Tunisia turns to domestic banks to fund national budget over lack of foreign lending
The Tunisian government has been mounting pressure on local financial institutions to fund the 2022 national budget as the country struggles to land foreign loans to close the project’s $2.8 billion budget deficit.
The move is revealed by Ahmed El Karm, member of the executive board of Tunisia-based independent think-tank Institut Arabe des Chefs d’Entreprises [Arab Institute of Business Executive], Business News reports.
“There is a lot of pressure on the managers of financial institutions to finance the state,” El Karm said in a Facebook post.
The Tunisian government last month adopted a 2022 national budget of about TD47.166 billion (around $16.4 billion) including a $2.8-billion deficit.
The state contribution to the budget is TD38.6 billion.
The North African country is facing economic stress due to the pandemic that has affected the economy. The state has turned to foreign friendly countries to help fund the budget but only Algeria heeded the call with $300 million in form of loan.
Saudi Arabia has also agreed to back the budget with reportedly $500 million but provided that Tunisia meets the demands of the International Monetary Fund (IMF) for a restructuring plan.
The North African country has been reluctant to sign up for a credit line from the Washington-based institution, but there have been talks between the two sides and an agreement is expected by the end of the Q1 this year.