Tunisia - The parliamentary plenary session held on Thursday ratified the draft law concerning the approval of a credit agreement between the Tunisian government and the African Export-Import Bank (Afreximbank), dated April 4, 2023.

The credit agreement, valued at 500 million US dollars (equivalent to 1530 million dinars), is earmarked to finance the State budget. It received approval with 126 votes in favour, 2 against, and 5 abstentions.

During the plenary session, Finance Minister Sihem Nemsia emphasised the resort to debt by her department to address the budget deficit.

She reiterated the importance of this credit for Tunisia, further mentioning that the country is obligated to «repay a large loan during the month of June,» without providing further details.

Nemsia underscored the government's commitment to fulfilling its obligations to the public and creditors, noting that some of the existing loans were inherited from previous administrations and, due to the continuity of the State, must be repaid.

Bill No. 4 of 2023 aims to secure external borrowing resources for financing the State budget for 2023. The loan will carry a variable interest rate, currently estimated at 10.28%, calculated based on three months' savings rate plus 5.25%. The repayment period is set for five years, including a two-year grace period.

Under the terms of the agreement with Afreximbank, an administrative fee of approximately 0.25% of the total allocated amount will be charged, along with a late payment fee of around 1%. Additionally, fees will be incurred for legal services related to the loan, including the preparation of contractual documents and legal opinions.

The Ministry of Finance, as indicated in the bill, considers the loan agreement's terms, particularly the interest rate of 10.28%, to be acceptable, given the prevailing costs associated with international market transactions.

Furthermore, the ministry highlights that the anticipated rate of return on Tunisian bonds in the secondary markets of international financial institutions over a four-year period is estimated at 23%, equivalent to 150 million dollars in 2027.

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