The recent announcement by the Moroccan government that it will cut subsidies on some energy products reflects the authorities’ commitment and political capacity to implement structural reforms, Fitch Ratings says. Subsidy reform should allow for continued deficit reduction, and augurs well for potential renewal of IMF assistance later this year. The reform of government-financed subsidies is a key part of Morocco’s deficit reduction strategy. Subsidies accounted for MAD 53 billion ($6.4 billion) in 2012 (6.4 percent of GDP) and MAD 43 billion in 2013. According to government estimates, the new cuts will help further reduce the cost of subsidies to MAD 35 billion in 2014 (3.7 percent of GDP). [Reuters]

 

Morocco needs to build on the progress it has made on public financial management reform by repositioning its revenue and spending to better support economic growth and inclusiveness, the IMF has said. Following its third review of Morocco’s economic performance under the Precautionary and Liquidity Line, the IMF said important measures had been taken to reduce the North African country’s fiscal vulnerabilities and to give the economy greater resilience. Recommended changes to be implemented this year and beyond included broadening the tax base, a review of tax incentives and exemptions, moderating the public sector wage bill and pension reform, the IMF said. [Press Release, PFI]

 

When Egypt announced plans for a minimum wage late last year, the government hoped to lift living standards and calm street turmoil that has helped topple two presidents in three years. Although one in four Egyptians lives below a poverty line of $1.65 a day, many workers say the EGP 1,200 ($170) minimum wage introduced in January is too little too late in a nation whose rulers have long favored the elite over the poor. The minimum wage applies to 4.9 million public employees and will cost the state an extra EGP 18 billion a year, swelling a budget deficit set to hit around EGP 200 billion this year. [Reuters]

 

The Yemeni Fund for Small Industries and Enterprises in a recent report said it financed 2,942 projects in 2013 through loans of more than 1.8 billion riyals ($8.1 million). Of these projects, 613 are in the manufacturing sector, 865 are in services, and 1,464 are in commerce. The high demand for loans for commercial projects is mostly due to the relative ease of starting small businesses such as grocery shops, restaurants, car mechanic workshops and sewing factories. [Al-Shofra]

 

 

 

 

Egypt forecasts gas shortage next fiscal year | Ahram

Egypt: Economic file on top of agenda of Fahmy’s talks with EU officials | SIS

El-Beblawi in Saudi Arabia to discuss economic ties, investment | DNE

Cash stipends to cover 2-3 million poor families in Egypt | Ahram

Demand for Egyptian labor dropped in December: Cabinet | Cairo Post

Egypt business activity declines in January | Reuters

PM briefs IMF official on Jordan’s reform program | JNA

Conference on competitiveness of Libya economy held in Tripoli | Libya Herald

Slight increase in unemployment rate in Morocco: HCP | MWN

Opinion: Tunisia’s CPG cannot alone deal with regional unemployment | AfricanManager