Accounts Court head calls for accelerated pension system reform as financial challenges multiply

Zineb Adoui, President of the Court of Accounts, has reiterated the urgent need for the government to accelerate pension system reforms. Speaking during a joint session of Morocco’s Parliament to present the Court’s 2023-2024 report, Adoui highlighted the institution’s 2013 recommendations calling for structural reforms following parametric adjustments.

She referenced a 2017 report by the Court that outlined strategic objectives and necessary conditions to ensure the sustainability of the pension system.

Adoui also drew attention to the critical financial situation of the Moroccan Pension Fund, which recorded a technical deficit of 9.8 billion dirhams by the end of 2023. The fund’s reserves, valued at 65.8 billion dirhams at the close of 2023, are expected to be depleted by 2028, according to data from the Ministry of Economy and Finance.

Adoui described the pension issue as one of the financial risks facing public finances, noting the government’s recent announcement to begin reforms this month. Addressing broader fiscal concerns, she emphasized the pressing need for investments, estimated at 143 billion dirhams for 2020-2027, to address growing financial strains and implement scheduled reforms.

She also noted significant financial requirements for reconstruction and aid programs in the Al Haouz region, which suffered earthquake damage. Spending in this area reached 9.5 billion dirhams by October 2024. Furthermore, the implementation of major social protection reforms is projected to cost 53.5 billion dirhams annually by 2026, with 38.5% funded by the state.

The President highlighted the substantial infrastructure investments required to prepare Morocco for hosting the 2025 Africa Cup of Nations and co-hosting the 2030 FIFA World Cup with Spain and Portugal. These events will demand significant financial mobilization for sports, tourism, and transportation infrastructure.

Public investment expenditures increased from 52.3 billion dirhams in 2015 to 119.2 billion dirhams in 2023. Adoui stressed the importance of maintaining public investment levels while ensuring efficiency, setting priorities, and fostering public-private partnerships to maximize returns and encourage private sector investment.

Adoui emphasized ongoing fiscal and institutional reforms as key to alleviating public financial pressures. She cited potential benefits, including increased public revenues and reduced state subsidies to public institutions, which exceeded 65 billion dirhams in 2023, compared to returns of only 16.8 billion dirhams.

The reform of the investment system, Adoui noted, is intended to boost private sector contributions to economic growth, easing public finance pressures and generating tax revenues to enhance the state budget and local authorities’ financial capacity.

She concluded by emphasizing the critical need to accelerate reforms to secure sustainable financing, address emerging needs in a timely manner, and establish stable funding sources, all while exploring innovative solutions to reduce fiscal pressures.