Morocco: Second Review Under The Arrangement Under the Resilience and Sustainability Facility-Press Release; Staff Report; and Statement by the Executive Director for Morocco

This page presents Morocco’s Second Review under the Arrangement under the Resilience and Sustainability Facility (RSF). The authorities continue to show strong commitment to Morocco’s transition to a greener economy. While agricultural output suffered yet another drought in 2024, nonagricultural output has remained robust, and domestic demand is strengthening. Morocco continues to make progress in bolstering its resilience against climate change and seizing the opportunities from decarbonization. The focus on decarbonization, while limiting the impact on the most vulnerable, is welcome. In the current socioeconomic context with still elevated food prices and high unemployment, it appears more socially acceptable to pursue increases in excises on coal and other highly polluting products than a higher value-added tax (VAT) on fossil fuels. The planned replacement measure will provide an important price signal consistent with the authorities’ decarbonization objectives. The timely implementation of remaining measures under the RSF arrangement will be crucial for supporting Morocco’s green transition. Efforts should focus on further liberalizing the electricity sector, greening the tax system, addressing the risks that climate change pose to the stability of the fiscal and financial systems, and protecting the country’s diminishing groundwater resources.