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IMF Staff Concludes 2013 Article IV Consultation Meetings and Third Review of the PLL with Morocco
RABAT – An International Monetary Fund (IMF) staff team led by Jean-François Dauphin visited Morocco from December 5 to 19, 2013 to conduct with the Moroccan authorities discussions on the 2013 Article IV consultation, as well as on the third review of Morocco’s economic performance under an arrangement supported by the Precautionary and Liquidity Line (PLL). The IMF Executive Board approved a 24-month arrangement under the PLL in an amount equivalent to about US$6 billion (700 percent of Morocco’s quota) in August 2012. During its stay, the mission also met with representatives of the private sector and civil society. The discussions focused on recent economic developments, the medium-term outlook, and economic policies to strengthen the economy’s resilience and lay the foundations for stronger and more inclusive growth.
At the conclusion of the visit, Mr. Dauphin issued the following statement:
“Despite an unfavorable regional and global economic context, the performance of the Moroccan economy improved overall in 2013 after the difficulties encountered in 2012. Although the effects of the European crisis were felt strongly in the nonagricultural sector, GDP growth is expected to reach about 5 percent owing to a bumper cereal crop.. Inflation remained low. The external current account deficit declined significantly and reserves remained stable at about 4 months of imports, helped by strong foreign direct investments. Public debt remains sustainable and the fiscal deficit is contracting owing in particular to the measures taken by the government.
Growth in 2014 could reach close to 4 percent, as the nonagricultural sectors accelerate and on the assumption that cereal output returns to average levels. However, the Moroccan economy remains vulnerable to international conditions. Although the global outlook is improving, the international economic environment remains fragile. In this context, it is important that the authorities continue the reforms undertaken to rebalance the fiscal and external accounts, strengthen competitiveness, ensure stronger and more job-rich growth, and improve social protection, particularly for the most vulnerable segments of the population.
In this context, the fiscal deficit of 4.9 percent of GDP targeted by the 2014 draft budget law is appropriate. It is important that the public deficit reduction leaves sufficient fiscal space to strengthen social protection and invest in infrastructure, education, and health. We welcome the government’s efforts to begin to reduce tax exemptions, particularly in the agricultural sector, and to reduce the cost of the subsidy system. The reform of the pension system is also urgent to ensure its viability and preserve fiscal sustainability. It is also important to strengthen and modernize the fiscal framework through a new organic budget law.
Improving competitiveness is necessary to consolidate Morocco’s external position. The efforts made in recent years to diversify export markets and products and attract additional foreign direct investment have already begun to bear fruit. In our view, greater flexibility in the exchange rate regime would help support competitiveness, enhance the capacity of the economy to absorb shocks, and support the globalization and diversification of foreign flows. Pursuit of the reforms aimed at improving the business climate, transparency, and the judiciary is necessary to continue to attract and stimulate private investment. It is also important to implement appropriate policies to increase the job content of growth.
The banking sector remains stable on the whole. We support the efforts of the Bank Al-Maghrib to strengthen its banking supervision arrangements, including gradual adherence to the Basel III norms, and to ensure adequate provisioning of non-performing loans, which increased slightly this year. To increase the potential growth of the economy, it remains necessary to continue financial deepening and increase access to credit, particularly for small and medium-sized enterprises.
The mission would like to thank the Moroccan authorities and all those with whom it had the opportunity to meet for their excellent cooperation and the productive discussions held.”
The Central Bank of Nigeria (CBN) has issued a stern warning to Deposit Money Banks (DMBs) over the illegal sale of mint Naira notes to currency hawkers.
The apex bank, in a circular signed by the Acting Director of Currency Operations, Mr. Solaja Olayemi, on Friday, emphasized that erring banks would face stringent penalties.
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As part of its efforts to curb the abuse of the national currency, the CBN announced plans to conduct nationwide checks to seize mint notes sold by hawkers.
Banks found to have released such notes will be required to pay a fine of 10% of the value of the affected cash withdrawn from the CBN on the date in question.
Subsequent violations will attract an additional penalty incrementally increased by 5%.
The CBN also reiterated its commitment to enforcing the Clean Notes Policy, warning that banks involved in hoarding, diversion, or any actions that disrupt efficient cash distribution would face appropriate sanctions.
With the festive season fast approaching, the apex bank urged DMBs to enhance internal controls to ensure transparent cash distribution.
It highlighted the need for proper utilization of Automated Teller Machines (ATMs) to ensure easy access to new notes by the public.
Furthermore, the CBN disclosed plans to intensify its mystery shopping and spot checks, working closely with law enforcement agencies to clamp down on any practices that undermine the integrity of the Naira.
Nigeria’s inflation rate surged to 33.88% in October 2024, up from 32.7% in September, according to the latest Consumer Price Index (CPI) report released by the National Bureau of Statistics (NBS) on Friday.
The month-on-month increase of 1.18 percentage points marks yet another strain on the nation’s economy, with transportation and food costs cited as the main drivers of inflation.
