Tunisia signed a $130 million loan agreement (about 400 million dinars) with the World Bank (WB) on Monday, to mitigate the impact of the war in Ukraine on the food situation.
This fast-disbursing loan will be granted under concessional conditions, i.e. 18 years of repayment including five years of grace and an interest rate of 1.71%.
This financing will support Tunisia’s capacity to supply grain, particularly soft wheat, which is mainly consumed by vulnerable social groups, said Minister of Economy and Planning Samir Saied.
“A large part of this financing is intended for the acquisition of barley and seeds ($60 million) to ensure the good start of the grain campaign and to ensure the preservation of livestock and maintain the normal rhythm of local milk production,” he added.
The project also includes technical support to restructure the grain sector in terms of organization and storage and to strengthen its resilience to shocks.
Capacity building activities for the grain office, particularly concerning supply, monitoring and digitization, have also been undertaken to improve performance and means of intervention.
In conjunction with parallel financing from other donors, the project aims to avoid bread supply shortages in the third quarter of 2022 by financing urgent purchases of soft wheat, equivalent to one and a half months’ consumption, according to the WB.
The financing will also help Tunisia procure some 75,000 tons of feed barley to cover the needs of small-scale dairy farmers for about a month, as well as 40,000 tons of quality wheat seed to ensure the next seed campaign, which will start in October.
The WB Resident Representative in Tunisia Alexandre Arrobio said this funding aims to support Tunisia in this difficult situation and to mitigate the impact of the war in Ukraine on the food situation.
He recalled that the WB has granted Tunisia funding of $1 billion in 2021 and 2022, as urgent aid and to support the country’s efforts in the fight against the crises it has experienced.
Tunisia is particularly vulnerable to supply disruptions; in 2021, the country has achieved 60% of its soft wheat imports and 66% of its barley imports with the Russian Federation and Ukraine, according to the WB.
