Objective

It is essentially meant to analyse the efficacy of the Bank’s assistance to the country’s development, with a view to drawing useful lessons and making recommendations for the next Country Strategy Paper (CSP).

Main Recommendations

Recommendation(s) to the Bank:

• Generally speaking, the Bank should prepare and implement a prospective strategic approach based on an in-depth knowledge of the country. Taking into account the competitive environment, with Morocco’s access to a wide range of financing sources as well as the implementation capacities at the level of the Bank and the country, the Bank’s future strategy should further target the country’s key development challenges. These concern the preparation of the economy and society to Morocco’s opening to the world, the diversification of the economy, the reduction of agricultural vulnerability, water control and poverty reduction. 

• Pursue and improve its support to economic and sectoral reforms, notably the public administration reform, public finance management and the tax system In view of the many challenges confronting the Moroccan economy, the Bank’s financial assistance and its intellectual contribution will be required to support reforms covering a large number of institutional, economic and social fields. The Bank should fully draw lessons from the experience in order to improve the programme design quality through analytical work and enhanced dialogue on key measures. The Government pursues its efforts to control current expenditure, particularly those relative to the public service wage bill. The increase in budget savings also calls for a reform of the tax system, with a view to mobilising sufficient budget revenue to make up for the decline in tax earnings resulting from the dismantling of tariffs within the framework of the Partnership Agreement with the European Union. Support to these reforms will ensure a better public finance balance as and when the partnership agreement is implemented and build the investment capacity.  

• Support the agricultural sector reform plan and assist Morocco to further reduce its vulnerability. The agricultural sector is still vulnerable both in relation to the vagaries of the weather and the opening of markets. However, Morocco will not succeed in sustainably reducing poverty unless aggressive programmes meant to stimulate growth and agricultural reform are adopted. There is also need to assist the country to incorporate this sector into the free-trade zone problematic.

•  The Bank’s strategy should back-up Morocco’s efforts to create the conditions of sustainable growth based on private initiative : support in upgrading actors of the sector (provide counseling, training and financial services) ; direct support to businesses within the framework of some reforms (water, energy, finance, transport, medical cover); support to sectors with high potential growth and prospects, such as tourism and NICT; support for the modernisation of the country’s infrastructure. 

• Support the fight against poverty and social exclusion. The performance of economic policies has so far not been backed up by equitable distribution of economic andsocial progress. At the social level, particularly in the rural areas, Morocco is closer to a least advanced country of sub-Saharan Africa than to a Mediterranean middle-income country. All in all, the actions and reforms undertaken by the Government, particularly the institution of a social protection framework compatible with poverty reduction efforts and financially viable, are still insufficient. Following the Casablanca events of 16 May 2003, special interest was shown to the social dimension. In this regard, priority was given to social housing and the gradual reduction of dwellings unfit for habitation underpinned by a proximity policy. Development partners, including the World Bank, should pursue their efforts to reduce regional disparities. 

• The Bank should diversify its intervention instruments. This includes providing new instruments like loans to city councils and strengthening their synergy. 

• The Bank should strengthen the synergies with other partners as well as the harmonisation of approaches and procedures. 

• The Bank should develop a strategy and a programme on economic and sector work by establishing, in close consultation with the Moroccan Government and other partners, priorities based on the country’s needs, in order to improve the quality of the CSP and operations, notably support to reforms.