University Finance Report: Effects of COVID-19 on the Moroccan Economy

This report analyzes the impact of the COVID-19 pandemic on the Moroccan economy, addressing challenges faced by companies, currency reserve issues, GDP decline, and poverty. The report, written from the perspective of the Moroccan finance minister, examines the disruption in manufacturing, service, port, and tourism sectors. It explores the importance of hard currency reserves and the government's measures to manage fiscal deficits, including loans and international financial assistance. The report also discusses opportunities for economic restructuring, monetary policy adjustments, and strategies to mitigate the aftermath of the crisis, such as widening currency fluctuation bands. The analysis draws on academic sources to support the arguments and provides insights into the economic resilience strategies adopted by the Moroccan government during the crisis.

Running head: EFFECT OF COVID-19 ON MORROCAN ECONOMY
Effect of Covid-19 on Morrocan Economy
Name of the Student
Name of the University
Author Note

1EFFECT OF COVID-19 ON MORROCAN ECONOMY
Table of Contents
Question 1..................................................................................................................................2
Question 2..................................................................................................................................2
Question 3..................................................................................................................................3
Question 4..................................................................................................................................3
Question 5..................................................................................................................................4
Reference....................................................................................................................................5

2EFFECT OF COVID-19 ON MORROCAN ECONOMY
Question 1
After the World War II no country in the world faced such a huge economic crisis for
the effect of COVID -19 epidemic. The entire financial market in the world faced a huge
shock from this diseases and the morocco is not an exception. As due to this diseases the
government has to stop all the activities that are related with the manufacturing sector or the
service sector, all the companies in these sectors suffered heavy financial losses. All the
companies be it small, large or medium scale has to suffer for this economic crisis that occurs
due to COVID-19. The port sector and the tourism sector faced the highest loss as the entire
transactions with the foreign countries get interrupted due to this pandemic (Ait Add et al
2020). The main challenges that the companies faces are
 Non availability of labour
 Inadequate supply of raw material
 Absence of proper transportation
Question 2
 Reserving hard currency is required in this critical situation as this will help the
country to manage the fiscal deficit and protect the country from acute financial crisis.
 If there is a short of hard currency in the economy of a country it means that the
country is not capable to maintain long term stability and the purchasing power, it will
also effect country’s political and fiscal condition.
 To control the situation of controlling the reverse of the hard currency the Moroccan
government decided to close its import for 5 and a half months.

3EFFECT OF COVID-19 ON MORROCAN ECONOMY
 The government can also manage the situation by recourse to the international
financial market or the fund provided by the international monetary fund.
Question 3
 Beside the problem of hard currency the Moroccan government also face the problem
of fall in GDP, there will be budget deficit which will rise to more than 6% of the
GDP, and more than 10 million Moroccan people will fall into poverty.
 To manage these problems the government has taken several strategic actions like
taking a $275 million loan to solve the economic crisis and to make up the fiscal
deficit. Financial assistance from the international monetary fund will also help the
government of morocco to tackle this situation (Abodunrin Oloye & Adesola 2020).
Question 4
 The government will get the opportunity to restructure the entire economy again by
taking new monetary policy which can provide new opportunities for the different
industrial sectors of this country. Beside that the fund that the country will get from
various international organisation will enhance the liquidity condition of morocco
(Hassan et al 2020).
Question 5
 To control the aftermath of the economic crisis the Moroccan government decide to
widen the fluctuation band of the currency from 2.5% to 5% this will reduce exports
and make import cheaper and will reduce the budgetary deficit and can help the
country to protect its economy from the adverse effect of the external shock
(Abodunrin Oloye & Adesola 2020).

4EFFECT OF COVID-19 ON MORROCAN ECONOMY

5EFFECT OF COVID-19 ON MORROCAN ECONOMY
Reference
Abodunrin, O., Oloye, G., & Adesola, B. (2020). CORONAVIRUS PANDEMIC AND ITS
IMPLICATION ON GLOBAL ECONOMY. INTERNATIONAL JOURNAL OF
ARTS, LANGUAGES AND BUSINESS STUDIES, 4.
Ait Addi, R., Benksim, A., Amine, M., & Cherkaoui, M. (2020). COVID-19 Outbreak and
Perspective in Morocco. Electron J Gen Med. 2020; 17 (4): em204.
Hassan, T. A., Hollander, S., van Lent, L., & Tahoun, A. (2020). Firm-level Exposure to
Epidemic Diseases: COVID-19, SARS, and H1N1. SARS, and H1N1 (April 2, 2020).
World Health Organization. (2020). Coronavirus disease 2019 (COVID-19): situation report,
70.