São Paulo – The International Monetary Fund (IMF) will provide a USD 2.8 billion loan to Tunisia over the next four years, via a borrowing line known as an Extended Fund Facility (EFF). This Friday (15th), the Fund reported that the deal is pending approval from its Executive Board, which should happen next month.
According to the IMF, the loan is intended to reorient public expenditure in order to boost investment and improve public service delivery. This should take place through a civil service reform and wage bill containment. The partnership should also strengthen central bank independence, increase banking sector stability and complete the restructuring of the three public banks.
“With the implementation of these policies, Tunisia will be better placed to address economic challenges and mitigate risks that could arise from a worsening international economic environment or rising regional security tensions,” the IMF claimed in a press release. It also said the loan should make the tax system more equitable and fair and improve access to finance for small businesses.
The EFF is awarded to countries with low economic growth and balance of payments imbalances. Its peculiarities include a longer repayment term, ranging from four-and-a-half to ten years. Other lines of financing must be repaid in up to five years.
Tunisia is undergoing a deep economic restructuring, after completing the political transition that culminated with a new Constitution and government. The protests that became known as the Arab Spring first erupted in the North African country, in 2010, before spreading to other countries in the region.
*Translated by Gabriel Pomerancblum
