Moroccans feel pinch of rising food prices

21/03/2008

Morocco is experiencing a purchasing power crisis. As the cost of food continues to mount, Moroccan households are calling on the government to take steps to curb the eye-popping prices.

By Sarah Touahri and Hassan Benmehdi for Magharebia in Rabat – 21/03/08

[Sarah Touahri] Moroccan Economy Minister Nizar Baraka said last week that Morocco is experiencing a purchasing power crisis. Government efforts to help are ongoing, but another minister said, "We can’t cut Morocco off from the rest of the world."

Runaway increases in the prices of staple food items are causing concern for Moroccans. The last few days have seen unprecedented hikes in the prices of basic necessities like oil, semolina, butter, flour and milk. Whether the price hikes are attributable to local speculation or to an international elevation in the cost of commodities, consumers want the government to intervene.

"The prices of a lot of items have gone up. Oil has risen from 9 to 14 dirhams per litre; a kilogram of couscous has gone up from 6 dirhams to 10 dirhams; and a kilogram of semolina has risen from 4.80 to 7.70 dirhams. The price of butter has almost doubled, shooting up to 60 dirhams from barely 33. There’s nothing we can do about the international situation," explained tradesman Samir Mellakh.

Minister of the Economy and General Affairs Nizar Baraka conceded at a press conference last week that Morocco is currently experiencing a purchasing power crisis. He said that the upward price trend is due to several factors, namely a fall in state subsidies on household goods, deregulation of prices, VAT rises for certain items and the international economic situation.

The hikes are hurting Moroccan households. Teacher Karima Lhaddad told Magharebia that she has felt the impact on her purse in recent months: "Prices are reaching record levels. I can’t buy the same amount of food that I used to. My shopping basket is getting emptier from one day to the next. I’ve had to make a lot of sacrifices to get through this month without any financial problems."

To compound the problem, incomes are not keeping up with inflated prices, explained sociologist Mohammed Rahmani. "The middle classes are unable to keep pace with the price rises, with salaries remaining almost unchanged. A few years ago teachers could live comfortably but now they are struggling to stay out of debt," he told Magharebia.

Parliamentarian Abdelmounaim Geussous faults the uneven distribution of national resources: "The Moroccan public has been unable to benefit from the development we’re seeing today in a lot of sectors of the economy, which means we need to revise our social policy," he noted.

Whatever the reason for the rising food costs may be, Moroccans are looking for a solution. As their purchasing power declines, they are calling on the government to take steps to assist them. The government, meanwhile, highlights the fact that there have been no price increases in state-subsidised items (petroleum products, sugar, wheat and sunflowers). The higher costs, officials say, are in unsubsidised food items which are subject to fluctuations in world markets, such as salad oil and butter.

Minister for Public-Sector Modernisation Mohamed Abbou said, "The government is aware of the situation and is trying to safeguard the prices of subsidised items. However, we can’t cut Morocco off from the rest of the world."

Several measures have been taken to mitigate the problem: instituting price controls, curbing price fraud, ensuring prices are displayed in order to stop traders from engaging in speculation and obliging producers to print prices on the packaging of subsidised items.

The El Fassi government is also proposing a "new social pact", made up of three components: strengthening job creation, implementing price controls, particularly with regard to food items, tackling poverty and job insecurity.

In the meantime, trade unions are calling for a minimum monthly wage of 3,000 dirhams in order to bolster workers’ purchasing power.