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HomeFeatured NewsTunisia raises 2,850 million dinars of foreign funding

Tunisia raises 2,850 million dinars of foreign funding

Tunisia has managed to raise 2,850 million dinars for 2011, as part of bilateral and multilateral co-operation, said Planning and International Co-operation Minister Abdelhamid Triki.

Additional needs of Tunisia’s foreign financing are estimated at 4,200 million dinars for 2011 to meet challenges related to the impact of this critical period which the Tunisian economy has been living through since January 14, 2011, said the Minister.

These additional needs are explained, in particular, by the rise of the current external deficit of expenditure which reached 1,525 million dinars due to lower exports and fall in tourism revenues.

In a statement to Tunis Afrique Press (TAP) news agency, Mr. Triki said Tunisia has received support from its key international partners.

The African Development Bank (AfDB) has provided funds of more than one billion dollars, 500 million dollars for short term reforms. The World Bank will provide a 500-mln-dollar loan.

As regards loans for micro-projects, 75 million dinars will be granted by the Arab Fund for Economic and Social Development (AFESD), in addition to 150 million dinars to finance exceptional projects in internal regions, as well as technical assistance to be provided for the compensation of damage (15 million dinars).

For its part, the Islamic Development Bank (IDB) will provide funding of 50 million dinars for the Tunisian Solidarity Bank (BTS).

At the bilateral level, the Minister said that Tunisia had received pledges of exceptional support from several countries. France will grant loans estimated at 350 million Euros (700 million dinars), 185 million Euros of which will be disbursed quickly to strengthen the short-term reform program.

Italy will provide nearly 135 million Euros, i.e. 270 million Euros, Algeria will grant 100 million dollars and the European Union will give a 90-mln-Euro donation.

The Minister reminded that several other funding (nearly 1,500 million dinars), under review, will be dedicated to the construction of many motorways, in addition to agricultural and integrated development projects.

“The additional funding takes into account the imperatives of the current economic and social situation,” he said.

The Minister expressed hope that these funds will be disbursed swiftly, i.e. in the course of 2011, and with easy repayment terms.

These funds will be used to support the Government program aimed at boosting economic activity, through consolidation of regional development and employment, in addition to the support for social sectors and investment in regions.

The Interim Government has also set up a reform program aimed at supporting the economy in the short term. This program has four points relating to good governance, financial sector, employment and regional development and social sectors.

Mr. Triki said several measures and decrees on strengthening good governance, transparency and access to information have been published as part of this program, in addition to identifying needs of needy families.

The Minister said the new commitments will be divided into three categories. The first will involve funding to support the middle term reform program which is “the largest program” to be carried out and help provide funding of 1,950 million dinars.

These funds come from the World Bank (700 million dinars), the African Development Bank (700 million dinars), the French Development Agency (370 million dinars) and the European Commission (180 million dinars). The Minister said negotiations have been initiated around the program decided by the Interim Government with the African Development Bank whose Board of Directors had approved on May 30, 2011 the loan agreement to be signed next week, the World Bank (WB) which will approve the loan next June 21 and the French Development Agency (AFD), with which a convention was signed to fund this program.

Negotiations will begin next week with the European Commission regarding the grant it will present to support the economic and social reform program. On the withdrawal operations, the Minister said they will be made at the beginning of July 2011 (1,570 MTD) and by late 2011 (380 MTD).

The second category of commitments includes credit lines to finance micro-projects estimated at 150 MTD and on which negotiations with the Islamic Development Bank (IDB) and the Arab Fund for Economic and Social Development (AFESD) have ended. The Minister said, in this regard, that the Tunisian Solidarity Bank (BTS) may benefit from these funds in the second half of this year. He also added that the third category of liabilities relate to appropriations for the benefit of exceptional programs to strengthen regional development whose identification is in progress. Mr. Triki said the support of donors and the G8 to Tunisia is a sign of confidence enjoyed by the country and a factor likely to encourage foreign promoters to invest in New Tunisia.

He noted that these funds were granted to Tunisia on easy terms and their repayment will be made over a period ranging between 17 to 20 years, including 5 years of grace, underlining that the mobilization of these resources will not impact on indebtedness.

Indeed, he said, these resources will not impact on indebtedness, knowing that the resort to these loans will bring about an increase in the rate of debt of 3% of the GDP, thus bringing the debt rate to 38% by late 2011, a level which is “very positive and able to boost development action after 2011,” according to the Minister.

He said, in the same context, that foreign currency reserves fell from 13 billion dinars to 10 billion dinars now, adding that they will reach an acceptable level late this year and that it will be possible consequently to remedy the current problems and maintain the levels of economic growth.


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