The International Monetary Fund (IMF) said on Saturday that Tunisia has reached a preliminary agreement for a $1.9 billion rescue package that could be finalized in December.
According to government critics, Tunisia has been in dire need of international assistance for months as it struggles with a crisis in its public finances that has prompted worries of a debt default and contributed to food and fuel shortages.
The agreement is also viewed as essential for unlocking bilateral financing from country donors who desired the assurance of an IMF plan that Tunisia will implement reforms to place its finances on a more sustainable foundation.
Diplomats report that many donors felt “burned” by prior loan agreements in which Tunisia received billions of euros without implementing promised reforms.
Under the condition of anonymity, a senior Tunisian official stated, “The agreement is a key step for Tunisia’s public finances and would enable Tunisia to borrow from some bilateral sources.” This month, the head of the central bank told Reuters that bilateral financing discussions with Saudi Arabia were progressing.
Opposition leaders and Tunisia’s powerful UGTT labor union have warned of a potential “social eruption” if people’s demands are not satisfied, as a gasoline shortage has caused long lines at gas stations this week.
The staff-level agreement calls for a $1.9 billion, 48-month package through the IMF’s extended fund facility to restore macroeconomic stability, reinforce social safety nets and tax equality, and implement reforms to promote economic development and job creation.
It is dependent upon the approval of the IMF board, which is slated to examine Tunisia’s program request in December, according to the institution.