American development fund grants $700m to Morocco

21/09/2007

Morocco moves closer to implementing a large grant from the US Millennium Challenge Corporation. The grant is intended to alleviate poverty and contribute to the country's development.

By Sarah Touahri for Magharebia in Rabat – 21/09/2007

[Sarah Touahri] The grant was finalized during a signing ceremony in late August.

Outgoing Prime Minister Driss Jettou chaired a meeting in Rabat on Wednesday (September 19th) to discuss the implementation of a five-year, $700m aid package the US Millennium Challenge Corporation (MCC) granted Morocco.

The grant, the group's largest to date, was finalized at a signing ceremony in Tetouan on August 31st, and will assist the Moroccan government in combating poverty and developing the national economy. The aid plan will stimulate economic growth by raising productivity and improving employment opportunities in certain key sectors, and aims to reduce poverty rates in target areas.

According to the government, the completion of the projects included within the programme will raise the country's economic growth rate by 1.1%, an increase in gross domestic product of $118m per annum and a 20% reduction in poverty levels by 2012.

In a press statement, Jettou explained that the Moroccan government had prepared the programme under MCC criteria through a series of consultations with local officials, residents in targeted areas, professional federations and other associations.

MCC Chief Executive Officer John Danilovich said the programme relies upon Morocco’s continued engagement in the comprehensive, dynamic plan it developed to combat poverty and ensure sustainable development. "We expect this operation to have a positive impact on the Moroccan economy," he said. "The programme will directly benefit 600,000 families. It was prepared by Moroccans themselves, and they have identified their own priorities in development, in accordance with the MCC’s principles."

The programme centres on five development plans: improving agricultural productivity, bringing small-scale fishing up to world standards, developing cottage industries, supporting revenue-generating activities and micro-credit, and supporting the programmes of the National Initiative for Human Development (INDH).

A total of $300.9m will be allocated to fruit tree projects covering several thousand hectares in various regions of the country.

More than $116m is earmarked for the modernisation of small-scale fishing activities, particularly the creation of some twenty seaside landing and reception points, and the creation of a network of protected marine areas.

The programme will also give $111.8m to promote a project called "The artisan and the Medina of Fez", to benefit from links between the crafts and tourism sectors and the cultural assets of the Fez medina.

The contract also looks to improve financial services offered to small businesses and to help micro-credit associations restructure themselves with a grant of $46.2m. Additionally, $33.85m will go towards a project to reduce unemployment among young graduates and to encourage entrepreneurial spirit. In particular, there will be support for the beleaguered Moukawalati programme. An additional $88.5m has been set aside for the monitoring and evaluation of all the projects.