The International Monetary Fund has warned Morocco to guard against cost overruns in infrastructure projects tied to preparations for the 2030 FIFA World Cup, citing risks to public finances despite expected long-term gains.
In a recent report, the IMF said Morocco has made significant progress in developing infrastructure over the past two decades, expanding transport, energy and telecommunications networks that have supported economic diversification and productivity.
However, the fund noted that rising population growth, rapid urbanization and increasing demand for public services continue to strain existing systems, requiring further investment.
The IMF estimated that increasing infrastructure spending by 1% of gross domestic product could boost economic output by around 4% over time. But it cautioned that inefficiencies in public spending mean actual results often fall short of potential gains.
Morocco is planning a new wave of large-scale projects ahead of the 2030 World Cup, including railways, highways, stadiums, airports and urban development upgrades. Total spending between 2024 and 2030 is projected at about 11.9% of GDP, or roughly 190 billion Moroccan dirhams ($19 billion).
Most of the financing is expected to come from borrowing, with domestic bank loans accounting for about 67% of funding. External financing is projected at 17%, followed by 9% from domestic bonds and 7% from state-owned enterprises’ own funds.
The IMF said the overall economic impact of the investment could be limited by a high import content. Around 60% of spending is expected to go toward imported goods, such as high-speed rail equipment and airport infrastructure, leaving only about 40% to directly support domestic output.
Under its baseline scenario, the IMF projects that the projects will deliver sustained productivity gains and stronger economic growth. Real GDP is expected to be about 2% higher by 2030 compared with a scenario without the investments, rising to roughly 3% in subsequent years.
At the same time, annual public investment is expected to widen the fiscal deficit by an average of 1.2% of GDP between 2024 and 2030, while public debt could increase by around 8 percentage points of GDP before gradually declining.
The report also anticipates a temporary slowdown in private investment due to increased public spending, alongside mild inflation and a depreciation in the real exchange rate.
The IMF warned that cost overruns remain a key risk. A 30% increase in project costs could raise public debt by an additional 3% of GDP by 2034 without generating additional economic growth.
To mitigate these risks, the fund called for stronger project oversight, phased budget execution, improved monitoring systems and the inclusion of maintenance costs in planning. It added that infrastructure returns after 2030 must be sufficient to cover debt servicing and upkeep, or Morocco could face increased fiscal pressure.
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