IMF Stresses Tunisia Reforms Imperative Before New Program

(Bloomberg) -- Tunisia must implement clear reforms and explain the country’s delicate economic situation to its people before the IMF will approve any new program, a fund official said.

A key priority for the government will be to devise a mechanism to deal with mounting debts on the part of state-owned entities - dues which account for about 40% of the gross domestic product, the fund’s mission chief to the North African nation, Chris Geiregat, said Tuesday in a press briefing.

“Before we adopt a new program with the IMF, it will be important for authorities to start explaining to the population the severity and fragility of the situation,” he said, stressing that the government must include all “stakeholders” in the discussions. The longer it takes authorities to reach “social consensus” on the reforms, the more difficult the situation will become, Geiregat said.

IMF Urges Tunisia to Lower Wage Bill, Limit Energy Subsidies

While acknowledging that the government has begun with broad measures, Geiregat said that this time, the measures must be “strongly implemented,” and not just adopted. “We have made it clear that if we see a clear reform program” that benefited from a national dialogue, “then we will support you,” he said.

Geiregat also said:

• Tunisia central bank needs to be vigilant about stability of banking sector, because impact of coronavirus hasn’t fully surfaced in banking sector
• Central bank needs to also devise plan for post-Covid recovery for the sector

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