Announcement of Morocco to Implement Second Phase of Agricultural Reforms on November 25, 1987

/ FOR IMMEDIATE RELEASE 'NorldBank 1818 H Street, N.W., Washington, n.c. 20433, U.S.A. BANK NEWS RELEASE NO. 88/21 Contact: Fawzi Rihane (202) 473 2675 MOROCCO TO IMPLEMENT SECOND PHASE OF AGRICULTURAL REFORMS I )i'l WASHINGTON, November 25 -- Morocco is pursuing its adjustment efforts in the agricultural sector with a project that will finance a two-year second phase of the adjustment program. The World Bank is supporting the program with a $225 million loan. The program includes a series of measures that will create a more favorable environment for overall economic growth at a time of severe resource constraints. In particular, liberalization of the agricultural and food pricing, marketing and trade regimes, combined with the restructuring of public expenditures, is expected to make the sector a more efficient producer of import-substitutes and export products, and will lead to substantial fiscal and foreign exchange savings. The program also seeks to impr·ove income distribution in the agricultural sector while adequately protecting the urban and rural poor. This, in turn,· is expected to foster efficient agricultural growth and contribute to the reduction of budgetary and current account deficits to manageable levels, while minimizing the social costs of adjustments. Foreign exchange provided by the World Bank loan will finance imports needed to stimulate agricultural production. These include fertilizers, pesticides, seeds, animal feed, cattle for genetic improvement, fuel, agricultural machinery, spare parts, and veterinary medicines. The first phase of agricultural reforms was supported by a $100 million World Bank loan approved in June 1985. Total World Bank and International Development Association lending to Morocco has amounted to almost $3.6 billion in support of 88 development projects. International Finance Corporation investments have totaled $94 million for 12 operations. The World Bank loan is for 20 years, including five years of grace, with a variable interest rate, currently 7.76 percent, linked to the cost of the Bank's borrowing. It also carries an annual committment charge of 0.75 percent on undisbursed balances. Note: Money figures are expressed in U.S. dollar equivalents.  - 2 - The World Bank loan is for 20 years, including five years• grace, with a variable interest rate, currently 7.76 percent, linked to the cost of. the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on the undisbursed balances. The IDA credit is for 35 years, including 10 years of grace; it carries no interest, but has annual charges (0.5 percent on the undisburs~d balances and 0.75 percent on the disbursed balances). NOTE: Money figures are in U.S. dollar equivalents. IDA credits are denominated in SDRs (Special Drawing Rights), which are valued on the basis of a "basket• of currencies. The U.S. dollar equivalent of the SDR amount of the IDA credit reflects the exchange rates existing at the time of the negotiation of the credit.