Tunis/Tunisia — The year 2024 will prove difficult as regards the repayment of internal and external debts, according to Ridha Chkoundali, an academic and economic expert, who believes that the volume of debt to be repaid is "enormous" (TND 24.7 billion, including TND 12.3 billion in foreign debt).
The expert said the source of the mobilisation of TND 16.4 billion in the form of foreign loans included in the state budget, of which TND 14.5 billion will be used to consolidate the budget, is still unknown. For Chkoundali, this situation is "very dangerous and may lead the country into the unknown".
The expert also wonders about the sources of financing, given that the 2024 finance law makes no mention of a possible loan from the International Monetary Fund (IMF) or the European Union. The same goes for France, Germany and Italy.
In the same vein, the expert ruled out the idea of securing such financing from the BRICS group, since it does not grant loans in dollars or euros.
He also pointed out that Tunisia's foreign debt has increased by TND 9.3 billion, from TND 7.6 billion in 2022 to TND 10.6 billion in 2023.
There has also been an increase in external grants, which have quadrupled from TND 354 million in 2023 (Finance Law) to TND 1,537 million throughout 2023.
Thus, in 2023, the Tunisian government relies essentially on external debt, contrary to the political will of the President of the Republic, who opted for internal resources. The approach of relying on itself requires a rapid financial rescue programme in the short term, he noted.
He also described this approach as "contradictory" to the guideline, which foresees an increase in the external debt by TND 6 billion, from TND 6.10 billion in 2023 to TND 16.4 billion in 2024.
According to the expert, self-sufficiency requires a programme based on four axes: phosphate, fully exporting companies, Tunisians' remittances abroad and money circulating on the parallel market.
He explained that the broad outlines of this programme are not mentioned in the 2024 finance law, because the government has continued with the accountability approach adopted by other post-revolutionary governments. "This will cause the Tunisian state to lose more than a thousand billion dinars by 2023, instead of moving towards an economic approach that takes into account the economic impact on development, unemployment and the purchasing power of Tunisian citizens."
Chkoundali stressed the need to review the economic policies adopted by the post-revolutionary governments, including the current government of Ahmed Hachani.
An expansionist fiscal policy and austerity in the supply of raw materials and basic commodities
He pointed out that the state has adopted an expansionist fiscal policy in 2023, with a significant increase in the state budget (TND 10.7 billion), but austerity (-7.1%) in the supply of basic products, raw materials and semi-industrialised manufactured goods, resulting in an improvement in external financial balances and certain financial indicators.
The improvement in financial indicators relates in particular to the significant reduction in the trade deficit of TND 6.8 billion at the end of November 2023, compared to the 11 months of 2022, i.e. TND 16.5 billion in 2023, compared to TND 23.3 billion in the same period of the previous year.
Chkoundali added that "the government's economic discourse in the 2024 finance law is this time in line with the political discourse of the head of state, especially with regard to relations with the IMF, despite the financial gap (TND 10.3 billion)".
He added that "the expansionary fiscal policy, based on an increase in the fiscal pressure rate from 20% in 2011 to 25.1% in 2024, and the prudent monetary policy, represented by a successive increase in the key interest rate to 8%, compared to 3.5% in 2011, the State's recourse to indebtedness with Tunisian banks on several occasions, have put pressure on businesses and deprived them of the necessary liquidity, resulting in a weakening of private investment and a contraction in economic growth".
The economist added that the decline in the share of public investment in the state budget from 13.8% in 2011 to less than 4% in 2024 reflects the state's lack of interest in developing private investment as the main factor in the creation of productive wealth.
Tunisia's economic growth prospects in 2024 still depend on government's economic vision
The expert said Tunisia's economic growth prospects in 2024 are closely linked to the clarity of the government's economic vision.
He pointed out that the economic growth rate has fallen from 3.4% in 2021 to 2.2% in 2022, and that this rate is likely to be lower than the 0.9% forecast in the economic budget.
In this respect, Chkoundali proposed three scenarios, the first of which consists of implementing the content of the 2024 Finance Law, which means that there will be no compromise with the IMF, but this requires an enormous capacity to convince "brotherly and friendly" countries to lend Tunisia a sum of TND 10.3 billion.
This scenario is "very dangerous", according to the economist, "because it is difficult to convince Arab and European countries to lend to Tunisia without committing to a reform programme guaranteed by the IMF".
In this context, he pointed out that "if this scenario is to be successful and the country is to be safe, it will have to be completely autonomous through a rapid rescue programme based mainly on the mobilisation of external resources in foreign currency to be able to repay TND 12.4 billion of external debt.
To achieve this, a financial rescue programme will have to be drawn up at the beginning of next year, or a supplementary finance law at the beginning of March".
The second scenario proposed by the economist refers to the speech made by President Kais Saied. It involves streamlining the administration and reforming public companies by rationalising governance and combating monopolies and the cash economy.
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According to Chkoundali, to achieve this scenario, the government must have a clear economic programme that addresses three fundamental issues with a new approach that differs from that of the IMF.
These issues are essentially the reform of the civil service and public enterprises.
This requires improving the business climate by reducing the number and length of administrative procedures.
The third scenario, considered "the surest way out of the country's financial impasse", proposes to combine the first and second scenarios by applying the 2024 Finance Law and formulating a financial rescue programme based on four axes aimed at filling the financial deficit with TND 10.3 billion, updated in the 2024 Finance Law.
According to him, these four axes concern in particular the promotion of the phosphate sector by securing its production and its transfer to chemical groups with the help of the Tunisian army and by encouraging Tunisians abroad to open foreign currency accounts and use them. This is in addition to reducing the tax on the profits of fully exporting companies in order to regain their competitiveness and instituting a total tax amnesty on funds used in foreign currency on parallel markets.
The third scenario also requires the implementation of a programme of major reforms of the civil service, public institutions and the business climate, but in a different way from the content of the reforms agreed with the IMF in October 2022.
English: Samir Ben Romdhane
