As part of its preparations to host the 2030 World Cup, Morocco is embarking on the largest investment program in infrastructure. However, a recent report by the International Monetary Fund has warned that the anticipated economic gains from this ambitious program are contingent upon efficient execution, cost control, and careful management of financial risks. DR ‹ › A recent International Monetary Fund report highlights infrastructure as a cornerstone of Morocco's development strategy, driving productivity, competitiveness, and economic integration since the mid-2000s. The analysis shows that improvements in both the quantity and quality of infrastructure, particularly in telecommunications and ports, have contributed nearly one-fifth of Morocco's productivity growth since 2005, outperforming averages in both the Middle East and North Africa and among middle-income countries. Benchmark comparisons place Morocco ahead on several quality indicators, including the liner shipping connectivity index. The Tanger Med Port has notably become the largest port in both the Mediterranean and Africa in terms of capacity. Infrastructure spending efficiency also improved significantly between 1980 and 2010, positioning Morocco ahead of many emerging markets. Looking ahead, Morocco plans to accelerate public investment in transport connectivity and tourism infrastructure, estimated at around 11.9% of GDP annually over the 2024–2030 period. These investments will target railways, airports, roads, as well as the construction and renovation of stadiums. The financing model relies heavily on domestic resources. Public enterprises account for the largest share (7.4% of GDP), financed through local and concessional foreign loans, followed by local governments (3.2% of GDP) via bank loans, and the central government (1.4% of GDP) through budget reallocations. According to the IMF's dynamic general equilibrium model, the baseline investment scenario could raise real GDP by 2% above a no-investment scenario by 2030, and by around 3% in the longer term, driven by productivity gains. Public debt is projected to increase by 7–8 percentage points of GDP by 2030 before gradually declining, supported by infrastructure usage fees and stronger economic growth. In the short term, higher interest rates may temporarily crowd out private investment, but this is expected to reverse in the medium term as productivity improves. Key risks on the horizon The report identifies four main risks that could affect the economic viability of these projects. The first concerns the efficiency of public spending. Simulations suggest that improving efficiency by 20% could boost long-term GDP growth to 3.5–4% without increasing debt, while a similar decline in efficiency would limit gains to 2–2.5%, underscoring that quality matters as much as quantity. The second risk relates to cost overruns. International experience shows that large infrastructure projects often exceed budgets by 20% to 50%. A 30% overrun scenario, the report warns, would generate no additional GDP gains while increasing public debt by 2–3 percentage points above the baseline by 2034. The third risk involves maintenance costs and contingent liabilities. The model assumes that post-2030 usage fees will cover both debt servicing and maintenance. Any shortfall, however, could create significant financial pressure, particularly as much of the debt is held off the government's balance sheet. The fourth risk concerns import leakage and tax financing. A large share of infrastructure investment, estimated at around 60%, is directed toward imports such as high-speed trains and airport equipment, limiting the domestic economic multiplier. Additionally, financing projects through higher consumption taxes rather than borrowing could temporarily weigh on household spending. The report concludes that while Morocco has made significant progress in infrastructure, particularly in ports and telecommunications, maximizing the opportunity presented by hosting the 2030 World Cup will require stronger public investment management. This includes improving spending efficiency, enforcing strict cost controls, integrating maintenance into budget planning, and closely monitoring the debt of public enterprises and local authorities, which, while not reflected in central government debt figures, pose real fiscal risks.
