February 12, 2020 / 4:02 PM / 10 days ago

Tunisia eyes IMF talks in March on sixth review of loan deal -minister

TUNIS, Feb 12 (Reuters) - Tunisia will invite the International Monetary Fund to talks in March over a sixth review of its IMF loan programme after its new government is formed following months of delay, Economic Reforms Minister Taoufik Rajhi said on Wednesday.

Tunisia struck a deal with the IMF in December 2016 for a $2.8 billion loan package to overhaul its sclerotic economy, including steps to cut chronic deficits and trim bloated public services.

The IMF disbursed the current programme’s last loan tranche worth $247 million in June last year.

Since then, negotiations on the sixth review of the deal have been stalled due a political crisis following the October election as parties struggled to strike a new coalition deal.

Prime Minister-designate Elyes Fakhakh is now expected to unveil the next cabinet on Friday after months of negotiations, clearing the way for negotiations with the IMF to proceed.

“We are ready for the sixth review...We are awaiting the formation of the government to formally invite the IMF delegation in March to start the review,” Rajhi told Reuters.

A sixth review deal with the IMF would allow Tunisia to mobilise financial resources for 2020 and obtain loans from other lenders, including the World Bank, African Development Bank and the European Union.

The North African country needs to borrow about $3 billion internationally in 2020 to meet spending commitments.

Discussions are expected to focus on Tunisia’s commitment to achieving 2.7% economic growth this year, reducing tax evasion, cutting subsidies especially in energy, and restructuring public companies grappling with expanding deficits.

Tunisia has been hailed as the Arab Spring’s only democratic success because street protests toppled autocrat Zine El Abidine Ben Ali in 2011 without triggering violent upheaval, as happened in Syria and Libya.

But since 2011, nine cabinets have failed to resolve Tunisia’s economic problems, which include high inflation and unemployment, and impatience is rising among lenders such as the IMF that have kept the country afloat. (Reporting by Tarek Amara Editing by Mark Heinrich)

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