IMF disburses Ksh.25B loan tranche to Tunisia

The International Monetary Fund (IMF) has approved the payment of a $247million (Ksh25billion) loan tranche to Tunisia.

This is the sixth under its loan program with the North African country, Minister of Reforms Taoufik Rajhi told Reuters.

Tunisia struck a deal with the IMF in December 2016 for a loan program worth around $2.8 billion (Ksh284 billion) to overhaul its ailing economy. It included steps to cut chronic deficits and trim bloated public services.

This will bring total disbursements to about $1.6 billion (Ksh162 billion) since 2016.

The IMF approval will open the way for Tunisia to sell bonds worth up to $800 million (Ksh81 billion) this year.

Tunisia needs around $2.5 billion (Ksh254 billion) in external financing in 2019, officials said.

The North African country has been hailed as the Arab Spring’s only democratic success because protests toppled autocrat Zine El Abidine Ben Ali in 2011 without triggering violent upheaval, as happened in Syria and Libya.

But since 2011, nine cabinets have failed to resolve Tunisia’s economic problems, which include high inflation and unemployment, and impatience is rising among lenders such as the IMF, which have kept the country afloat.

The IMF had wanted Tunisia to freeze public-sector wages – the bill for which doubled to about 16 billion dinars (Ksh558 billion) in 2018 from 7.6 billion dinars (Ksh262 billion) in 2010.

In order to cut the energy deficit demanded by the IMF, the government last March raised fuel prices, the fifth hike in 12 months.

The parliament also approved last April a law to raise the retirement age for civil servants by two years and impose social security taxes on employees and employers, another key reform demanded by the country’s international lenders to stabilize its finances.