With fewer than 200 deaths to date, so far Morocco has managed to curb the spread of the epidemic. Nonetheless, there is fear that a sharp rise in poverty is imminent.
Almost two months after the first reported case of Covid-19 on March 4, Morocco has largely succeeded in averting a serious health crisis.
Of the 14,500 tests carried out as at April 21, 11,300 negative cases and 3,209 positive cases were reported, with 163 deaths and 393 patients now recovered. In Morocco, the third worst-affected country in Africa after Egypt and Algeria, the mortality rate currently stands at 4.9%, compared with 2.2% in Germany, 12.8% in Italy and 14.6% in France.
How has the country achieved these results? The widely different scenarios in Asia and Europe, as well as the alarming situation in Italy, prompted the Moroccan government to implement a range of measures focused on preemption.
Firstly, a basic income payment scheme, effective as of early April for a period of three months, has provided an essential safety net for 810,000 workers in the formal sector who have lost their jobs. In addition, the country is equipped with large quantities of masks, manufactured by ten textile companies whose production has been brought into line with international standards.
Preemption: An Effective Solution to the Covid-19 Threat
Like a number of developing and emerging countries, the Moroccan government is aware that its healthcare system is not equipped to cope with a pandemic of this scale. At the beginning of March, its intensive care capacity consisted of 1,642 beds for a population of 35 million, with a ratio of 62 doctors and 90 nurses per 100,000 inhabitants (compared to more than 330 and 800 respectively in France), based on data from the World Bank. The Global Health Security Index tasked with assessing the capability of 195 countries to prepare for an epidemic, ranks Morocco 68th worldwide, and 4th in Africa, after South Africa, Kenya and Uganda.
The national strategy to combat Covid-19 is based on four key initiatives: monitoring and surveillance, treatment, governance and coordination, information and communication. The purpose of these measures is to achieve three objectives: prevention, detection and a response tailored to its healthcare system.
An Economic Watch Committee (CVE) was established on March 11, under the authority of the Ministry of Economy and Finance, comprised of key ministries, the Central bank and various business leaders.
The day after closing its borders on March 15, and at a time when only 28 cases and one death had been reported in the country, a second strategic initiative was then launched in the form of a Covid-19 Solidarity Fund, set up to finance emergency health expenditure, and, more importantly, implement economic support measures.
This fund has been financed through an appeal for donations, launched by celebrities and politicians: King Mohammed VI of Morocco has given 2 billion dirhams (€185 million), while several ministries have contributed via their respective companies. The European Union’s contribution accounts for 15% of the amount raised. This disbursement had already been set aside for Morocco, but was swiftly made available.
A third of this Fund, so far amounting to 3% of the country’s GDP, has been replenished by the State, 22% by state-owned companies and 13% by the private sector, with the remainder coming from a number of banks (10%), foundations and associations (10%) and donations from private individuals. It has already been used to purchase 1,000 intensive care beds, 550 ventilators, 100,000 sampling kits and 100,000 test kits, as well as other equipment.
A Race Against Time to Mitigate the Social and Economic Impact
On March 17 to facilitate access to credit, the Central Bank lowered its key interest rate from 2.25% to 2%, increased its lending capacity and relaxed prudential regulations, thereby making it easier for banks to refinance themselves.
Time is of the essence in the fight against this pandemic. Countries all over the world are in a race against time, and becoming increasingly inward-focused. On March 18, the CVE announced that, in the event of loss of employment or the shutdown of businesses, an indemnity of 2,000 dirhams (€185) would be paid to employees registered with the National Social Security Fund (CNSS), in addition to family allowance.
Households have also been granted the right to request payment deferrals on mortgage and consumer loans to their banks; the state is financing social security contributions over the next three months for companies that maintain employment levels of 80% or more; deferred payment of social security contributions is being offered to companies with employment levels of less than 20%, with other organizations being dealt with on a pro rata basis.
Companies are also entitled to suspend credit and leasing payments, and can benefit from an operating line of credit, known as “Damane Oxygène.” This mechanism has been put in place by banks and is underwritten by the State, to provide companies with working capital and to pay salaries. The operational implementation of these measures poses a number of issues, but these should be resolved over time, thanks to the pragmatic approach adopted.
Social protection measures are being extended to the informal sector, which accounts for about 40% of the total workforce, for households registered with the Medical Assistance Plan (RAMED). In mid-April, informal sector workers not yet registered with the RAMED scheme were given six days to do so, entitling them to financial assistance ranging from 800 to 1,200 dirhams, depending on their family situation.
Masks Produced Locally and Distributed Throughout the Country
In terms of healthcare, two Moroccan textile manufacturers have geared up to produce 10 million masks in record time. Ten other companies are adapting their production equipment to produce certified masks. Major players in the agri-food industry from across the entire country are handling the distribution of these masks.
These surgical-grade masks are being sold in packs of 10 and are available from 72,000 points of sale, at the modest price of €0.7 each. The Special Fund for the Fight against Coronavirus, which has been allocated €3 million (3% of GDP), is subsidizing the manufacture of these masks. This fund was established on March 15, five days before the lockdown began and the declaration of a state of health emergency.
In addition, healthcare workers are being isolated. Since March 24, nurses and doctors have been prohibited from returning home in order to help contain the virus. Rooms have been voluntarily offered to healthcare workers by private hotels as well as by the Caisse de dépôt et de gestion (Deposit and Management Fund), a state-owned financial institution which manages the country’s pension fund, and which owns various subsidiaries, including a number of hotels.
Large-scale testing began in early April. The authorities then took the decisive step to treat all infected patients (rather than just the most severe cases) with chloroquine and hydroxycholoroquine, demanding that the French group Sanofi, based in Morocco, sell its entire stock of Nivaquine (produced locally) and Plaquenil to the Ministry of Health. On April 7, the wearing of masks became a legal obligation for all citizens.
Averting the Threat of a Sharp Rise in Poverty
Since early April, the country has been in a position to consider lifting lockdown restrictions and find a way out of the crisis. A Decree-Law to increase foreign borrowing has been passed. Morocco is making full use of all the external financing mechanisms at its disposal, including the Precautionary and Liquidity Line from the International Monetary Fund of 3 billion US dollars.
Nonetheless, public health remains the primary focus of the national strategy. In line with the recommendations of the World Health Organization (WHO), efforts are now focused on contact tracing—with the search for a digital solution already underway—in combination with widespread testing and isolation of infected patients.
The stakes and the risks involved are high. In 2020, forecasts predict an economic recession in Morocco for the first time in twenty years. At the same time, this year’s low recorded rainfall is expected to have a negative impact on the country’s agricultural industry. According to the various estimates available at present, GDP growth is forecast at between -1% and -3.7%.
Avoiding an increase in poverty is essential, with many households in a precarious financial situation, in a country where the standard of living is twice below the poverty line. An ambitious financial stimulus package will thus be needed to mitigate the potential long-term effects of the crisis on the most vulnerable sections of society, and to address certain structural weaknesses in the Moroccan economy, which has still not fully recovered from the major financial crisis of 2008.
The opinions expressed on this blog are those of the authors and do not necessarily reflect the official position of their institutions or of AFD.