Morocco’s drought, Egypt’s dollar sukuk

The effects of another severe drought in Morocco have weighed on growth, pushed up inflation and fuelled pockets of unrest. Supermarkets in Europe have felt the impact too, with many reporting shortages of food products that are usually sourced from the Kingdom. But strong rainfall at the start of this year provides hope that the worst may soon be over. Elsewhere, the Egyptian government sold its maiden dollar-denominated sukuk bonds this week but at the expense of paying a high coupon. This will contribute to higher debt servicing costs and reaffirms that the government will need to keep fiscal policy tight in order to ensure debt sustainability.