Businesses affected by the crisis have requested extensions for banks (41.8% of respondents), tax (37%) or deposit (33.7%) payment deadlines. Nearly 23% of the companies surveyed requested all three extensions.
The businesses surveyed fear the loss of 165,586 jobs, or 55.11% of their workforce. Businesses that have recorded a drop in turnover of more than 50% fear the loss of 100,000 jobs. The survey points out that 39.2% of companies are in temporary shutdown and 88% have resorted or are likely to resort to temporary shutdown. Most companies expect a gradual recovery from June onwards, but turnover, to varying degrees, will remain impacted throughout the year. Those most affected over time appear to be tourism, real estate and then textiles.
Are the decision-making bodies already thinking about the future? What exit strategies are being considered? What are your recommendations in this regard?
There is still a lot of uncertainty as to when this crisis will end. The date will be neither global nor immediately after the end of the health crisis. Moreover, this ending of the crisis is not yet fully visible. Many uncertainties about the economic cost that the country will have to bear in the medium term remain. In spite of these uncertainties, the Monitoring Committee has begun its first reflections on the exit strategy, its modalities, its means, the coherence of the sequences of articulation between the short and medium term, etc. The Committee has also begun to examine the possibility of a new approach for the country's economic development.
The Committee's initial reflections indicate that an exit plan from the crisis will be announced shortly. Scenarios are being developed, taking into account the sectors’ capacity and speed of recovery, the financial health of companies, priorities, etc. The Committee will have to decide on a series of actions and trade-offs: which sectors should be given priority? Which are those related to covering demand for essential needs (food, health and transport in particular)? Which can respond to the recovery of external demand and are able to help rebuild the foreign exchange reserve portfolio?
Beyond the ranking of priorities, mobilizing action levers in an effective and optimal way is a crucial aspect of the Committee's agenda. A stimulus induced by supporting household demand and by encouraging supply through investment must be considered. In this challenge, the question of sustainable financing is crucial. Recovery through budget and public procurement will be confronted with the reduction of regular resources, a widening budget deficit and a tolerable debt threshold. Parliament has authorised the government to exceed the debt ceiling in the 2020 budget law. The use of the precautionary and liquidity line (amounting to 3 billion dollars to be repaid over a period of 5 years, with a grace period of 3 years) negotiated with the IMF at the end of 2018 will make it possible to mitigate the effects of this crisis, and to preserve foreign exchange reserves, thereby consolidating the confidence of foreign investors and of Morocco's bilateral and multilateral partners. This insurance against extreme shocks does not affect the level of public debt. Nevertheless, if the budget deficit exceeds a sustainable norm, it will be necessary to finance the debt through other lines of credit from financial institutions, or to resort to the capital market without falling into a restrictive conditionality regime that would call into question the country's financial sovereignty.
The other financing option is linked to the capacity of the Moroccan banking system to provide the necessary liquidity to companies which, beyond their cash requirements, are likely to face a solvency crisis requiring a strengthening of their balance sheet In this challenge of credit financing, the national financial system, which has proven its financial soundness, will be faced with the need to support businesses with greater imagination and responsiveness, less conditionality on guarantees and rigidity in the release of resources, while ensuring that its financial stability is preserved.