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FEATURE STORY December 13, 2017

Supporting Casablanca Meet Its Optimal Development Scenario

With challenges ranging from poor infrastructure, social inequality to limited financing, the city of Casablanca is working to modernize its governance and management model. The World Bank will provide technical and financial support, as part of the first subnational lending using the Program for results instrument, to help the city become a more competitive and attractive city.

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From fiction to development, Casablanca can become a rising star again

In Morocco, the World Bank is supporting the Municipality of Casablanca in taking increased responsibility in the delivery of infrastructure and services to its citizens. Through a Program for Results (PforR) loan to the municipality – the first of its kind – the World Bank is partnering with the Government of Morocco to demonstrate a model for empowering local governments and improving quality of life and the business environment in its largest cities.

75 years after the first screening of the classic movie of the same name, to many, “Casablanca” will first bring to mind the black-and-white image of Ingrid Bergman and Humphrey Bogart worriedly staring at each other. In fact, a google search for Casablanca does require one to scroll down quite a bit before finding the first image of Casablanca-the-city, lost between stills and posters of the movie.

On the ground, though, a lot has happened in Casablanca over the last 75 years, including a 600% increase of its population, from around half a million to more than 3.5 million today. The growth of Casablanca into a bustling port city and industrial hub has accompanied Morocco’s transformation from a predominantly rural into a largely urban country. Back in 1950, three out of four Moroccans lived in rural areas. Today, more than 60% of the country’s population lives in cities.

As in most other developing countries in the world, Morocco’s urbanization has brought about a structural transformation of the country’s economy with the growth of the modern industrial and services sectors. This country’s demographic and economic transformation is still a work in progress, though, and managing urbanization will be key to allowing Morocco to leverage its cities in order to transition to upper-middle income status.

An economic hub with numerous challenges

As Morocco’s largest city and economic capital, Casablanca embodies the challenges and opportunities of urbanization. More than one in ten Moroccans lives in the Greater Casablanca urban agglomeration. As the country’s main economic center, Casablanca also generates directly one fifth of the national GDP. At the same time, Casablanca the city is marked by inequality and persistent pockets of poverty.

Weak financial and institutional capacity prevents the Municipality of Casablanca from meeting the growing demands of its citizens. The city’s untapped fiscal potential, estimated at around US$150 million per year, limits the Municipality’s investment capacity, which represented only US$19 per inhabitant in 2016. This level of investment is largely insufficient to deliver the urban services required at the metropolitan scale to insure social inclusion. Sustained urban growth combined with a lack of investment over the past decades has led to very unequal levels of access to services throughout the economic capital.

Casablanca has become a national priority. The city finds itself at a crossroads between being a beacon of the promises of urbanization and an example of its multi-faceted challenges. With increasing global competition, Morocco’s largest city must act resolutely and rapidly to preserve its central position as the country’s main growth pole and its main window to the world economy. The authorities’ renewed attention led to the September 2014 launch of the Greater Casablanca Development Plan (Plan de Développement du Grand Casablanca, PDGC) - a US$3.4 billion initiative over six years (2015-2021) aimed at increasing policy and investment coordination between central and local government in the Casablanca agglomeration. In addition to calling on the Commune de Casablanca (CC) to contribute directly to PDGC investments through its own revenues and external borrowing, the PDGC mandates the CC to implement a set of institutional reforms aimed at increasing its financial sustainability, business attractiveness and service delivery capacity.

Helping Casablanca meet its optimal development scenario

With the just launched Casablanca Municipal Support Program, the World Bank is supporting the Municipality of Casablanca to address its main challenges. This operation is the first Program for Results (PforR) loan to a municipality, and features a new model to support an integrated program of reforms and investments at the city level.

The Casablanca Municipal Support Program will support key reforms and investments to (i) increase the Municipality’s investment capacity, (ii) improve the urban environment and access to basic services, and (iii) improve the business environment in the Municipality of Casablanca.

The reforms promoted by this operation will help demonstrate a model for empowering Moroccan local governments to take increased responsibilities in driving their cities’ development and answering their citizens’ demands. In 2011, Morocco embarked on an ambitious institutional reform agenda aimed at deepening decentralization and deconcentration. The ongoing institutional reforms introduced through the 2011 constitution give regions and municipalities an increased mandate in facilitating the private-sector’s ability to create jobs, promote the delivery of quality public services, and strengthen the ability of citizens to hold the state to account. However, decentralization remains a work in progress, and important efforts are needed to strengthen regional and local governments – both financially and institutionally – to enable them to fulfill the mandates that have been assigned to them.