NMD, Proactive Financing Strategy Intended To Be Investment in Future (Official)

MAP - Publié le Jeudi 27 Mai 2021 à 15:27

Rabat - The expected output of the new development model (NMD) justifies a proactive financing strategy, which includes additional spending as investments in the future, the president of the Ad-hoc Committee on the Development Model (CSMD), Chakib Benmoussa said on Wednesday in Rabat.

Speaking at a press conference on the presentation of the Committee's report, Benmoussa noted that this strategy, which has a medium-long term perspective, addresses additional spending as investments in the future, taking into account the dynamic effect potentially generated by the NMD towards a virtuous cycle of growth. According to the CSMD report, presented on Tuesday to HM King Mohammed VI by Benmoussa, the reforms and projects proposed in the NMD will require additional public funding of around 4% of GDP annually in the start-up phase (2022-2025) and around 10% of GDP at cruising speed by 2030.

The issue of NMD funding is extremely important, noted Benmoussa, stressing that it is a fundamental determinant of the success of this major transformation project, especially in these times of the new coronavirus pandemic (Covid-19) which hit hard the economies of the world. Thus, this new development model, which requires the mobilization of substantial financial resources for its initiation and implementation, is based, in addition to public financing, on a strong mobilization of private investment capable of achieving its objectives, he said, welcoming the growing commitment of this sector in the investment effort in Morocco. The private sector, through its investments, can contribute to structural social transformation and greater job creation, Benmoussa said.

The CSMD president also noted that the short-term debt should be used to finance in a targeted manner the projects that promote structural development and medium-long term growth, in particular in the human capital and the structural transformation of the economy. "Today, our financing is mainly provided by the banking sector", he pointed out, highlighting the importance of diversifying the financing mechanisms (capital market, etc.) to create better conditions that are conducive to growth. In this sense, he indicated that resorting to debt could also be based on the opportunities offered by active debt management operations, as well as by the opportunities for concessionary financing and the financing mechanisms available within the framework of international partnerships. On the tax side, Benmoussa insisted on fair and efficient taxation, mobilized as a transverse lever in the service of development and oriented in favor of solidarity.

"We must be careful not to apply excessively high taxes to sectors open to global competition. The most protected sectors may be subject to broader taxes," he warned. In this regard, he highlighted the importance of the rules of transparency and the relationship of trust to be created between the tax system and the citizen, the objective being to achieve higher adherence to taxes and to ensure a fair contribution from all citizens. The CSMD president also insisted on optimizing the use of financial resources and their allocation according to priorities, calling for simultaneously creating the conditions of support for social programs and encouraging economic projects that participate in the transformation of the economy.

Furthermore, the Committee considers that the structural transformations proposed by the NMD will have "a positive impact on economic growth" and will allow the creation of additional resources to finance the proposed reforms, in particular if priority is given to high impact projects that are able to collect additional revenue, which in turn will be allocated to financing long-term projects requiring large budgets, according to Benmoussa.