Tunisia-IMF is ready to start program negotiations in the coming weeks with Tunisia

After several months of technical discussions with the Tunisian authorities, the IMF is ready to start program negotiations in the coming weeks.

• The severity of the impact from the war in Ukraine increases the urgency for swift implementation of ambitious reforms.
• We welcome the recent publication of the government reform program and emphasize the need for stakeholders to unite around it and contribute to this effort.

” Mr. Jihad Azour, Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), visited Tunis from June 20–21, as part of broader trip to North Africa. During his visit, Mr. Azour met with President Kaïs Saïed to discuss the government’s economic reform program. He also met with Ms. Najla Bouden, the head of the government, as well as representatives of the civil society”.

“At the end of his discussions, Mr. Azour issued the following statement

“The spillovers from the war in Ukraine are deepening Tunisia’s already high economic imbalances, while creating more hardship to the population. Thus, the severity of the economic situation makes the need for swift implementation of ambitious reforms evermore pressing.

“Tunisia needs to urgently tackle its fiscal imbalances by improving tax equity, containing the large civil service wage bill, replacing generalized subsidies with transfers targeting the poor, strengthening its social safety net, and reforming its loss-making state-owned enterprises to quickly reduce its sizeable economic imbalances and ensure macroeconomic stability. In addition, strengthening competition and opening up the economy to private sector investment would help unleash Tunisia’s potential for inclusive and much-needed job-rich economic growth.

“A home-grown reform program, as presented by the government, has the benefits of stronger ownership and greater credibility, and thus of a greater chance of success than in the past. Ownership over reforms matters a great deal, with or without an IMF-supported program. To this end, we welcome the recent publication of the government reform program. It is also very important to further articulate the specific policies and reforms and discuss them with all stakeholders so that they unite around the government program and contribute to this effort. Thus, continued dialogue with key stakeholders together with broader communication should help increase the chances of success.

“The IMF has been and remains a strong partner to Tunisia. In 2020, the IMF supported Tunisia when it coped with the Covid-19 pandemic and under a particularly difficult international environment. At this juncture, the IMF stands by the side of the Tunisian authorities in their efforts to advance economic and social reforms for the benefit of the population. After several months of technical discussions we are ready to start program negotiations in the coming weeks.”