Tunisia prepares alternative IMF proposal

Tunisia readies an alternate proposal for the IMF amid President Saied’s rejection of a $1.9 billion loan and conditions, according to Reuters as reported on June 13th.

Discussions about the details of the loan have been put on hold since October 2022, when a preliminary agreement was made but Saied rejected the idea of subsidy cuts and the sale of state-owned companies. Saied continues to assert that these measures could cause social unrest in Tunisia, and worsen already unfavorable conditions. 

READ: Tunisian foreign reserves hit new low

The official who announced the preparation of an alternative proposal did not give any insight into the specific timeline of the project. 

For now, it is unclear when an agreement will be reached, but Tunisians are continuing to suffer from food and medicine shortages, among skyrocketing prices. Additionally, the Tunisian foreign reserves have reached their lowest point in 4 years, only currently able to cover 91 days of imports. 

READ: European leaders draft $1 billion aid plan for Tunisia’s crisis

There are individuals and collaborators ready to lend and donate large sums to Tunisia but  bankruptcy seems to inch closer daily and a final agreement for the IMF loans is urgently needed. Some donors have pledged large additional sums if the government can reach a deal with the IMF, and on June 11th, the European Union announced it was offering 900 million euros in loans contingent on an IMF agreement. Gulf states are also expected to offer support if an IMF loan is finalized.

Though Saied has said richer Tunisians should be taxed more heavily, it was not clear if this could raise enough money to have a significant impact. The Tunisian officials have not given any indication regarding the conditions they will lay out for the IMF.

Reuters/Maghrebi