World Bank lends Morocco $400 million to support welfare plans

FILE PHOTO: People stand near an empty street with closed shops in the old city, following the coronavirus disease (COVID-19) outbreak in Rabat, Morocco March 23, 2020. REUTERS/Youssef Boudlal/File Photo

RABAT (Reuters) - The World Bank said on Friday it has approved a $400 million loan in support of Morocco’s reforms to strengthen the safety net for poorer households following the coronavirus pandemic.

The funding will support social assistance programmes including emergency cash transfers set up by Morocco through a special COVID-19 fund, the World Bank said in a statement.

Unemployment is expected to surge to 14.8% in 2020 from about 9.2% before the pandemic, the planning agency has said.

More than a third of Moroccan workers already work in unregistered businesses without social protection, doing manual labour or selling in the streets, accounting for 14% of GDP, according to the agency.

Morocco has announced a plan to reform social security in five years to guarantee health insurance, retirement pensions and unemployment compensation for everyone.

Morocco’s economy is expected to contract by up to 7% this year, the International Monetary Fund said.

Government debt is set to surge to 76.1% of GDP in 2020 from 65% in 2019, the Central Bank said.

Reporting by Ahmed Eljechtimi; Editing by Alison Williams