Wednesday, June 28

Morocco attempts to calm consumers

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Morocco is trying to allay fears about an increase in the cost of staples.

Media reports of “imminent price hikes after Ramadan” have Moroccans on edge.

Milk prices have already risen from 6.60 to 7 dirhams per litre. The central dairy co-operative blamed the hike on the producers.

The government is trying to reassure people. “The prices of bread and gas canisters will not rise,” Minister-Delegate for General Affairs and Governance Mohamed Najib Boulif said on Saturday (August 23rd).

“Any increase introduced by professionals without approval or a decision from the government will be regarded as a breach of the law,” he told the press.

As for the price of milk, the government official said that increases by co-operatives must be subject to a procedure governed by the law on the freedom of prices and competition.

He urged milk producers to “take into account the situation that Moroccans are in and reconsider this increase, which was adopted without the government’s agreement”.

The National Federation of Consumer Associations (FNAC) is considering legal action over the unilateral hike in milk prices, as the dairy co-operative did not consult with the government.

Many citizens are concerned that other producers may raise their prices the same way.

“The government must assume its responsibilities by negotiating with professionals who are going through a tough time due to the economic crisis,” economist Mehdi Fatmi said.

“Apart from products which are backed by the Subsidisation Fund, the market is free and governed by the forces of competition,” he added.

In his view, there will eventually be a rise in the prices of products covered by the Subsidisation Fund.

“Prime Minister Abdelilah Benkirane had underlined several times that the government would have to adopt painful measures. The long-awaited reform of the Subsidisation Fund will inevitably have an impact on consumers,” he said.

“The government will have to use a great deal of diplomacy to avoid an unexpected reaction from the public to the reform of the Subsidisation Fund,” sociologist Samira Kassimi said.

Consumer confidence was already falling, Kassimi noted.

According to a memorandum issued by the High Commission for Planning (HCP), the Household Confidence Index (HCI) over Q2 2013 was 6.5 points lower than the figure for the same period in 2012.

More than76 per cent of households expected the number of unemployed people to rise over the next 12 months, as compared with 72.4 per cent the previous quarter and 64.4 per cent a year earlier. Nearly 52 per cent of Moroccan households said that the time was not right to buy consumer durables.

In terms of perceptions of the financial situation, the HCP survey found that 58.4 per cent of households felt that their incomes covered their outgoings, but 35.9 per cent were getting themselves into debt or having to dip into their savings.

Only 5.7 per cent of households said they were able to save some of their

By Siham Ali in Rabat for Magharebia – 29/08/2013

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