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Morocco’s HCP Predicts Drop in Economic Growth Due to Drought, COVID-19

Source : | 11 March 2020 |  Uncategorized | 1095 views

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Rabat – Morocco’s expected economic growth for 2020 is set to slow significantly, head of Morocco’s High Commission for Planning (HCP) Ahmed Lahlimi confirmed to Reuters in a telephone interview on March 10.The serious impact of drought on agricultural output and the drop in tourism as a consequence of the global novel coronavirus (COVID-19) epidemic are to blame for the downturn in growth, Lahlimi told the media outlet. “Growth this year will witness the steepest drop in 20 years,†he confirmed.The HCP chief said climate change has impacted agricultural output this year, having a detrimental effect on the country’s economy.The agricultural sector accounts for 33% of Morocco’s national workforce and 13% of the country’s GDP. Drought is having a detrimental impact on the everyday lives of farmers, who are falling into debt as they turn to savings to survive, Lahlimi told Reuters.In 2019, lack of rainfall caused the agricultural sector to lose more than 85,000 jobs, HCP figures show.Meanwhile, Abdellatif Izem, Director of the Federation of Industrial Millers, predicts a massive drop in the country’s cereal output, with the sector producing as little as 3 million tons at worst. The 2019/2020 season in the Casablanca-Settat region saw a rainfall deficit of 78%, compared with the 2018/2019 season, prompting fears for farmers in the region. Head of the Regional Direction of Agriculture of Casablanca Settat (DRA-CS) Abderrahman Naili told Maghreb Arab Press (MAP) the area has experienced a drop in rainfall and increase in temperatures. The harsh conditions resulting from the change in climate are not favorable to crop and vegetable production. The average temperature in Morocco has increased by 0.5°C every year since 1970, exceeding the global average by nearly 0.15 degrees.In October 2019, the Intergovernmental Panel for Climate Change (IPCC) predicted the trend would continue.To counter the increasingly worrying effects of climate change, the Moroccan government launched a new national program for water. The $12 billion program came into effect on January 23 and aims to increase water supply through building dams ($6.4 billion), managing demand and developing irrigation systems for the agricultural sector ($2.6 billion), and securing the drinking water supply in rural areas ($2.8 billion).The Minister of Agriculture, Aziz Akhannouch, said the 2020-2027 national program will supply irrigation water to an overall area of 510,000 hectares in order to support 160,000 Moroccan farmers.The spread of the novel coronavirus will also have a negative impact on Morocco’s economic growth with the country losing tourist traffic, Lahlimi told Reuters.Though the North African country has only reported five confirmed cases of the virus and one fatality, the international spread of the disease has led to a global downturn in air traffic and travel. Last week, Media24 quoted sources from Royal Air Maroc (RAM) and the crisis cell at the Moroccan Ministry of Tourism warning that the country’s tourism sector would lose at least 100,000 in March alone.“We were on an upward trend with very strong double-digit growth in bookings compared to 2019 and today, our activity is, unfortunately, almost falling back to stability compared to the previous year,†a source at RAM told the news outlet. “If a remedy for the coronavirus is not found very quickly, it is already a given that we will lose several hundred thousand arrivals and at least one million overnight stays,†an anonymous source at the ministry’s crisis cell told Medias24.Morocco has already widened its currency trade band from 2.5% to 5% in an effort to counter the slowdown in economic growth, Lahlimi told Reuters. “By June only, we expect to have a clear idea of the impact of the dirham flexibility on dealing with external shocks,†he said. 

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