World Bank approves US$500 million loan to support human capital in Morocco


The Executive Board of the World Bank today approved a US$500 million loan aimed at improving protection against health risks, childhood human capital loss, poverty in old age and risks of climate change. This is the first in a series of three operations supporting a government reform program that is also being funded in parallel by other development partners.

The combination of the COVID-19 pandemic and a two-year drought has plunged the Moroccan economy into a deep recession in 2020, leading to an increase in poverty. Morocco is gradually recovering from this crisis and recorded a solid growth rate in 2021. However, an unusually dry start to the farming season and the impact of the war in Ukraine on prices have put further pressure on the poor and vulnerable. Strengthening Human Capital for Resilient Morocco Development Policy Funding (DPF) aims to strengthen the health system by expanding and deepening health insurance, especially for the poor and vulnerable; increasing the availability of health workers; and adapting health services to better respond to health risks posed by climate change. With a focus on climate-vulnerable populations, this funding will also gradually generalize a system of adaptive family allowances for children, expand pension protections, and improve protection against extreme climate events.

“Moroccans have faced many shocks in recent years, including a global pandemic, climate change, inflation and droughts. This program will help Morocco generalize health insurance, introduce a vital family allowance program and better protect the population from risks, including those caused by climate change, said Jesko Hentschel, World Bank’s Maghreb country director.

The program is structured around three areas. The first aims to protect Moroccans, particularly climate-vulnerable populations, from health risks, with a focus on those caused by climate change. “This includes expanding compulsory health insurance (Assurance maladie obligatoire, AMO) coverage to approximately 11 million people and their dependents and supporting better alignment of the Medical Assistance Scheme (RAMED),” said Jorge A. Coarasa, World Bank senior economist and task team leaders.

Second, this funding will also support the harmonization of all child-oriented social protection systems into an integrated program of family benefits and their expansion, improve the alignment of family benefits and other systems through a unified social register, and introduce a new pension system for non-employed workers. “Transforming a series of fragmented programs into a climate-friendly, adaptive social protection system will help protect human capital development in childhood and better protect against the risk of poverty in old age,” said Mahdi Barouni, senior economist and co-task at the World Bank Team leader.

The third aspect will support the government to strengthen the institutional and coordination framework for disaster and climate-related risk management; the development of new mechanisms to protect vulnerable farmers from droughts and other extreme climate events; and providing relief for the effects of delaying rainfall during the 2021-2022 farming season.

“Climate change poses many challenges for Morocco. The country is already in a situation of structural water scarcity and rainfall levels have become increasingly erratic in recent years. It will continue to face climate-related shocks such as droughts, floods and heat waves,” which pose particular risks to women, youth and rural populations. This new funding will help increase Morocco’s climate resilience,” said Javier Diaz Cassou, World Bank senior economist and co-task team leader.


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