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Steep Year-on-Year Increase
Compared to October 2023, when the inflation rate stood at 27.33%, the October 2024 figure reflects a significant rise of 6.55 percentage points. This sustained upward trend highlights the worsening cost-of-living crisis for Nigerians.
Month-on-Month Breakdown
Inflation on a month-on-month basis also showed an uptick, rising to 2.64% in October 2024 from 2.52% in September. The faster rate of price increases further underscores the growing economic pressure on households.
Food Inflation Soars to 39.16%
Food inflation, a major component of the headline rate, reached 39.16% in October 2024, up from 31.52% in the same month last year.
The increase was driven by higher prices of staple items, including: Cereals and Tubers: Guinea Corn, Rice, Maize Grains, Yam, Water Yam, and Coco Yam. Oils and Fats: Palm Oil and Vegetable Oil. Beverages: Milo, Lipton, and Bourvita.
On a month-on-month basis, food inflation rose by 0.30 percentage points to 2.94% in October, up from 2.64% in September.
Price hikes in Palm Oil, Vegetable Oil, Fish, Meat, and Bread categories were major contributors.
Annual Food Inflation Hits 38.12%
The average annual food inflation rate over the past 12 months climbed to 38.12%, a sharp increase of 11.79 percentage points from the 26.33% recorded in October 2023.
The consistent rise in inflation, particularly food and transportation costs, continues to erode the purchasing power of Nigerians.
The Manufacturers Association of Nigeria (MAN) has expressed the view that support of both Nigerians and the government for the Dangote Refinery, would enable the giant refinery to perform optimally.
It added that such support will also serve as an impetus for other investors to invest in the downstream sector of the petroleum industry in Nigeria.
The President of MAN, Otunba Francis Meshioye, who made the call after a tour of the Dangote Petroleum Refinery, Petrochemical Complex and Fertilizer Plant advocated that Nigerians and the government should do all they can to support the multi-billion-dollar company, which he described as a source of pride and a gift not only to Nigeria but also to the African continent and the whole world.
He described the Dangote Refinery as a game-changer in the Nigerian oil and gas industry, saying that it is not only creating jobs and driving economic growth but also contributing to our nation’s energy security and self-sufficiency.
According to him, the project is quite inspiring, and he admired the inspiration of the promoter of the project, Aliko Dangote.
He said, “To have been inspired to establish this facility is very magnificent, it is the first ever in Africa and the first ever of such refinery in the whole world. It has many first, first and first.”
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The company has the capacity to produce all our needs locally, petroleum, and other similar products: no one would come to the facility and he would not be inspired or encouraged to ensure that all the support that the company requires should be given to it.
The MAN President said the government should do all that is humanly possible to ensure that the facility works Optimally. “It is prudent and expedient that the necessary supports are given to the company for the economic benefits of Nigeria.
“If the facility can produce 650,000 barrels of crude per day and Nigeria is producing far above this volume per day, she should give the facility all crude it needed to produce”.
He noted that apart from the fact that the facility can give Nigerians what they need locally, the excess will be exported, and when they are exported, the country benefits because it will earn foreign exchange for the government.
“So, whichever way we look at it, the facility requires the government’s support to be able to operate optimally. We have seen the laboratory which is in a class of its own. It is first among equals around the world. It is functioning very well. It is a complex on its own.
“With this kind of facility that starts from quality control to quality assurance, just to ensure that the harmful effects of the products are at zero level, what can be greater than this? This is very unique and I will encourage all stakeholders to give maximum support, and not by the way support, but maximum support.
“I cannot see anything that is lacking in this company, we have been here since morning and went through all the units. The facility can deliver products between 1760 trucks to 1800 trucks per day. So if you have such several trucks going out of the facility a day to various destinations in Nigeria, so many people will benefit from it. There will be more jobs, many families will be comfortable because of the jobs this will create, many artisans will benefit and it will have a spillover effect on so many sectors of the economy.
“If they can produce AGO, gasoline and Jet A fuel, this is good and the government should have no reason not to ensure the facility gets its backing to carry out its activities, because it is going to benefit massively,” he added.
The MAN boss who stated that his organization is an advocacy group, said to a large extent it will support the Dangote Refinery by pushing its case with the government, and also solicit the support of necessary government agencies that can ensure that it operates fully.
The association, he said, always discusses with the government issues that affect its members and it has always listened to it , and always finds solutions to those issues, stating further that Dangote Refinery’s case will not be different.
“The sheer scale and ambition of this project is truly impressive, and we applaud the vision and determination of the Dangote Group in making this refinery a reality.
As manufacturers, we understand the importance of reliable and affordable energy in driving our businesses forward. The Dangote Refinery will undoubtedly have a positive impact on the entire manufacturing value chain, providing a reliable source of fuel and petrochemical products that are essential for capacity utilisation and value addition.
“I believe that the success of the Dangote Refinery serves as an inspiration to all of us in the manufacturing sector. It demonstrates what is possible when we combine innovation, technology, and investment to create world-class facilities that benefit the entire nation,” he asserted.
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