Saudi Arabia to Give Tunisia $500M Amid Economic Crisis July 20th, 2023
Via Al Monitor, an article on Tunisia’s economic lifeline from Saudi Arabia as it continues to seek help from the kingdom as well as the EU and the IMF as it battles debt and inflation:
Saudi Arabia announced $500 million in assistance to Tunisia on Thursday as the North African country continues to struggle with an economic and political crisis.
The Saudi ambassador to Tunisia, Abdel Aziz al-Saqer, told Al-Arabiya that the kingdom will provide a $400 million soft loan and a $100 million grant to Tunisia.
The Tunisian presidency also confirmed the news in a tweet.
The announcement came during Tunisian Foreign Minister Nabil Ammar’s visit to Saudi Arabia. Ammar also met with his Saudi counterpart, Prince Faisal bin Farhan, on Thursday.
A soft loan typically includes no interest or below-market-rate interes.
Why it matters:Tunisia is facing a mounting economic crisis. Like other countries in the region, the small North African nation is experiencing high inflation, as well as shortages of essentials.
Debt is also an issue. Tunisia has $2 billion in external debt that will be due this year. The credit rating agency Fitch said in March “that default is a real possibility.”
To gain outside help, the country is in talks with the International Monetary Fund on a $1.9 billion bailout. On Sunday, Tunisia and the European Union signed a “strategic partnership” on the economy as well as the flow of migrants from Africa to Europe.
Tunisia is also in the midst of an ongoing political crisis. President Kais Saied suspended parliament and dismissed the government in 2021 in an effort to sideline his opponents in the Islamist Ennahda party. The move was widely derided as a coup, and Saied has been consistently criticized by rights watchdogs for this and his subsequent moves, including a July 2022 referendum that granted him unchecked powers. In May, Ennahda leader Rachid Ghannouchi was sentenced to a year in prison.
Saudi Arabia, with its oil wealth, often provides financial support to countries in need. Earlier this month, Saudi Arabia and the United Arab Emirates allocated $6 billion to support investment in Iraq. The kingdom also deposited $5 billion in Egypt’s Central Bank and issued a directive to invest $1 billion in Pakistan last year.
Saudi Arabia also signed a $10 million loan agreement with the Bahamas on Thursday, according to the official Saudi Press Agency.
Know more: There is also an ongoing migration crisis in Tunisia. On Wednesday, Human Rights Watch accused Tunisian security forces of committing “serious abuses” against Black migrants and refugees from sub-Saharan Africa.
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