Casablanca – Morocco’s public finances navigated a challenging year in 2024, shaped by record external debt repayments, rising global borrowing costs, and continued reliance on international financing. Data compiled from recent international reports indicate that the Kingdom has entered a phase of heightened financial pressure, marked by a combination of heavy repayment obligations and increased demand for fresh capital to support investment programs and cover budgetary needs.

According to the latest assessments, Morocco’s external debt servicing — covering both principal payments and interest — exceeded $7 billion in 2024, the highest level ever recorded for the country. The rise reflects a broader trend affecting developing economies, many of which are grappling with the most severe debt cycle in five decades. Elevated global interest rates, a stronger U.S. dollar, and tighter financial conditions have all contributed to the increased cost of external financing.

Debt service reaches 13% of export revenues

One of the most telling indicators of this pressure is the share of export revenues dedicated to debt service. In 2024, Morocco allocated 13% of its export income to repaying foreign creditors — a ratio that has remained stable but still signals a significant burden on the external accounts.

This means that for every $10.31 generated through exports, the equivalent of $1.34 is absorbed by debt-related payments. The ratio places Morocco below internationally recognized risk thresholds, but the consistency of this level over recent years underscores the structural nature of the challenge.

In addition, external debt service represents 6% of Morocco’s gross national income, another measure used by financial institutions to evaluate a country’s debt sustainability and vulnerability to external shocks.

External debt stock near historic peak

Morocco’s total external debt stock reached $67.99 billion in 2024, close to its all-time high. The majority of this amount — approximately $57.2 billion — corresponds to long-term debt, of which nearly 80% is backed by public-sector guarantees. Short-term external debt, by contrast, saw a notable decline, dropping to $7.5 billion from $10.1 billion in 2023.

The public sector remains the dominant borrower, reflecting the state’s extensive role in infrastructure development, social programs, and strategic investments. Private-sector external debt remains smaller in comparison but is gradually increasing as Moroccan companies seek international financing for expansion and modernization.

New borrowing reaches $8.6 billion despite high costs

Even as repayments reached record levels, Morocco continued to take on new external obligations, securing $8.61 billion in long-term financing in 2024. This included $6.86 billion for the public sector and $1.75 billion for private borrowers.

Most of the new loans originated from multilateral development banks and private creditors, highlighting Morocco’s continued integration into global financial markets. However, these fresh resources also expose the country to interest rates that are higher than at any time in nearly two decades. According to global trends, average borrowing costs in 2024 reached a 24-year peak for loans from official creditors and a 17-year peak for private-sector loans. Bond market borrowing became particularly expensive, with coupon rates hovering around 10%, roughly double their pre-2020 levels.

A diversified but heavy creditor landscape

Morocco maintains a diversified creditor portfolio. Multilateral institutions account for 49% of the public and publicly guaranteed external debt. The World Bank alone holds 21%, followed by the African Development Bank at 10%. Bilateral creditors represent 15%, with Germany, France, and Japan leading the group. Private creditors — including bondholders and commercial banks — constitute 36% of the total.

This creditor structure provides some protection against refinancing risks, particularly because multilateral loans typically offer longer maturities and more favorable terms. Nevertheless, exposure to global capital markets remains considerable.

Structural challenges and domestic risks

Beyond external borrowing, Morocco has increasingly turned to domestic debt markets to finance its fiscal needs, a trend highlighted by international observers. While local markets provide faster access to liquidity, excessive reliance on domestic borrowing could squeeze private-sector credit and increase refinancing risks due to shorter maturities.

Several structural challenges continue to shape Morocco’s debt dynamics: dependence on imported energy, fluctuating tourism revenues, and the high cost of the national energy transition — all of which require sustained investment in foreign currency. Although foreign-exchange reserves remain at comfortable levels and fiscal consolidation is ongoing, these vulnerabilities leave limited room for policy slippage.

Looking ahead

Morocco’s debt profile remains manageable by regional standards, benefiting from a balanced mix of creditors and consistent export performance. However, the combination of record repayments, high borrowing costs, and continued demand for external financing points to a tightening financial environment in the years ahead. Ensuring the sustainability of public finances will depend on maintaining prudent debt management, strengthening export diversification, and securing financing that supports long-term economic growth rather than adding to structural vulnerabilities.