Algeria grants a loan of 300 million dollars to Tunisia. This was announced by Algerian President Abdelmadjid Tebboune on November 15, 2021, during a two-day state visit to Tunis. On the program, the strengthening of economic relations between the two countries. Algiers flies to the aid of its neighbor, but this will just allow the state coffers to be bailed out for a few months, pending a more substantial loan from the International Monetary Fund (IMF).
In debt to the tune of 41 billion dollars (102% of GDP), Tunisia is negotiating with the International Monetary Fund for a loan of four billion dollars. To get out of the rut, despite the massive aid received from the European Union, Tunis is turning for the fourth time in ten years to the IMF, but also to the United Arab Emirates and Saudi Arabia, the World Bank, the African Development Bank, etc.
The relentless recourse to borrowing ultimately serves in part to repay other loans. It’s a vicious circle. “
Fadhel Kaboub, professor of economics, specialist in the Arab worldin the world
The Tunisian economic crisis, characterized for ten years by weak growth (0.6% on average) and high inflation (6%), has been further aggravated in recent years by the Covid-19 pandemic which has put the country at the shutdown and deprived it of a large part of its tourist receipts, the country’s main foreign exchange contribution.
Tunisia imports a large number of food products, high-tech equipment such as smartphones and computers, and much of its energy. On the other hand, it exports products with low added value such as olive oil, textiles or phosphate. All of this creates a structural imbalance in the trade balance and lowers the value of the currency. In the end, the rise in the prices of imported products weighs on the purchasing power of Tunisians.
In addition, the economic crisis is coupled with a chronic political crisis slowing the enthusiasm of investors and donors. In July 2021, President Saïed assumed full power with the dismissal of the government and the suspension of the parliament dominated by the Islamist-inspired Ennahdha party. A suspension of Parliament further extended on November 13, 2021 until the holding of new legislative elections announced for December 2022.
“Mr. Saied seems determined to carry out his political project, ignoring pressure at home and abroad”, analyst Slaheddine Jourchi told AFP. “The big problem is that he will continue to rule by decree. His political conflict with his opponents will escalate.”