Moroccan Lawmakers to Probe Banks in Bid to Overhaul Economy

Souhail Karam

(Bloomberg) -- Moroccan lawmakers will investigate the profitability of banks before switching focus to cement makers as the government seeks to rally companies behind its efforts to revamp the economy and spur growth.

Parliament’s finance and economic development commission will probably start meetings with the central bank governor, the finance minister and industry representatives from April, said Abdellah Bouanou, the committee’s chairman. It will aim to deliver its findings, which will include a probe of the state-owned pension-fund manager, before the end of the year.

Morocco needs “a new generation of reforms,” he said. “In order to give strong impetus to the structural transformation of the national economy, banks must be asked about their obligations and accomplishments.”

While Morocco has avoided the upheavals that other countries in the region have faced, its economy is struggling to meet rising social demands, beset by poor harvests and weak demand from its key markets in Europe. Scarce rainfalls and the coronavirus are raising concerns over yet another year of slow growth.

Banks were shoved into the spotlight when King Mohammed VI in October ordered lenders in the North African country to open the credit taps for entrepreneurs and small businesses. The monarch’s address to lawmakers caused the committee to review its priorities and move banks ahead of a planned probe into cement companies, which it plans to look into over allegations of high prices and anti-competitive behavior, Bouanou said.

In the document detailing the committee’s terms of reference for the probe, lawmakers contrasted the “high profitability” of banks with declining credit approvals and lower deposits, rising non-performing loans and worsening macroeconomic conditions.

Lawmakers are urging firms to set aside more money for “social and solidarity” projects, and better integrate the self-employed and the informal sector into the economy to “ensure social justice and a balanced distribution of wealth,” the document showed.

Focus will be paid to lending margins relative to the central bank’s benchmark rate, fees and commissions, the banks’ contribution to job creation, their commitment to fair competition as well as their social and corporate responsibility programs.

The committee also plans to investigate Caisse de Depot et de Gestion, which in recent years has financed several projects in the country, said Abdellatif Berroho, a member of the finance committee. An investigation by Morocco’s Audit Court found shortcomings with the state-owned pension fund manager’s investment policy and risk-management processes.

Hadi Chaibinou, the secretary general of a banking industry group, declined to comment. Bouchra Ghiati, a spokesman for a cement producers’ lobby group, declined to comment, saying the companies each need to comment individually. CDG spokesman Hatim Seffar could not immediately comment

To contact the reporter on this story: Souhail Karam in Rabat at skaram10@bloomberg.net

To contact the editors responsible for this story: Michael Gunn at mgunn14@bloomberg.net, ;Stefania Bianchi at sbianchi10@bloomberg.net, Vernon Wessels

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