The former Governor of the Tunisian Central Bank, (BCT) has expressed concern that the government may struggle to meet wage demands of state employees over the coming months as external debt, a stagnant economy and the falling Dinar all threaten to push the country’s finances to breaking point.
Speaking on ExpressFM yesterday, Mustapha Kamel Nabli also urged the central bank’s Board of Directors, who he said had experienced up to five-fold pay increases in the face of the failing economy, to resign.
Nabli was also critical of the new Unity government, whose introduction he argued had transformed Tunisia from a Parliamentary to a Presidential political system, where President Beji Caid Essebsi continues to excercise substantial powers over parliament and the new government. He added that the external deficit of Tunisia is expected to reach its peak this year.
Rumors of a liquidity, (cash) crisis within Tunisia are not new. The country’s external debts currently amount to 27 billion dollars, the equivalent of around 50 billion Tunisian Dinars. More recently, the European Union agreed to a further loan of 500 million Euros to help the country meet payments on its existing debts and aid job creation. The International Monetary Fund, (IMF) has also lent the country 2.9 billion dollars to consolidate Tunisia’s economic growth.
Speaking to Tunisia Live, Professor of Economics at the Higher University of Carthage, said that the Government is running out of money: “The State budget is unbalanced and there will be difficulties in the payment of salaries of the public service in the months ahead”. He added, “Tunisia signed a document with the International Monetary Fund (IMF) in order to borrow 2.7 million Dollars, and the eligibility criteria prevent them from multiplying salaries.”
Chkandeli said that the economic growth is very slow and “the country is utterly mired in external debt”, due to political and economic instabilities, high rates of unemployment and issues with the Tunisian Dinar, which continues to fall against both the Dollar and the Euro. Furthermore, Chkandeli expressed concerns over a lack of foreign investment: “political and economic instabilities are a major concerns for investors needed to boost our economy.”
Fears over terrorist attacks after the Bardo and Sousse massacres have also severely impaired the tourism industry, a major source for government revenue and economic growth.
Confidence in the government’s ability to create a recovery program in order to repay its foreign and local debt fully and on time is lacking, Chkandeli argued.
Zaineb is a journalist in the Tunisia Live newsroom. She speaks Arabic, French and English.