Morocco Maintains Food Subsidies Despite Budget Cuts in 2021

Butane as well as basic food products including soft wheat flour and sugar will benefit from 12.5 billion dirhams for the 2021 Finance Bill, according to LesEco, specifying that pending the operationalization of the Unified Social Register (RSU), these three products will be financed for the next fiscal year.

The government’s roadmap is focused on the reorganization of compensation exchanges towards social protection programs, in a context where the market trend of the three products has faced difficulties since the beginning of 2020, in terms of supply and exchanges, due to the health crisis. The government has been particularly interested in the drop in costs, despite changes in international prices. With the resumption of economic activity last June, the financing of the butane gas cylinder had been relaunched.

Regarding domestic consumption, the government has emphasized the great availability of butane gas, "allowing final consumers to acquire this product at one of the lowest prices in the world". The cost of the gas subsidy was 6.9 billion dirhams in the first three quarters of 2020, according to the same source.

As for sugar, national consumption has fallen by 1%, said Mohamed Benchaâboun to the finance committee in the House of Representatives. In the first months of 2020, the monthly national consumption had increased by 22%. As for soft wheat, the purchase price is maintained at 280 DH/quintal. Thus, the compensation cost of flour has fallen by 10% in the last two years. Not to mention that the drop in soft wheat prices has facilitated the use of the import restitution system.