Morocco’s only oil refiner, Samir, called for an extraordinary general assembly meeting on October 16 to approve plans for a capital increase of $1.04b in an effort to end the company’s financial difficulties, reported Reuters.
The company had previously reported a $223m first-half loss with its shares losing around 50% in 2015 on the Casablanca stock exchange.
The tax authorities have already seized the company’s bank accounts in pursuit of a $1.3b tax claim, promting fears that petroleum imports will baloon if the company goes under.
Nonetheless, as oil prices eat into Samir’s profits, the Moroccan government continues to make progress, phasing out fuel subsidies and using cheap energy imports to shore up state finances.
Morocco’s petroleum consumption is Africa’s fifth largest, according to the US Energy Information Administration.
“Morocco has made significant savings on the fiscal side, and this was easier to do because of the low oil prices, so it was good timing,” Karim El Aynaoui told Bloomberg, a former economist at Morocco’s central bank and currently the head of the Rabat-based OCP Policy Center think tank.
“The challenge is to keep on reforming to keep up long-term growth, and invest in things like infrastructure that are the basis of an economy,” he added.
According to Fitch Ratings, state investment will remain above 5% of gross domestic product, with foreign investments seeping into the Moroccan auto and real estate sectors.