Yesterday in Rabat the European Investment Bank presented a study on long-term private savings in Morocco and how to optimise and tap them in order to create growth. This study was financed by FEMIP – the Facility for Euro-Mediterranean Investment and Partnership – the EIB instrument targeting the Mediterranean region, which since 2004 has been provided with a trust fund serving to finance studies of this kind on the basis of grants from 15 EU Member States and the European Commission. Fostering a deeper understanding of the challenges facing the partner countries forms part of FEMIP’s role and makes it possible to customise financing strategies. This study is available on the EIB’s website: www.eib.org/ publications.
A detailed overview of the make-up, origin and performance of private savings in Morocco
Key figures: in 2005, financial savings amounted to 109 billion Moroccan dirhams, corresponding to 84% of gross national savings, 28.3% of GDP and 91% of investment. Although the situation has substantially improved since 2000, this is mainly due to remittances from Moroccans living abroad. Furthermore, 70% of these financial savings consist of liquid assets and non-interest-bearing short-term investments (sight deposits), which chiefly benefit banks.
Recommendations for concrete measures to improve the mobilisation of savings
To achieve or exceed an average growth rate of 6%, there is a need not only to boost savings – especially domestic savings – but also to change their structure by extending their maturity. The study therefore advocates strengthening competition in the financial sector, creating a more favourable tax environment and removing certain regulatory constraints on the development of capital markets. It also underlines the facts that the existing instruments are not necessarily geared to the needs of the poorest segments of society and that the pensions system is still inadequately developed.
Lastly, the study envisages various possible avenues for EIB support. These consist in particular of promoting investment by developing bond issuance by medium-sized businesses; securitisation in the financial, industrial and public service sectors; guarantee facilities; equity participation; and technical assistance.