World Bank agrees to give $500m loan to Tunisia

Tunisian interim PM Hamadi Jebali is delighted with the World Bank's support The World Bank has agreed in principle to grant a loan worth $500 million to Tunisia as financial assistance towards the country's 2013 budget, Finance Minister Elyes Fakhfakh said on Thursday .He highlighted that the loan will be granted under favourable long-term repayment conditions with a 5-year grace period so as not to put further strain on the state budget.
The deal was agreed in December to aid the country's economic and social revival. This direct support to the state budget will be accompanied by a reform and technical assistance programme for Tunisia in 2013, added the minister.
At a press briefing after a meeting between President Jim Yong Kim and Tunisia's interim Prime Minister Hamadi Jebali, the later said that the World Bank's support for Tunisia is not just financial but also to based on reforms, especially in the sectors of banking, training, surveys, investment and decentralisation. Jebali added that his government may negotiate another $2 billion with the World Bank.
In spite of the difficult conditions Tunisia is going through, the World Bank President said that the bank will remain Tunisia's chief partner and will help it overcome this stage.
This news comes as the total flow of foreign investments in Tunisia increased by 3,079.5 million Tunisian dinars (MTD), recording a positive development of 79.2 percent compared to 2011, and 27.4 percent compared to 2010.
The Investment and International Co-operation Ministry confirmed that "the manufacturing industries recorded a rise of 61% compared with 2011, and a slight decline of 7% compared with 2010. These investments helped create 123 new enterprises and extend 185 already set-up units operating in several sectors as textile-clothing, mechanical and electrical industries, services, leather and footwear, food industries and others, generating 10,263 jobs."
The Ministry specified that "over 120 foreign enterprises stopped activities in view mainly of marketing difficulties towards Europe, reasons related to productivity and social problems."
As regards mobilisation of foreign financial resources, 1,101.4 MTD under the form of donations were mobilised, 629.4 MTD of which are part of bilateral co-operation, 420 MTD of the European Union (EU), 34.2 MTD as part of multilateral co-operation and 17.8 MTD from regional co-operation.
Tunisia managed "for the first time in its history to mobilise this amount, while the average was always about 300 MTD a year in the past years, which testified the backers' will to support Tunisia in this critical transition phase," according to the investment ministry.
In terms of credits, Tunisia mobilised 3,899.3 MTD, 1,733.3 MTD of which as part of regional co-operation, 1,673 MTD as part of bilateral co-operation, 834.4 MTD as part of multilateral co-operation and 700 MTD from the EU. "The set of funding are meant to support the state budget to finance several projects in various sectors, such as infrastructure, support to the private sector notably small- and medium-sized enterprises, the health sector, the improvement of living conditions in inland regions, agricultural development and energy. These concessional loans whose interest rates range between 1.5 percent and 2.5 percent, with a 20 year-payback period and a 5-year grace period.," the communiqué concluded.