While several African countries are in negotiations with the International Monetary Fund to obtain financing, Tunisia appears to be the most at risk. This is what emerges from a report by the American bank Morgan Stanley, part of which was published by the Reuters news agency on July 15, 2022.
Africa has a cluster of countries going to the IMF but Tunisia looks one of the most at risk.
A near 10% budget deficit, one of the highest public sector wage bills in the world and there are concerns that securing, or a least sticking to, an IMF programme may be tough due to President Kais Saied’s push to strengthen his grip on power and the country’s powerful, incalcitrant labour union,the report indicated.
Tunisian bond spreads – the premium investors demand to buy the debt rather than U.S. bonds – have risen to over 2,800 basis points and along with Ukraine and El Salvador, Tunisia is on Morgan Stanley’s top three list of likely defaulters. “A deal with the International Monetary Fund becomes imperative,” Tunisia’s central bank chief Marouan Abassi has said.
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