Currency shortage places Tunisia’s music festivals under threat

Tunisia’s summer festival season is under threat after organizers said they could no longer obtain the foreign currency needed to pay international performers, raising the prospect of last-minute cancellations and contractual disputes, as reported by pro Moroccan North Africa Post on July 3rd. 

Lawyer Ahmed Ben Hassana told Tunisian outlet Webdo.tn that the commission overseeing foreign artists and the Ministry of Cultural Affairs were taken by surprise after requests for foreign-exchange transfers were reportedly rejected due to the annual quota allocated for cultural events being exhausted. According to Hassana, the foreign-currency allocation used to pay overseas artists has remained unchanged since 2005 despite the rising performance fees, inflation, and the depreciation of the Tunisian dinar, which leaves the quota increasingly inadequate for the needs of the sector. 

Many festival organizers had already completed the signing of contracts with foreign artists, paid advances, booked accommodations and flights prior to learning they would be unable to complete payments, he said. The situation may leave organizers exposed to financial losses and legal claims. Major state-backed events such as the Carthage and Hammamet festivals appear less affected, however small festivals that are being run by associations are expected to face the impact of the restrictions. 

The current dispute showcases broader pressures on Tunisia’s economy as authorities are struggling with limited external financing opportunities. 

A $1.9 billion International Monetary Fund programme agreed at staff level in 2022 has remained halted after President Kais Saied rejected key reform conditions including subsidy cuts. 

Since the rejection the government has become increasingly reliant on domestic borrowing and exceptional financing from the central bank to cover budget needs. Economists have warned that heavy government borrowing risks draining liquidity from the banking sector and can prevent the lending of money to businesses and households as banks devote a growing share of resources towards the state. 

North Africa Post, Maghrebi.org.