Morocco reassures industry amid price hikes

Magharebia

[Hassan Benmehdi] Moroccan Minister-Delegate for General Affairs Mohamed Najib Boulif recently attended a meeting of business leaders to listen to their concerns over price indexing.

By Hassan Benmehdi in Casablanca and Siham Ali in Rabat for Magharebia – 27/09/2013

The rising cost of petrol products stirs business anxiety.

Moroccan industry leaders are concerned that the new indexing system for petroleum products will hurt their bottom line.

A fortnight after adopting the index-linking protocol, the government had to deploy officials and experts to explain the decision to business leaders.

The first such meeting was held in Rabat on Tuesday (September 24th).

“The various players in the industrial fabric of the country expressed their concern about the indexation system which has been adopted, but at the same time they set out their own visions and solutions to ensure their competitiveness,” Mohamed Najib Boulif, the minister-delegate for general affairs, told Magharebia at the Rabat conference.

David Toledano, chairman of the National Construction Materials Federation, stressed that businesses were struggling to remain competitive.

“Within our sector, many companies use energy, which means that rising oil prices have an automatic impact on their competitiveness,” he told conference attendees.

According to Central Bank chief Abdellatif Jouahri said that the partial indexation of prices for certain oil products would have a 0.2 per cent impact on inflation in 2013.

“If oil prices rise above the 120 dollar level internationally, then the state has signed up to external protection so that it can negate any impact on prices in Morocco,” he reassured his audience.

Benkirane’s government hopes to support the public’s purchasing power, to control spending on benefits and bring in support plans to help certain sectors, such as transport. Nevertheless, many remain concerned about the price indexing.

Thousands of demonstrators marched through Rabat on Sunday to denounce the decision to index oil products to the world price and to warn against the erosion of the public’s purchasing power.

The rally was called by the Istiqlal party. The party’s secretary-general, Hamid Chabat, said they were “prepared to organise further marches and adopt other forms of protest”.

Abdelkader El Kihal, the secretary-general of the party’s youth wing spoke in similar terms. He said his party already presented alternatives to indexation, notably the organisation of a national campaign against tax evasion, or the cancellation of a number of superfluous public expenditure programmes.

Representatives from a number of political parties responded positively to Istiqlal’s call. Habib El Malki, one of the leaders of the Socialist Union of Popular Forces, said it would have been much wiser to open up a debate on the issue of reforming the compensation fund in order to increase awareness and achieve a satisfactory outcome through a national debate built on a consensus.

Hauliers, meanwhile, decided to stage a 72-hour strike from September 23rd to vent their anger.

Economist Mehdi Chatibi said the government needed to implement a global approach to reform the compensation fund and minimise the impact on the public’s purchasing power. He said it was essential to restart the social dialogue both with business leaders and with the unions to reach a consensus.

He added the government would benefit from working more on the fiscal sector, widening its range of tax concessions, tightening controls and urging businesses to pay their fair share.

Among the public, there is much apprehension.

Fatiha Maddihi, a 38-year-old housewife who took part in the march on Sunday, said that the government should do more to safeguard the public’s purchasing power, which is being eroded more and more, particularly among the middle class.