Morocco UNITARY COUNTRY

AFRICA

Basic socio-economic indicators Income group - LOWER MIDDLE INCOME Local currency - Moroccan dirham (MAD)

Population and geography Economic data

AREA: - km2 GDP: 258 296 billion (current PPP international dollars)
i.e. 7 712 dollars per inhabitant (2014)
POPULATION: 33.493 million inhabitants (2014),
REAL GDP GROWTH: 2.4% (2014 vs 2013)
an increase of 1.4% per year (2010-14)
UNEMPLOYMENT RATE: 9.9% (2014)
DENSITY: 75 inhabitants/km 2
FOREIGN DIRECT INVESTMENT, NET INFLOWS (FDI): 3 582 (BoP, current
USD millions, 2014)
URBAN POPULATION: 59.7% of national population
GROSS FIXED CAPITAL FORMATION (GFCF): 32.2% of GDP (2014)
CAPITAL CITY: Rabat (5.77% of national population) HUMAN DEVELOPMENT INDEX: 0.628 (medium), rank 126
Sources: OECD, World Bank, UNDP, ILO

Territorial organisation and subnational government RESPONSIBILITIES

MUNICIPAL LEVEL INTERMEDIATE LEVEL REGIONAL OR STATE LEVEL TOTAL NUMBER OF SNGs

- - - -
Municipalities provinces Regions
(communes) (provinces) (rgions)

Main features of territorial organisation. Morocco is a constitutional monarchy, democratic and parliamentary. According
to the new Constitution (2011), the territorial organisation of Morocco is decentralised, and based upon an advanced degree of
regionalisation. Subnational governments include regions, prefectures (urban areas) and provinces (rural areas) and communes.
The new Constitution introduced elections for regional councils, which were formerly appointed by central authorities. Regional and
local elections held in September 2015 were an important step in the implementation of the deconcentration and decentralisation
process enshrined in the constitution of 2011.
Main subnational governments responsibilities. The 2011 Constitution introduces three types of local competencies: own
competencies, competencies shared with the central government, and competencies transferred by the central government :
Regional competencies include designing regional economic and social plans, environmental protection, vocational training, etc.
Provincial competencies include maintaining local roads, managing public transport, etc.
Local competencies include socio-economic development, urbanism and territorial planning, etc.
Transferred competencies include building and maintenance of hospitals and schools, and investing in infrastructure and equipment.
Competencies are transferred to regions, provinces or communes according to their level of importance (regional, provincial, local).
An advanced regionalisation process has been launched providing for the reinforcement of regional competences in the area of
economic and social development and corresponding resources (transferred and own).

Subnational government finance

% GENERAL GOVERNMENT % SUBNATIONAL
Expenditure % GDP (same expenditure category) GOVERNMENT
Total expenditure (2013) 3.7% 11.8% 100%
Current expenditure 2.4% - 64.5%
Staff expenditure 1.3% 11.1% 35.5%
Investment 1.3% 24.2% 35.5%
Morocco still has a low level of decentralisation, with SNGs playing a minor role in terms of provision of public services and investment.
Morocco is at the level of the most centralised countries of the OECD i.e. Chile, Greece, Ireland, New Zealand or Turkey (in terms
of spending indicators). This situation could evolve with the ongoing decentralisation process which will transfer new spending
responsibilities to SNGs. Although SNG roles in total public investment is weak, investment remains an important local function,
representing 35% of local expenditure. Staff expenditure also accounts for a relatively large share of SNG spending.
EXPENDITURE BY FUNCTION % SUBNATIONAL GOVERNMENT EXPENDITURE

General public services

defence
Security and public order
Economic affairs
environmental protection
Housing and Community Amenities
%
(No data)
Health
Recreation, Culture And Religion
Education
Social protection

Over 2009-13, 77% of expenditure on average was carried out by municipalities, in particular urban municipalities (55%) while the regional
and provincial levels undertook respectively 5% and 18% of subnational expenditure. Over the same period, 65% of investment on average
was carried out by the municipal level (43% by urban municipalities), 9% by the regional level and 26% by the provincial level. Priority areas
for investment are roads, utilities (water and electricity networks) and administrative buildings.

% GENERAL GOVERNMENT % SUBNATIONAL

REVENUE BY TYPE % GDP (same revenue category) GOVERNMENT
Total revenue (2012) 3.6% 15.1% 100%
Tax revenue 1.1% 5.7% 30.9%
Grants and subsidies 2.2% - 59.4%
Other revenues 0.4% - 9.7%
Subnational revenue comprises revenues transferred by the central government (54% on average over 2009-13), tax revenue managed
by central government (21%) and own revenues (18%, mainly own taxes and user fees). Municipalities represent the bulk of subnational
revenues (79 % on average over 2009-13), while prefectures and provinces represent 16 % and the regions, 5 %. However, in the
context of the regionalisation process and devolution of new responsibilities to the new regions, they should receive additional funding
in the near future.
tax revenue. Tax revenue comprises both own-source taxes and taxes managed by the central government and redistributed to subnational
governments (in more or less equal measure). Three-quarters of own-source tax receipts derive from six local taxes such as tax on port
activity, tourist tax, property tax (on urban land), construction tax, tax on allotments and tax on mining exploitation and port activity.
More than 90% of receipts go to the municipal level. Some taxes go to the regions and the provincial level. Taxes managed by the central
government are the residence tax (taxe dhabitation), municipal service tax (taxe des services communaux) and the local business tax
(taxe professionnelle). They benefit almost exclusively urban municipalities.
grants and subsidies. The major source of transfers from the central government to local authorities comes from the redistribution of national
taxes (30% of VAT, 1% of PIT and 1% of CIT). Over 2009-13, 69% of receipts on average went to municipalities (VAT, CIT and PIT, i.e. around 50%
of municipal revenue), 27% to the provincial level (VAT i.e. 90% of their total revenue) and 5% to the regions (PIT and CIT i.e. around 50% of
their total revenue). The organic law 111-14 provides for the progressive allocation of 5% of PIT and CIT receipts to the regions. Criteria for the
distribution of these funds to individual local governments include the amount of local staff salaries, population, land area, etc.
other revenues. Other revenues include property revenues, sale of assets, services fees, etc.

Outstanding debt % GDP % GENERAL GOVERNMENT

Outstanding debt (2013) 1.3% 2.6%

In order to finance investments, local governments are able to contract loans from the Municipal Equipment Fund (Fonds dquipement
communal, FEC), a major institution for financing local governments in Morocco. Projects funded through this organisation include
responsibilities such as urban infrastructure, roads, water and sanitation equipment, etc. Initial resources of the FEC were transfers
from the central government, but its funding resources have widened over time and now include grants from the World Bank, the
European Investment Bank, etc.

A joint- study of: Sources: OECD calculations from IMF data GFS Statistics Comit des rgions, projet ARLEM (2014) Cour
des Comptes du Maroc (Mai 2015) Rapport sur la Fiscalit Locale Trsorerie gnrale du Royaume du Maroc
(2013), Bulletin Mensuel de Statistiques des Finances Locales, Decembre 2013 Comptes Nationaux Provisoires
2013; Fonds dquipement communal, http://www.fec.org.ma/Textes/Loi47-06.pdf N. Boutayeb (2012):
Clarification des relations financires entre lEtat et les Collectivits territoriales Royaume du Maroc,
Commission Consultative de la Rgionalisation (2010): La rgionalisation avance au service du dveloppement
Publication date: October 2016 conomique et social C. Diop (2009): Autonomie Financiere des Collectivites Locales dAfrique http://
www.pncl.gov.ma/fr/Pages/default.aspx (2015).