Tunisia’s long-awaited $1.9 billion loan from the International Monetary Fund (IMF) faces an unprecedented delay, marking a significant setback for the North African nation. Despite reaching a preliminary deal with the IMF a year ago, Tunisia has yet to receive any funds due to the government’s reluctance to implement essential reforms mandated by the IMF.
A year ago, Tunisia and the IMF struck a preliminary deal on a $1.9 billion loan program. However, the funds have not been disbursed as the country has failed to secure approval from the IMF board, a crucial step to unlock the financial assistance. This delay of a year is a record in the history of IMF agreements, far surpassing the average 55 days taken by most low- and middle-income countries between preliminary agreement and final approval.
Tunisia’s President Kais Saied’s rejection of some of the IMF’s terms, coupled with domestic political turmoil, has hampered progress. Analysts have cited the lack of political will within Tunisia’s government as a major obstacle. Key reforms, including reducing the budget deficit, reforming state-owned enterprises, and devaluing the currency, remain unaddressed, hindering the loan disbursement.
James Swanston, senior economist at Capital Economics in London, emphasized, “The lack of political will among Tunisia’s government to tackle a long list of necessary reforms is the major stumbling point.”
While some analysts suggest Tunisia could manage in the short term without IMF support, concerns about the nation’s economic future are growing. The prolonged delay raises questions about Tunisia’s ability to address economic challenges and maintain stability without the IMF’s financial assistance.
An IMF spokesperson has not provided immediate comments on the current status of Tunisia’s loan program, leaving the nation’s economic fate hanging in the balance.
The international community watches closely as Tunisia grapples with political and economic hurdles, hoping for a resolution that will pave the way for necessary reforms and economic stability.
By xamse
October 9, 2023
