morocco’s economic performance under a programme supported by a two-year Precautionary and
Liquidity Line (PLL) arrangement, and reaffirmed Morocco’s continued qualification to access PLL resources.
The current two-year PLL arrangement in an amount equivalent to SDR 3.2351 billion (about US$5 billion at the
time of approval or 550 percent of Morocco’s quota at the IMF) was approved by the IMF’s Executive Board in
July 2014. (See Press Release No. 14/368). The arrangement supports the authorities’ programme to rebuild fiscal
and external buffers and promote higher and more inclusive growth. It will expire in July 2016. Morocco’s first
24-month PLL arrangement was approved on August 3, 2012, with an access equivalent to 700 percent of the
quota, and expired in July 2014.
The PLL arrangement has provided insurance against external risks. The Moroccan authorities are treating the
arrangement as precautionary, as they did with the 2012–14 PLL arrangement, and do not intend to draw under
the arrangement unless Morocco experiences actual balance of payments needs from a significant deterioration of
external conditions.
The PLL, which was introduced in 2011, provides financing to meet actual or potential balance of payments needs
of countries with sound policies, and is intended to serve as insurance or help resolve crises under wide-ranging
situations.
Following the Executive Board discussion on Morocco, Mr. Mitsuhiro Furusawa, IMF Deputy Managing Director
and Acting Chair of the Board, made the following statement:
“Morocco’s overall economic performance has continued to improve in 2015. The implementation of bold policies
has helped to mitigate fiscal and external vulnerabilities and significant progress has been achieved in reforms. In
an environment that remains vulnerable to important downside risks, continued efforts to move ahead with
difficult but necessary reforms will be key for reducing the remaining vulnerabilities while promoting higher and
more inclusive growth.
“Fiscal developments have been positive and consistent with the authorities’ objective to reduce the deficit to 4.3
percent of GDP in 2015. Substantial progress has been achieved on the subsidy reform, while support to the most
vulnerable has expanded. Now that the draft legislation on the public sector pension reform has been approved by
the government, its timely adoption by parliament and implementation will be key.
“Progress has also been made in upgrading the financial policy framework, including implementing recent
Financial Sector Assessment Programme recommendations, in addition to implementing Basel III norms and the
new banking law. An important further step should be to finalize the new central bank law in order to enhance its
independence and extend its supervisory and resolution powers. Preparations for a more flexible exchange rate
regime, which will help preserve competitiveness and the economy’s ability to absorb economic shocks, are
progressing well.
“Morocco’s external position has improved considerably, owing mainly to strong policies, rising exports in newly
developed sectors, lower oil prices, and robust FDI, with reserves reaching a comfortable level. Structural reforms
to improve the business climate and enhance competitiveness continue to be a priority in order to build on those
gains. The implementation of the National Strategy for Employment will help address constraints in the labour
market and reduce unemployment, especially among the youth.
“The arrangement under the Fund’s Precautionary and Liquidity Line (PLL) remains on track. The PLL, which
the authorities continue to treat as precautionary, has provided Morocco with insurance against external risks
while supporting the authorities’ economic strategy.”
X
Annex 4
Recent Trends and Projections of the Main Economic Indicators, 2010-18
Table 1 - Macroeconomic Development
2014 2015 (e) 2016 (p) 2017 (p)
GDP growth 2.4 4.5 1.8 3.5
Real GDP growth rate per capita 1.0 3.2 0.5 2.3
Inflation 0.4 1.8 1.4 1.6
Budget balance (% of GDP) -4.9 -4.3 -3.5 -3.0
Current account (% of GDP) -5.7 -2.7 -0.7 -0.9
Source: Data from Domestic authorities; estimates (e) and prediction (p) based on authors' calculations.
Table 2 - GDP per Sector (as percentage of GDP)
2010 2014
Agriculture, forestry, fisheries
and hunting 14.7 14.7
Including fisheries 0.9 1.0
Mining & quarrying 2.0 3.6
Including crude oil and
natural gas extraction 0.0 0.0
Manufacturing 17.5 17.0
Electricity, gas and water 1.9 1.9
Construction 5.9 6.1
Wholesale and retail sale.
Hotels and restaurants 12.4 11.7
Including hotels and
restaurants 2.3 2.4
Transport, storage and
communications 8.2 6.5
Finance, real estate and services
to businesses 17.5 16.8
General government services 9.3 10.2
Other Services 10.7 11.2
Gross domestic product at
base price/factor cost 100.0 100.0
Source: Data from Domestic
authorities
XI
Table 4- Current Account (as percentage of GDP)
Table 3- Public Finance (as percentage of GDP)
2007 2012 2013 2014 2015
(e)
2016
(p)
2017
(p)
Total revenue and grants 28.5 28.0 27.7 28.0 27.4 27.3 26.8
Tax revenue 23.9 23.9 22.3 22.0 21.5 21.4 21.4
Grants 0.4 0.1 0.7 1.5 1.4 1.4 0.9
Total expenditure and net loans 28.6 35.3 32.9 33.0 31.7 30.8 29.8
Current expenditure 25.7 29.9 27.8 27.6 26.4 26.0 26.5
Interest-free 22.7 27.4 25.2 24.8 23.3 23.3 23.8
Wages and remuneration 11.9 12.8 12.5 12.7 11.9 11.8 11.7
Interest 3.0 2.4 2.6 2.8 3.1 2.7 2.7
Investment expenditure 2.9 5.4 5.1 5.4 5.3 5.4 5.6
Primary balance 2.8 -4.8 -2.6 -2.2 -1.2 -0.8 -0.3
Overall balance -0.1 -7.3 -5.2 -4.9 -4.3 -3.5 -3.0
a. Only major items are reported.
Source: Data from Domestic authorities; estimates (e) and prediction (p) based on authors' calculations
2007 2012 2013 2014 2015 (e) 2016 (p) 2017 (p)
Trade balance -17.8 -22.1 -20.5 -18.7 -14.7 -13.2 -15.4
Export of goods (fob) 19.1 17.3 17.1 18.2 17.2 16.8 16.5
Import of goods (fob) 37.0 39.5 37.5 36.9 31.9 29.9 31.9
Services 8.5 7.1 6.0 6.4 5.4 6.2 6.8
Factor income -0.5 -2.3 -1.5 -2.4 -2.5 -2.3 -0.9
Current transfers 9.7 7.8 8.1 9.1 9.1 8.6 8.6
Current account balance -0.1 -9.5 -7.9 -5.7 -2.7 -0.7 -0.9
Source: Data from Domestic
authorities; estimates (e) and
prediction (p) based on authors'
calculations.