March 30, 2023

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Qais Said’s words cost Tunisia dearly

This suspension of the World Bank “Until Notice” The partnership’s plan is to effectively freeze all new financing for Tunisia, which is already in dire financial straits.

What is the immediate impact of this move by the World Bank for Tunisia?

The World Bank has decided “Pause” This collective agreement”and the Board of Directors of the World Bank” to remove the review from the calendar, originally scheduled for March 21 and “postponed until further notice”.

The decision concerns the Cooperative Country Framework (CPF), which serves as a basis for the World Bank’s Board of Directors to evaluate and support its assistance programs to the country.

The agency cannot initiate new support programs for the country until the board meets “Funded projects are funded and ongoing projects are maintained”A source close to the World Bank said.

A World Bank official told AFP, speaking on condition of anonymity, that the move meant no new financing for Tunisia was possible. “before the situation becomes clear” And a new CPF is decided. Even temporary, such paralysis “Risk of worst impact on Tunisia’s financial situation”Tunisian economist Ezzeddine Saidane says.

Tunisia, which owes 80% of its GDP, must borrow to cover its budget deficit, mainly due to the weight of its civil service. It is in talks with the International Monetary Fund (IMF) for a nearly $2 billion loan, which is conditional on other international aid, including from the European Union, but talks are slipping.

Read: 2023 will be “difficult” without agreement with IMF, says Tunisian central bank governor

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Meanwhile, Tunisia sought President Deboun’s Algeria and received financial assistance in the form of loans and donations of over $300 million. This amount is not enough to cover the Tunisian state budget.

Read: Tunisia, a rapprochement with Algiers that smells of bias?

“The budget for 2023 envisages a loan of 25 billion dinars (7.5 billion euros) from abroad, equivalent to 5 billion dinars (1.5 billion euros). Without the World Bank, undertaking such a move would be very complicated”Economist Ezzeddine Saidane judges for AFP.

What is the impact on negotiations with the IMF?

Tunisia’s central bank governor Marouane Abassi warned in January that 2023 would be “difficult” against a backdrop of weak growth (less than 3%), high inflation (more than 10%) and high unemployment (more than 15%). ), without a quick deal with the IMF for a loan.

With another major donor, the World Bank, backing out, the IMF may be reluctant to finalize an already controversial deal.World Bank Officer.

But since a deal in principle was announced in mid-October, talks between the two sides appear to have stalled.

A possible deal with the IMF depends on some financing being released by the World Bank, and its decision to suspend a partnership program with Tunisia could set off a new setback in the negotiations.

Read: Kaïs Saïed has less than 100 days to find 2.4 billion dollars for the state budget

The IMF may be reluctant to finalize an already controversial deal as the other major donor in Washington (also editor’s note) backs out.“, a World Bank official spoke on condition of anonymity.

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And now?

The Tunisian government has yet to react to the World Bank’s decision.
Economist Ezzeddine Saidane, Tunisian authorities have “Find a way to turn around this issue and regain the confidence of international financial institutions”.

The rest depends on the government’s reactionHe adds.
Meanwhile, negotiations between Tunisia and the World Bank for new financing — including a 20 million euro loan for a cable project to supply solar power to Europe — have been postponed until further notice.

“If the situation persists, Tunisia will lose more funds”A World Bank official warns.

Tunisian products were ignored by African consumers

Avocados, couscous, dates, butter… From Bamako via Conakry or Dakar, boycott campaigns against Tunisian products are proliferating on social networks without yet being able to measure the impact.

The Senegalese company Senico SA was forced to justify the origin of one of its flagship products, the Jadita Marker. Young Africa.

Seneco is a shareholder of Med Oil Company, a subsidiary of the private Tunisian conglomerate Poulina Group Holding (PGH). The Jatida brand is Tunisian, but Seneco needs to reaffirm that the Jatida margarine sold in Senegal is 100% Senegalese, produced at its factory in Diamniadio. “Our margarine is a 100/Senegal product,” says a company statement.