On Thursday, the Presidency of the Assembly of People’s Representatives (ARP) referred to the Finance Committee the draft law amending Law No. 35 of April 25, 2016 regulating the status of the Central Bank of Tunisia (No. 70/2024), introduced by a number of deputies.
In this context, it is worth recalling the many criticisms that have been levelled at this proposal, particularly with regard to the independence of the BCT, the issue of its financing, direct government borrowing from the central bank and its impact on the inflation rate.
In a recent interview with Africanmanager, the head of the ARP’s General Legislative Committee, Yasser Gourari, said that the National Sovereignty parliamentary group had submitted a bill to revise the law on the Central Bank of Tunisia.
He pointed out that Law No. 10 of February 7, 2024, which authorizes the Central Bank of Tunisia to grant facilities to the Tunisian treasury, is an exceptional, non-permanent measure that was approved once and can only be re-approved through the enactment of a special law, which needs to be revised to allow the BCT to lend to the state and finance its budget, he said.
Gourari considered it necessary to strengthen the central bank’s role in financing the state budget, but to set conditions that guarantee that the inflation rate will not rise, which is considered one of the biggest risks.
He pointed out that the 2016 law has had a negative impact on the national economy, encouraging banks to take advantage of the law while abandoning their main role of stimulating the economy.
He added that these banks have not financed business enterprises, nor have they supported industrial activities or small and medium-sized enterprises. They have confined themselves to profitable activities such as tourism, real estate and financing the state budget.
Restoring the role of banks
The MP went on to say that the new text aims to restore the role of banking institutions and force them to return to financing economic activities, in addition to allowing the Tunisian Central Bank to finance the state budget if necessary.
Indeed, economic experts have expressed the view that the involvement of the Central Bank of Tunisia in financing the public purse poses major challenges in terms of the repercussions it could have on the national economy, as this measure is considered to be one of the most dangerous taken in the last decade.
They believe that the state is currently giving priority to consumer spending and salaries.
It should be remembered that the President of the Republic has stressed that Tunisia is now paying dearly for the consequences of past choices that can be likened to crimes. Not to mention the difficult global situation.
The Head of State received the Governor of the Central Bank of Tunisia, Fathi Zouhir Nouri, who presented the financial statements of the issuing institution for the financial year 2023, as well as the auditor’s report.
Saied stressed that the results achieved by Tunisia, based on its free choices and the will of its people, contradict all the negative predictions made by some quarters.
“The inflation rate, debt repayment and foreign currency reserves are the best proof that obstacles and difficulties can be overcome.”
