Tunisia: State Borrowed From Local Banks 5 Times Since 2017 - Minister

Tunis/Tunisia — «Successive governments have borrowed from local banks five times since 2017 to mobilise financial resources » said Minister of Economy, Finance and Investment Support Ali Kooli.

The government already borrowed from Tunisian banks to finance the state budget, since Article 25 of the internal regulations of the Central Bank of Tunisia (BCT) prohibits borrowing from the BCT.

Kooli was responding to questions from MPs at a plenary session held Tuesday to review the bill approving the financing agreement signed between Tunisia and a group of local banks to finance the state budget, on February 18, 2021.

The state will repay the loans worth 15.5 billion dinars borrowed by successive governments.

The government in May 2020 secured a €257 million loan, with an interest rate of 2% and a $130 million with an interest rate of 2.275%, over a period of three years, he added.

That bill concerns a €259-million loan secured with an interest rate of 2%, and $150 million with an interest rate of 2.75% over a repayment period of 5 years.

The government expects a state budget deficit of around 7.094 billion dinars, or 7% of GDP in 2021. State expenditure under this budget is estimated at 40.203 billion dinars, compared to revenues of 33.109 billion dinars.

The government aims at the time of this difficult economic and social crisis to mobilise domestic loan resources of 5.580 billion dinars, from 18 billion dinars in loans needed to finance the state budget of 2021.

Loans from Tunisian banks stirred controversy among a number of economic experts who considered this state of affairs "not in the interest of the national economy," especially since this financing is not directed towards economic sectors.

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