Morocco’s Struggle with 100 Billion Dirhams in Nonperforming Debts
Morocco is currently facing a significant financial challenge, with approximately 100 billion dirhams tied up in nonperforming debts. This issue has been brought to the forefront by Justice Minister Abdel Latif Ouahbi, who recently addressed the House of Representatives’ Committee on Justice, Legislation, and Human Rights. Ouahbi highlighted the systemic problems within both the judicial and financial sectors that have contributed to this crisis.
“These funds are circulating through unscrupulous operators,” Ouahbi stated during his remarks. He mentioned that he had held a meeting with the governor of Bank Al-Maghrib, the central bank of Morocco, and emphasized the need to halt and eliminate these practices. The minister also pointed out the economic impact of unlocking such capital. “If these funds were invested productively, they could significantly boost the economy and even finance another World Cup,” he said, illustrating the potential benefits of addressing this issue.
Judicial Expertise System: A Critical Concern
In addition to the financial implications, Ouahbi also discussed the shortcomings in Morocco’s judicial expertise system, particularly regarding court-appointed experts. “The Court of Cassation states that when a party requests an expert opinion, the court does not assess the accuracy of that opinion,” he explained. “Judicial authorities have no right to intervene.”
This lack of oversight has led to a cycle of conflicting expert reports, which Ouahbi described as a drain on banks and insurance companies. “Sometimes you have an expert report, a counter-report, and another counter-report. The biggest victims are insurers and banks,” he said. To illustrate the problem, he referenced a case in which a farmer used property valued at one billion centimes as collateral, defaulted on a bank loan, yet continued to use the land while the debt went unpaid for years.
Impact on Financial Institutions
Ouahbi noted that these loopholes allow individuals to retain mortgaged properties and continue exploiting them without repaying debts, contributing to the accumulation of massive nonperforming loans. “These issues make it necessary to revisit the system of judicial expertise, ensuring balance between expert independence and effective oversight,” he said.
He emphasized that the current handling of debts often lacks precision, creating unfair outcomes and encouraging malpractice. The minister highlighted the strategic role of judicial experts, stating that “experts wield substantial influence, essentially shaping judicial decisions, yet judges often lack technical knowledge. The challenge is regulating them without compromising their independence.”
The Need for Reform
Ouahbi concluded that reforming the expertise system is one of the judiciary’s most pressing challenges. He called for structured oversight while preserving professional autonomy. “Reforming the expertise system is essential to ensure fairness, transparency, and accountability in the judicial process,” he added.
The situation in Morocco underscores the urgent need for comprehensive reforms in both the financial and judicial sectors. Addressing the issue of nonperforming debts and improving the judicial expertise system could pave the way for a more stable and prosperous economy. As the country moves forward, it will be crucial to implement effective measures that promote accountability, prevent abuse, and ensure that resources are utilized in a manner that benefits all stakeholders.
