Tunisia: The postponement of the examination of the facility file by the IMF raises fears of the worst

The postponement by the Board of Directors of the International Monetary Fund of the examination of the Extended Credit Facility for Tunisia casts doubts on the economic situation of the country, especially since this loan of 1.9 billion of dollars is supposed to breathe a vital breath of fresh air into suffocated public finances.

After the economic and political spheres of the country let out a sigh of relief following an agreement in principle with the technical teams of the IMF on this loan, the postponement of the examination of the file initially scheduled for December 19, came to upset the calculations of the Tunisian government whose room for maneuver has been considerably reduced.

This postponement, as unexpected as it was sudden, raised fears about the viability and sustainability of public finances, at a time when the executive was putting the final touches on the new finance law which had been counting on this loan since the first quarter of 2022.

In addition to its expected impact on public finances, Tunisia hoped by obtaining credit, to claim new financing that is so crucial for its economy and to preserve its budgetary balances.

“The agreement with the IMF will allow Tunisia to access other sources of financing (World Bank, African Development Bank, Islamic Development Bank and other donors)”, affirmed on this subject, the economist and former Minister of Commerce, Mohsen Hassan.

He added that these institutions were waiting for the green light from the fund to lend to Tunisia, which is trying to get out of its financial crisis and repay its credits and commitments”.

Behind this upheaval, several observers point to the government’s flawed approach to managing the IMF loan file, deploring the lack of a real business plan and the clarity of the reforms to be undertaken, all exacerbated by strong tensions with the main social partners, in particular the influential central trade union body, the General Union of Tunisian Workers.

Analyzing the IMF’s approach, economist Ezzeddine Saidane described this deprogramming as a “form of severe rejection”, explaining that the real reasons behind this decision lie, among other things, in the IMF’s desire to “ensure beforehand that other donors are ready to join it in order to achieve together the reform program proposed by the State in question”.

And to underline in a post on social networks, that the other donors and the rating agencies are all wondering about the capacity of the Tunisian authorities to carry out the reforms on which they are committed.

The IMF wants, through this report, to ensure that the LF 2023 is not in contradiction with the reform program used to obtain the provisional agreement of the IMF, he explained.

For the academic and economist Ridha Chkoundali, the disagreement between economic and social actors on the content of the reforms included in the reform program is the main reason for this decision.

Chkoundali, quoted by the media, believes that the repercussions of this postponement will be very serious and will aggravate the suffocating financial crisis that the country is experiencing.

In recent days, the powerful central trade union, the UGTT, has stepped up to demand clearer communication on the reforms and the government’s commitments to the international financial body.

In a recent press release, the UGTT had expressed its astonishment and indignation at what it described as “lies” regarding the supposed participation of the Union or its experts in the development of the reform program presented by the Government to the International Monetary Fund.

The trade union center categorically denied being aware of the content of the agreement concluded between the Tunisian government and the Fund.

On October 15, 2022, the IMF announced that its staff and the Tunisian authorities have reached a staff-level agreement to support Tunisia’s economic policies with a 48-month arrangement, under the Extended Credit Facility, of approximately $1.9 billion.

An official source, quoted by the media, said that a new date will be agreed between the Tunisian authorities and the International Monetary Fund regarding the review and approval of the Extended Credit Facility for Tunisia, in order to give the authorities of the country more time to finalize the details of the reform program that they presented to him.

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