Irrigation investments in Morocco could limit GDP losses by whopping 60%, IMF

Investments in water infrastructure could save up to 60 percent of Morocco’s GDP losses, found the International Monetary Fund (IMF) in a recent report titled “Feeling the Heat: Adapting to Climate Change in the Middle East and Central Asia.”

Investments in irrigation could also help address the gap between water demand and supply in the agriculture sector, reduce the rise in public debt, and provide margins for financing relief measures in the post-disaster period, said the report, asserting that GDP losses could be limited to a minimal 1%.

The report found for example that the compounded effects of the 2007 global food price crisis and the 2007 Moroccan drought have more than tripled food import expenditures relative to 2006.

“With increasing drought risks, proactive adaptation investment is thus crucial to reduce both the depth of drought impacts and the fiscal needs associated with government responses,” it said.

The agricultural sector in Morocco employs more than 30% of the labor force in Morocco, and contributes about 12% of the gross domestic product, according to the figures for the year 2020.

The report said that only 10 percent of Morocco’s arable land is equipped with irrigation systems, so dry seasons have caused losses in Gross Domestic Product of about 1.2 to 7.6 percent in the past three decades.

The International Monetary Fund warned that climate change and the resulting drought could lead to food security concerns, and called on countries to invest in water infrastructure, particularly dams and irrigation systems, to reduce the impact of drought on macroeconomic performance.

Climate change bears a particularly heavy burden on countries of the Middle East and Central Asia, as well as those that suffer most from rising temperatures and extreme weather events.

The financial institution recommends that the countries of the region adopt climate adaptation policies in light of expectations that the seasons of the year are likely to become drier in the Middle East and North Africa, and rainfall is more variable, which increases the possibility of drought waves.