Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Exclusive: Tunisia to issue up to $3 billion debt and push reforms this year, finance minister says

Stock Markets Jan 31, 2021 07:30AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
2/2 © Reuters. Tunisia's Finance Minister Ali Kooli attends an interview with Reuters in Tunis 2/2

By Tarek Amara and Angus McDowall

TUNIS (Reuters) - Tunisia will issue debt worth up to $3 billion this year and aims to roll over some existing credit arrangements while setting in train wider economic reforms, Finance Minister Ali Kooli told Reuters in an interview.

With a deficit estimated at 11.5% of gross domestic product last year and public debt at 90% of GDP, Tunisia plans reforms to cut its high public wage bill and subsidies and restructure poorly performing state-owned companies, Kooli said.

The COVID-19 pandemic, political infighting and ongoing protests over inequality have added to the pressure on the government, while foreign lenders and the powerful labour union have often made competing demands on reform.

"Our situation is tough, but it doesn't mean that we aren't in a position to pay salaries or reimburse our debt", said Kooli, adding that Tunisia could comfortably meet repayments due in the first half of 2021.

Tunisia's 2021 budget forecasts borrowing needs at 19.5 billion Tunisian dinars ($7.2 billion), including about $5 billion in foreign loans. It puts debt repayments due this year at 16 billion dinars, up from 11 billion dinars in 2020.

Kooli said Tunisia wants a new $1 billion loan guarantee arrangement from the United States, which he said could help it secure the $3 billion in bond issuance, the first time he has given that figure.

The government also hopes to reach agreement with the International Monetary Fund on a new financing programme, and he said recent Article IV consultations were a step towards that.

However, Kooli said Tunisia had not yet decided how much new international debt to seek and that it was taking steps to improve its credit rating and gain IMF blessing for the move.

"I believe there is a real possibility to go to the markets for at least $1 billion during 2021," he said, adding that the higher sum of $3 billion would also be possible.

Tunisia is looking at various instruments including a sukuk for the first time, a club deal, a specific action for the Asian market or a dollar-denominated bond issue, Kooli said, without elaborating.

The government may also issue, separately, a sukuk for the domestic market before July, he said, adding that it could be in the region of around 300 million dinars.


Tunisia will switch to targeted subsidies in coming months, he said, and will announce restructuring plans for state-owned companies after Ramadan, which this year ends in mid-May.

However, the pandemic may delay some reforms both to avoid increasing the economic pain for ordinary Tunisians and because it is not a good time to attract potential investment in state companies.

Targeted subsidies will involve distributing digital cards for lower-income Tunisians as well as other measures, he said.

However, the government is still assessing how many people require help, what price different products should be and how to avoid a big rise in inflation, he said.

Although Prime Minister Hichem Mechichi has already announced a new unit to take over state-owned companies from direct control by government ministries, the details of reforms will not be announced until they are finalised, Kooli said.

He confirmed the government would sell its share in some firms but did not identify them. He questioned whether the state needed to hold minority shares in companies, whether it needed to own stock in 12 banks, as now, or in gambling.

Any revenues raised by privatisation would be pumped back into other state-owned companies that the government wants to restructure, he said.

Tunisia's main labour union, the UGTT, has previously resisted any privatisation, but Kooli said he expected no trouble there, adding the government was "not looking for a fight".

On the public sector wage bill, Kooli said the government was looking at different ways to reduce it, for example by offering slightly lower pay for greatly reduced hours.

"The possibility to work half time and be paid a little bit more than half salary is an avenue we are considering," he said.

($1 = 2.7014 Tunisian dinars)

Exclusive: Tunisia to issue up to $3 billion debt and push reforms this year, finance minister says

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email