The International Monetary Fund has postponed indefinitely consideration of the original agreement with Tunisia for a $1.9 billion loan.
The foundation’s board of directors was supposed to discuss Tunisia’s request at its next meeting on Monday, December 19, but on Wednesday, the foundation posted an update on its website on the meeting’s agenda that did not include Tunisia’s case.
And the official Tunisian News Agency said Thursday, citing an official source, that a new date would be agreed to include an item related to the ratification of the Enhanced Fund Assistance Agreement for Tunisia on the Council’s agenda in the coming days after consultations. between the two sides in order to give the Tunisian authorities enough time to refine the last of the reform program requirements that I presented to the international funding structure.
The agency said that Tunisia intends to resubmit the reform dossier when the International Monetary Fund management meetings resume after an administrative annual leave, i.e. during January 2023.
In mid-October, the fund announced in a statement that it had reached an agreement at the fund staff level with Tunisia for a 48-month program under the “Expanded Funding Facility” worth about US$1.9 billion to support Tunisia’s economic policy.
The new program, which Tunisia is implementing with the support of the International Monetary Fund, aims to restore macroeconomic stability, strengthen social safety nets and tax equity, and advance reforms to support the creation of an environment conducive to inclusive growth and sustainable employment opportunities.
According to the statement, the Fund expects a slowdown in growth in the near term, while rising global commodity prices will put pressure on inflation and Tunisia’s external and financial balance.
And last November, Tunisia’s inflation rate saw an unprecedented rise to 9.8 percent in light of continued fluctuations in local abundance of basic commodities and their high prices around the world, according to the National Statistical Institute (Government).
Tunisia is in the midst of a severe economic crisis exacerbated by the impact of the coronavirus outbreak and the high cost of importing energy and basic materials.
Commenting on the postponement of Tunisia’s application for a loan, Tunisian economic analyst Ezzedine Saidane explained that the cancellation of this item informally by updating the calendar of meetings of the Board of Directors of the International Monetary Fund is the desire of the International Monetary Fund “to make sure, in advance, that the willingness of other donors to join the fund in order to make the reform program proposed by the country concerned successful.
According to Saidan, the International Monetary Fund, other donors and numbering agencies are asking the same question: “Are the Tunisian authorities really capable of implementing the reforms they have undertaken?” Noting that the answer is often “no”.
The economic analyst pointed out that there is “a serious credibility problem with the Tunisian authorities due to the completely contradictory statements of the President of the Republic, Kais Syed, and his government, in addition to the decisive position of General Tunisia. The trade union regarding the reform program adopted by the government”.
Saydan believes that the International Monetary Fund wants to delay the review and approval of new funding for Tunisia to ensure that the 2023 Finance Law does not conflict with the reform agenda that gave the Fund’s approval. at the expert level.
He stated that the draft law on finances for 2023 must be signed by the president of the republic, while the copy submitted to the fund does not.
“The country needs wise, patriotic, sound and responsible behavior,” he added.
For his part, economist and academic Reda Shakandali suggested that “the main reason for this decision is the lack of consensus among economic and social actors on the reforms included in the reform agenda, subject to expert agreement.”
And he considered the consequences of the postponement “very dangerous”, explaining that the decision would exacerbate the suffocating financial crisis and scatter papers on the draft state budget for 2023 at the level of mobilizing the necessary external resources to pay a significant amount of hard currency in the form of external debts, as well as to ensure supplies of basic materials, medicines and, possibly, equipment and materials of prerequisites for the production process.