Navigating Challenges on Morocco's Path to Reform State-Owned Enterprises

Thursday 21 December 2023 - 10:35

Morocco embarked on an ambitious journey to reform its state-owned enterprises (SOEs) in 2018, aiming to streamline the public portfolio and enhance fiscal sustainability. However, the country faces persistent challenges, as revealed by the annual report from the Audit Court.

The progress of the public-private partnership process, a cornerstone of the reform, has been hindered by a lack of clarity regarding the targeted size and composition of the SOE portfolio. This absence of a clear vision impedes the establishment of a precise roadmap for the restructuring initiative, according to the Audit Court report.

Strategic dialogues with key SOEs have fallen short in articulating the anticipated vision, contributing to uncertainty surrounding the reform trajectory. Moreover, delays in appointing independent administrators to the newly established National Agency for Strategic Management of State Holdings (ANSPE) further impede progress, despite the adoption of crucial resolutions.

Notably, no entity under ANSPE supervision has transitioned into a joint-stock company, as mandated by law. The operationalization of the Mohammed VI Investment Fund hinges on the completion of administrator nominations and asset manager selection procedures. The imminent announcement of sector-specific funds, spanning agriculture, industry, tourism, and infrastructure, adds anticipation to the unfolding developments.

In light of these challenges, the Audit Court report emphasizes the urgency of expediting key aspects of the reform. Recommendations include swift decisions on the configuration of non-commercial SOEs, multi-year planning for necessary actions, and finalizing the board and committee compositions of ANSPE.

Crucially, the report underscores the importance of commencing the transfer of state holdings to ANSPE, paralleled by an accelerated implementation of restructuring for commercial SOEs. Additionally, it calls for the prompt development of strategic guidelines for the state's shareholder policy, coupled with the conclusion of asset manager selections and sectoral fund launches under the Mohammed VI Investment Fund.

As the reform initiative enters its sixth year, overcoming these obstacles is paramount to realizing its full potential and establishing a more sustainable SOE framework aligned with Morocco's development objectives. The onus is on policymakers to expedite progress on this challenging yet crucial journey. All eyes are turned towards them as they navigate the complexities of the road ahead.