Morocco continues to modernize its subsidy system while preserving households’ purchasing power. Against a backdrop of declining international sugar prices and improved management of subsidy mechanisms, the budgetary cost of sugar subsidies declined significantly in 2025. This development represents one of the key outcomes of the Kingdom’s gradual subsidy reform, which seeks to ensure price stability while strengthening the sustainability of public finances.
Morocco’s system continues to rely on a fixed subsidy of MAD 3.64 per kilogram of refined sugar to maintain affordable retail prices for consumers across the country. This policy helps protect purchasing power despite fluctuations in global sugar markets and the decline in domestic sugar beet and sugar cane production caused by several consecutive years of drought.
The financial results have been particularly encouraging. Between January and August 2025, the subsidy granted for imported raw sugar averaged MAD 0.58 per kilogram, compared with a much higher level during the same period in 2024. This represents a 73% reduction in the unit subsidy. As a result, the government’s expenditure on subsidizing raw sugar imports fell to MAD 356 million, representing a 74% decrease compared with the same period a year earlier. This improvement was mainly driven by lower international sugar prices, supported by abundant global production, particularly in Brazil, one of Morocco’s main sugar suppliers.
At the same time, subsidies for refined sugar remained relatively stable in order to maintain a constant retail price for consumers. During the first eight months of 2025, spending on refined sugar subsidies reached MAD 3.05 billion, representing a slight increase of 0.8% compared with the same period in 2024. This reflects the stability of domestic consumption despite a moderate level of food inflation.
Overall, the combined cost of subsidizing raw and refined sugar reached MAD 3.413 billion between January and August 2025. This represents a 23% decline compared with the same period in 2024, illustrating the savings achieved through lower international prices and more efficient management of the subsidy system.
This progress comes at a time when Morocco remains highly dependent on international markets for its sugar supply. The decline in domestic production due to adverse climatic conditions led to a 78% increase in raw sugar imports between 2019 and 2024, mainly for local refining. Despite this growing dependence on imports, the reduction in import costs has significantly lowered the financial burden borne by the government.
The reform of the subsidy system forms part of a broader fiscal strategy. After reaching exceptionally high levels in the early 2010s, subsidy expenditures have gradually become better targeted and more efficiently managed. For 2026, the government has allocated MAD 13.77 billion to subsidize butane gas, sugar, and national soft wheat flour, compared with approximately MAD 16.5 billion in 2025, representing a reduction of nearly 16.5%.
Beyond reducing public expenditure, this development reflects an improvement in the Kingdom’s fiscal resilience. By gradually controlling subsidy costs while ensuring stable prices for essential goods, Morocco is strengthening its capacity to finance major infrastructure projects, social programs, and strategic investments, while continuing to modernize its social protection system and safeguard citizens’ purchasing power.
This evolution demonstrates that subsidy reform is no longer solely about reducing public spending. It has become part of a broader economic strategy aimed at balancing social equity with fiscal discipline, enhancing the competitiveness of the national economy, and creating additional fiscal space to support sustainable growth and long-term development.
