Innovative Financing: What Alternatives for the Treasury?

Innovative financing has constituted an important budgetary buffer for the State.

As a reminder, the principle consists of monetizing part of its real estate assets with institutional investors, notably through dedicated vehicles, namely OPCIs, while retaining the use of the assets in exchange for the payment of rents.

The mechanism therefore makes it possible to obtain immediate liquidity without resorting to a conventional debt issuance.

The use of this instrument has grown considerably. While it mobilized some 9 billion dirhams in 2019, the year it was launched, it changed scale from 2022 onwards, reaching 25.1 billion dirhams, 25.4 billion dirhams in 2023, and then 35 billion dirhams in 2024.

Last year, revenues generated by innovative financing reached 40.1 billion dirhams, out of 77.6 billion dirhams in non-tax revenues, representing more than half of this category of resources.

Since its introduction, the cumulative amount mobilized has reached nearly 147.5 billion dirhams. In 2026, the 2026 Finance Law provided for 20 billion dirhams from these operations, of which 9.9 billion dirhams had been realized as of this date.

A significant financial windfall made available to the State, in exchange for the payment of nearly 7 billion dirhams in annual rents. However, this cycle is coming to an end.

Indeed, the 2026-2028 budget programming had already provided for a decline to 15 billion dirhams in 2027, before a complete phase-out in 2028.

Except that the preparation of the 2027 Finance Bill does not provide for any use of this mechanism. This is understandable, since the scheme cannot be renewed indefinitely.

The stock of mobilizable assets remains limited, while each operation generates future commitments in the form of rents.

The Financing Challenge

Starting in 2027, according to what is set out in the Finance Bill framework letter and in the 2027-2029 three-year programming, the State will therefore have to continue financing a particularly sustained investment cycle, but without being able to rely on this resource.

Several major programs are already underway with a horizon of 2030. In the railway sector, the announced envelope amounts to 96 billion dirhams, including 53 billion for the Kenitra-Marrakech high-speed rail line and the development of regional trains.

The airport sector, for its part, is expected to mobilize 38 billion dirhams between 2025 and 2030.

Added to this are water-related investments, notably through the National Drinking Water Supply and Irrigation Program, whose envelope has been raised to 143 billion dirhams, the installation of desalination plants, as well as all road and sports infrastructure…

In 2026, the public investment effort was budgeted at 380 billion dirhams, up 11% compared with 2025.

It is true that these amounts are not all directly borne by the general budget. They are distributed among the State, public establishments and enterprises (EEP), financial partners, local authorities, and various financing mechanisms.

But they give an indication of the scale of the commitments that the public sector will continue to face in the coming years.

While its investment needs remain high, the next budget will therefore have to be built without the contribution of innovative financing.

The equation will be all the more delicate as the budget deficit will have to remain contained at around 3% of GDP in the coming years.

At the same time, Treasury debt will have to continue its decline, approaching 63% of GDP in 2029, compared with around 66% currently.

The disappearance of this exceptional revenue will therefore have to be compensated, at least partly, by more structural resources.

The government may notably continue to rely on the growth of tax revenues. With the various reforms undertaken regarding personal income tax (IR), corporate income tax (IS), and VAT, these revenues are maintaining favorable momentum, which could be strengthened by continued efforts to combat tax evasion, broaden the tax base, and progressively integrate the informal sector.

Rationalizing Expenditure

Borrowing will remain an instrument for financing the residual need. Treasury bills, financing from multilateral and bilateral lenders, as well as issuances on international markets, may continue to be mobilized.

But their use will have to remain calibrated so as not to compromise the trajectory of reducing the deficit and public debt.

At the same time, expenditure control will have to gain in importance.

This is, moreover, one of the areas highlighted in the 2027-2029 budget programming, which emphasizes in particular better selection and prioritization of public investment projects, as well as the optimization of operating expenditure.

The issue is all the more important as personnel costs now approach 200 billion dirhams, notably as a result of commitments made במסגרת of the social dialogue.

The rationalization of tax expenditures represents another potential source.

The revenue shortfall associated with tax exemptions and other tax concessions exceeds 32 billion dirhams. A more systematic assessment of their economic and social effectiveness could make it possible to eliminate or redesign schemes whose impact would no longer justify their cost to public finances.

Another lever is to make better use of the public portfolio and public assets.

Privatization operations or the sale of stakes can provide the State with occasional revenues, while the reform of the public establishments and enterprises sector and the role of the National Agency for the Strategic Management of State Participations and Monitoring of the Performance of Public Establishments and Enterprises (ANGSPE) should enable more active management of the public portfolio.

Finally, mobilizing private capital should also play a greater role in financing public projects.

The Importance of Structural Reforms

The planned end of innovative financing is not seen as a sign of an imminent weakening of public finances, but rather as a signal to accelerate structural reforms and consolidate more sustainable sources of revenue.

The objective is to anticipate the gradual phase-out of this exceptional lever in order to preserve budgetary balances without, in the long term, increasing the constraints weighing on the State’s finances.

Among the priority areas is pensions, whose imbalances continue to pose a sustainability challenge in the medium and long term.

The reform already initiated under the previous government will therefore have to be continued and deepened in order to limit this future pressure.