Morocco's public sector is facing significant financial challenges, with a projected debt of 399.1 billion dirhams by the end of 2026. Despite a royal directive in 2020 to reform and restructure public institutions, the sector continues to struggle with structural problems and increasing debt. The net profit of the sector has declined by 14% to 24.5 billion dirhams, with a return on equity of only 3.8% and a return on assets of 1.3%.
The public sector, which comprises 274 institutions and companies, has seen its debt increase significantly, with the top five entities accounting for 72% of the total debt. The Moroccan phosphate group, OCP, has a debt of 111.5 billion dirhams, while the National Office of Electricity and Drinking Water, ONEE, has a debt of 55.9 billion dirhams. The National Railway Office, ONCF, and the National Highway Company, SANEF, also have significant debts.
The report accompanying the 2027 finance bill highlights the challenges facing the public sector, including a significant increase in investments, which grew by 23% in 2026. However, the sector's ability to finance itself remains limited, with a self-financing capacity of 80.1 billion dirhams, covering only 64% of its investment needs. The report projects that investments will continue to grow, reaching 209.6 billion dirhams in 2026 and 209.2 billion dirhams in 2027.
The public sector's financial performance is also affected by the high cost of fuel, which has impacted the profitability of certain institutions, such as ONEE. The report notes that the institution's net loss widened to 6.96 billion dirhams in 2025, with an operating loss of 5.25 billion dirhams. The National Railway Office, ONCF, also recorded a significant net loss of 1.4 billion dirhams in 2026.
The Moroccan government remains a significant financier of the public sector, with transfers to institutions and companies reaching 72.9 billion dirhams in 2025, up 19.1% from the previous year. However, the report notes that the sector's reform process has been slow, with only nine of the 17 regulatory texts provided for in the framework law 50-21 having been adopted.
The report also highlights the need for further reforms to address the sector's structural challenges. The government has established a framework law to reform the public sector, but the implementation process has been delayed. The report calls for the acceleration of the reform process and the strengthening of the sector's financial sustainability.
The public sector's financial challenges have significant implications for Morocco's economy, with the sector's debt and profitability affecting the country's overall financial stability. The government must address these challenges through a comprehensive reform program that aims to strengthen the sector's financial sustainability and improve its performance.
Key points
- Morocco's public sector debt is projected to reach 400 billion dirhams by 2026.
- The sector's net profit has declined by 14% to 24.5 billion dirhams.
- The government has established a framework law to reform the public sector, but the implementation process has been delayed.
