Kais Said’s words cost Tunisia dearly

This is the comment of the World Bank “until a further notice” of the Partnership Program means a virtual freeze of all new funding for Tunisia, which is already mired in a serious financial crisis.

What is the direct impact of this measure issued by the World Bank on Tunisia?

I decided to run the World Bank “stop” This Partnership Agreementand to delete the World Bank’s Board of Directors’ (CA) review, which was scheduled for March 21 and is “postponed until further notice,” from the calendar.

This decision relates to the Country Partnership Framework (CPF), which serves as the basis for monitoring by the World Bank’s Board of Directors in order to assess and support the country in its assistance programmes.

The foundation cannot launch new support programs with the state until the council meets, even if Funded projects remain funded and ongoing projects continue.As said a source close to the World Bank.

A World Bank official, speaking on condition of anonymity, told AFP the move meant any new financing for Tunisia was unlikely. “Before the situation becomes clear.” And that a new CPF has been completed. Even temporary, like this freeze “Risk to have a very bad effect on the financial situation of Tunisia”In the words of Tunisian economist Azzedine Saïdane.

Tunisia, heavily indebted at 80% of its GDP due to the weight of the civil service, must resort to borrowing to make up its budget deficit. It is also negotiating a loan of about two billion dollars with the International Monetary Fund, which stipulates the provision of other international aid, including the European Union, but the talks are declining.

Read: 2023 will be “complicated” without an agreement with the International Monetary Fund, according to the governor of the Central Bank of Tunisia.

Meanwhile, Tunisia turned to President Tebboune’s Algeria and obtained financial aid in the form of loans and donations exceeding $300 million. This amount is still not sufficient at the present time to cover the Tunisian state budget.

Read: Tunisia’s rapprochement with Algeria smells of dependency?

“The budget for 2023 depends on loans worth 25 billion dinars (7.5 billion euros), including the equivalent of 5 billion dinars (1.5 billion euros) from abroad. Without the World Bank, the implementation of such an operation would be very complicated.”Economist Azzedine Saidan reports to AFP.

What is the impact on negotiations with the IMF?

Central Bank of Tunisia Governor Marouane Abbasi warned in January that 2023 will be “complicated”, in the context of weak growth (less than 3%), high inflation (more than 10%) and high unemployment (more than 15%). ), without a quick agreement with the International Monetary Fund for a loan.

However, it appears that negotiations between the two parties have stalled since the agreement was announced in principle in mid-October.

The potential agreement with the International Monetary Fund also depends on certain financing that will be released by the World Bank, whose decision to suspend the partnership program with Tunisia in this regard may constitute a new setback in the negotiations.

Read: Qais Saeed has less than 100 days to find $2.4 billion for the state budget

The IMF may be reluctant to finalize an already contentious agreement now that the other major donor, based (also, editor’s note) in Washington, has backed away.said a World Bank official who spoke on condition of anonymity.

and now?

The Tunisian government has not yet responded to the World Bank’s decision.
For economist Azzedine Saidane, the Tunisian authorities should “Finding a way to turn the page on this issue and restore the confidence of international financial institutions.”

The rest will depend on the government’s response.he adds.
Meanwhile, talks between Tunisia and the World Bank to obtain new financing – including a €20m loan for a cable project to supply Europe with solar energy – have been postponed until further notice.

“The longer the situation continues, the more money Tunisia will lose”warns a World Bank official.

African consumers boycotted Tunisian products

Butter, couscous, dates, ghee…. From Bamako via Conakry or Dakar, boycott campaigns against Tunisian products multiply on social networks without us being able to measure the impact yet.

This is how the Senegalese company Senico SA had to justify the origin of one of its main products, Jadida margarine, emphasizing that month African youth.

Senico is a partner in Med Oil, a subsidiary of the Tunisian private group Poulina Group Holding (PGH). The new brand is a Tunisian brand but Senico had to reaffirm that the new margarine sold in Senegal is 100% Senegalese product in its Diaminedio plant. “Our margarine is a 100% Senegalese product,” reads the company’s statement.