Morocco secures $300m World Bank loan to fight unemployment

High-spending Morocco secured a $300 million World Bank loan to tackle youth unemployment and boost gender equality, extending a run of international borrowing as it battles fallout from the euro zone crisis.
The finance ministry said on Wednesday the funds would feed into a social development plan that aims to fight uneven access to basic amenities and the marginalisation of women and the country’s youth.
Youth unemployment stands at over 30 percent while illiteracy among women is above the national average and rises to as high as 80 percent in rural areas. Close to a quarter of the 33 million population live in poverty, according to state planning authority HCP.
The country’s central bank expects the North African state’s economy to grow by just 2-3 percent this year, one of the lowest rates of the past decade. The government is also struggling to tame a budget deficit that last year hit its highest level since the 1990s.
The well-being of the $95-billion economy is closely linked to the euro zone. The debt turmoil there has hit Morocco’s tourism revenues, remittances from workers abroad and foreign investments this year, raising concerns about the country’s current account balance.
On Tuesday, the Abu-Dhabi based Arab Monetary Fund (AMF) said it was arranging a $127 million credit facility for Morocco, a loan which officials in Rabat said would help cushion a rising trade deficit.
Earlier this month, the African Development Bank (AfdB) approved $800 million in loans to support Morocco’s renewable energy programmes.
Investment grade-rated Morocco also plans to sell a sovereign bond worth $1 billion in October to help finance budgeted investments.
In August, the International Monetary Fund (IMF) awarded Rabat a $6.2 billion precautionary credit line to support the current account balance when needed.
Morocco has budgeted 20 billion dirhams of foreign borrowing needs for 2012 in addition to 40 billion dirhams to be borrowed from the domestic market.
The country closed 2011 with a public debt to Gross Domestic Product (GDP) ratio of 52.9 percent.

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