Earthquake-struck Morocco to spend nearly $12 billion on recovery

By Souhail Karam

Morocco expects to spend 120 billion dirhams ($11.7 billion) to rebuild and develop areas rocked by the earthquake earlier this month that killed nearly 3,000 people and highlighted inequalities in some of the worst-hit regions. 

The Sept. 8 quake, the strongest to hit the North African kingdom in 120 years, also left 300,000 without shelter in the mostly poor regions of the High Atlas mountains and the key tourist magnet Marrakech.

The reconstruction costs would be spread over five years, the royal cabinet said in a statement following a meeting with government officials and the nation’s ruler, King Mohammed VI.

The king urged officials to ease the isolation of the affected territories, which have had limited access to basic services, and “speed up the reduction of social deficits,” the statement said, adding the plan will cover six provinces and target a population of 4.2 million.

The average annual cost of the five-year plan, or roughly $2.3 billion, is equivalent to a little less than 2% of the country’s gross domestic product, according to Bloomberg calculations. Before the quake, Morocco was targeting output growth of 3.4% this year, and planning to trim its budget deficit from 4.5% of GDP to 4% next year.

Funding for the reconstruction will come from the government budget, local authorities, donations, international aid and a special fund for the management of earthquake’s effects.

The fund will get 2 billion dirhams from the state-owned King Hassan Development Fund, the statement said, bringing the fund’s total to around 9.3 billion dirhams.

The quake struck a few weeks before Marrakech hosts the annual meetings of the International Monetary Fund and the World Bank, which is expected to augment much-needed tourist spending. Separately, the IMF agreed to lend Morocco $1.3 billion to strengthen the country’s resilience to climate risks.