Four billion deficit in CNOPS forces urgent reform discussions, says minister Fettah

The National Fund for Social Security Organizations (CNOPS) has been grappling with an unprecedented financial deficit, amounting to nearly 4 billion dirhams between 2021 and 2023, a shortfall primarily driven by a sharp rise in healthcare costs, which increased from 6.5 billion dirhams in 2021 to 7 billion dirhams in 2023, far outpacing the modest 3.4% annual growth in subscription revenues.

Finance Minister Nadia Fettah revealed that the deficit reached 1.5 billion dirhams in 2021, 900 million dirhams in 2022, and 1.28 billion dirhams in 2023, underscoring a troubling trend of growing financial strain within the system.

In response, the government has taken steps to address the situation, including a 2 billion dirham injection into the Moroccan pension fund (CMR) in 2022, aimed at mitigating the impact of these deficits, although this intervention has not sufficed to eliminate the underlying structural issues.

While the government has committed to reforming the pension system, a process that has already been delayed by three months from its original timeline, Minister Fettah confirmed that an “initial offer” for pension reform would be presented in January 2025, signaling a continued, albeit delayed, effort to overhaul the system, which will involve both public and private sectors in a bid to enhance governance and financial stability.

This delay is partly due to the complexities of the issue, but also reflects the broader challenge of addressing long-standing structural deficiencies in Morocco’s pension and social security systems, which have failed to adapt to changing demographic realities.

At the same time, the CNOPS has worked to improve the processing times for medical claims, reducing the average reimbursement time from 57 days in 2022 to 54 days in 2023, although persistent inefficiencies remain, particularly in the reimbursement of high-cost treatments.

The Progressive Socialist Party in Parliament criticized the slow pace of claims processing and the increasing out-of-pocket costs for patients, especially those suffering from chronic illnesses or lower-income public sector workers, who are unable to afford treatments in the absence of timely reimbursements.

The government is undertaking comprehensive reforms of public enterprises, with Minister Fettah noting that the public sector portfolio includes 271 entities, 228 of which are public institutions, and 43 are public companies, all of which are being targeted for governance improvements.

Key aspects of these reforms involve the introduction of new legal frameworks designed to tighten financial oversight, increase transparency, and, in some cases, privatize underperforming enterprises.

Among the most critical changes are laws aimed at improving the management and oversight of public institutions, including the creation of a central body for liquidating non-viable entities, which reflects the government’s broader strategy to increase the efficiency and effectiveness of state-owned enterprises.

Despite these ongoing efforts, both the CNOPS and the broader public sector face a number of systemic challenges, including rising healthcare costs, inefficient claims processing, and slow reform implementation, all of which point to the need for more substantial, coordinated efforts across all levels of government and society to ensure the long-term financial sustainability and operational efficiency of Morocco’s social security and public enterprise systems.