Tunisia gets surprise $500m from Saudi Arabia amid IMF delay

Image credit: Twitter/ SPA

Saudi Arabia offered Tunisia $500m in financial aid that could buy time for the North African country as it struggles to secure a bailout from the International Monetary Fund.

The surprise announcement of a $400m soft loan and a $100m donation came during a visit to Tunis by Saudi Finance Minister Mohammed Aljadaan, state news agency TAP reported.

#Tunisia has received a $400 million soft loan & a $100 million grant from #SaudiArabia to support the state budget, under an agreement signed at the Government Palace in #Kasbah by the finance minister & her #Saudi counterpart, in the presence of Premier Najla Bouden. #TAP_En pic.twitter.com/r4iuCUaw1a

— TAP news agency (@TapNewsAgency) July 20, 2023

Tunisia’s IMF deal

Tunisia intends to use the funds “to support the budget,” Tunisian Finance Minister Sihem Boughdiri said in remarks carried by TAP.

Tunisia’s dollar bonds jumped to their highest this year on the news.

The money comes at a sensitive time for Tunisia, which risks defaulting on its debt unless it wins final approval from the IMF for a $1.9bn bailout agreed in principle last year.

The IMF has waited months for authorities in Tunisia to submit a revised package of reforms and spending cuts.

But President Kais Saied has rejected what he called the “diktats” of the Washington-based lender and said an austerity program could spell more instability and hardship for Tunisians, throwing the deal into doubt.

Tunisia’s coffers could also get some help from local lenders. Parliament will vote Friday on a $131m loan from local banks to help fund the budget pending an IMF deal.

The Saudi aid comes after Tunisia’s top diplomat toured the Gulf earlier this week, meeting regional leaders and officials at sovereign wealth funds and economic development vehicles.

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