The Moroccan government’s Presidency has announced that a joint technical committee consisting of representatives from the government, trade unions, and employers had its inaugural meeting on Monday, April 17th to review the employees’ demands. The committee is expected to submit its findings in early May. The press release highlights that the negotiations, under the guidance of the head of government, Aziz Akhannouch, aim to find solutions to enhance the purchasing power of all Moroccans by fostering a collaborative effort between all parties involved.
In the course of these negotiations, whose outcomes are expected to be announced during the May 1st celebrations, the Moroccan trade union centres will emphasize the necessity of reducing the value-added tax (VAT) and income tax. This stance is attributed to the unprecedented inflation currently experienced in the country.
Miloudi Moukharik, the secretary-general of the Moroccan Workers’ Union (UMT), has stated that during the negotiations, the trade union delegation underlined the surge in prices and its impact on purchasing power, and recommended that the government presidency consider a partial or gradual reduction of the VAT. In a statement to the newspaper Hespress, the UMT secretary-general disclosed that the head of government and the minister in charge of the budget acknowledged the significance of income tax but did not promise any specific measures in this regard, citing the national and international economic situation, as well as the major projects undertaken by the state, in response to these demands.
In a press release, the Democratic Confederation of Labour (CDT) reiterated that “social dialogue should offer tangible measures to restrict the decline of purchasing power and combat inflation, by implementing the outcomes of the agreement reached last April, particularly the general increase in salaries and the protection of trade union freedoms.”
According to trade union sources, the increase of the minimum wage by 5% is one of the primary demands. However, this matter may face obstacles since the employers are making their consent contingent on a review of the strike law and the Labour Code. Their objective is to introduce more flexibility into the labour market.
Mohammed Hekech, the former president of the National Federation of Agriculture, stated in an interview with The New Arab newspaper that the trade union centres will also endeavour to enforce agreements later reached between the social partners on the upward adjustment of the minimum wage in the industry, services, and agriculture sectors. Nevertheless, the trade union leader highlighted that these same agreements are no longer adequate to enhance the conditions of employees. Since their signing in April 2022, inflation has escalated to such proportions that it is no longer feasible to respond effectively with these same agreements.
Several experts have repeatedly emphasized that, in the face of a considerable deterioration in living conditions, trade unions may demand a general wage raise, considering that the approved minimum wage increase in 2022 had limited effects. However, the government may oppose a general increase in wages, fearing it could exacerbate inflation. In response, the authorities could propose exempting certain bonuses and allowances from income tax.
In September 2022, the Moroccan Council of Ministers sanctioned a 10% increase in the minimum wage for the industry, commerce, and services sectors. This agreement stipulates a 10% increase spread over two years, which means a 5% increase in September 2022 and another 5% in September 2023.
Unprecedented Inflation and Incessant Social Anger
As per the High Commission for Planning (HCP), the inflation rate in the first quarter of 2023 has surged to 9.4%, up from 4% during the same period last year. This rise in inflation has been further compounded by a spike in food prices, which witnessed an increase of 18.2% during the month of Ramadan when consumption is typically higher. However, the economy has shown a significant rebound with a growth rate of 3% in Q1 2023, compared to a mere 0.3% in the previous year, as reported by the HCP.
However, despite the positive economic growth, the Central Bank of Morocco raised its key interest rate by 50 basis points to 3% on 21st March in an effort to curb rising prices, which have particularly impacted low-income and vulnerable households. This decision marks the third increase since September 2022 and runs counter to the government’s roadmap for economic recovery.
These economic indicators have triggered a significant social uprising. In early April, citizens from nearly 50 Moroccan cities participated in protests against the rising cost of food. The protests were organized by a coalition of left-wing political parties and trade union centres. In Casablanca, over 60 people demonstrated against the high cost of living in Sraghna Square, located in a popular area of the city.
In December 2022, thousands of Moroccans took to the streets of Rabat to protest against the high cost of living and political repression. The protest was organized by the Moroccan Social Front (FSM), which represents a coalition of left-wing political parties and trade union organizations. This event marked the beginning of sectoral social movements that continue to shape Moroccan political life.
According to a report published by the HCP at the end of 2022, the Covid-19 pandemic and inflation have pushed Morocco back to the same levels of poverty and vulnerability of 2014. In a country where social and territorial inequalities are already prevalent, the surge in prices has had a disproportionate impact on the purchasing power of the poorest and middle-class households.
In the face of mounting social unrest, the liberal government led by businessman Aziz Akhannouch is continuing to highlight its “social policy,” which includes the generalization of medical coverage for all segments of society. However, this argument is increasingly being dismissed by Moroccans who feel helpless in the face of inflation and the multiple repressions of political and trade union actions.
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