Morocco reveals details of $500m loan from Saudi Arabia

Morocco has denied reports that Saudi Arabia has granted it a $500 million loan to pay the salaries and pensions of employees and former employees.

“The borrowing of $500 million is the activation of a previous agreement with Saudi Arabia as compensation to the government for the payment of the Eurobond loan,” the Minister of Economy and Finance, Mohamed Boussaid said in a statement.

“The loan has not yet been pumped into the fund, and nothing has to do with the reports being circulated. The government is not able to borrow to pay management fees,” Boussaid added. “The government pays more than eight billion dirhams ($0.85 billion) in salaries, which means that the amount of $500 million, which is equal to five billion dirhams, is not enough to pay even part of the wages for one month.”

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“The average balance of the country is supposed to be positive, meaning that the incomes would cover expenses, including wages, debt benefits and management expenses. If it stops at this point, the government will not have to borrow either from the international market or from the internal market, but as long as there are expenses other than ordinary expenses, including investment expenses and debt expenditures which we are supposed to pay to the lenders, the government is forced to borrow,” he stated.