Morocco-Germany Tensions Threaten $7.5 Million Aid Package for COVID-Hit Businesses

While the KFW, a German public bank active in Morocco in the field of financing economic activities, particularly in the energy sector, was considering releasing grants of nearly 75 million dirhams for the benefit of the participations of investment funds sponsored by the Caisse Centrale de Garantie (CCG), its Moroccan partner in the field of financing public-private venture capital vehicles, Morocco has cut ties with Germany.

Since then, this post-Covid-19 recovery line of the KFW intended to support about thirty Moroccan SMEs, including some participations of Seaf Morocco, PPP Fund, PME Croissance, Azur innovation and MNF II (the 5 investment funds concerned), seems compromised, notes Challenge. Moreover, the CCG in charge of granting this line on behalf of the KFW has frozen the operation pending any clarification and directives.

Nasser Bourita, Minister of Foreign Affairs, African Cooperation and Moroccans Residing Abroad, had sent an official letter on Monday, March 1 to the Head of Government and other members of the government calling on them to suspend "any contact, interaction or action both with its embassy in Rabat and with German cooperation agencies and political foundations" due to the deep misunderstandings with the Federal Republic of Germany on the fundamental issues of the kingdom. While Germany says it sees "no reason behind the disruption of diplomatic relations," Morocco is playing hardball.