Tunisia offered infrastructure and development projects worth 1.99bn dinars ($1.26bn) to various Arab funds during an Arab ministers’ summit in Tunis yesterday, a government official said.
“It is a projects package in many sectors which we will propose to different Arab funds for financing to stimulate our economy,” said Noureddine Zekri, secretary for international co-operation.
The package includes an investment of 660mn dinars to build a 600-MW gas-fired power plant in Mornaguia, near the capital Tunis. The government is also planning to invest 758mn dinars in infrastructure and roads across the country, according to a government document seen by Reuters.
Three years after an uprising that inspired the “Arab Spring” revolutions, Tunisia is on its way to political stability with a new constitution and the promise of elections later this year.
The caretaker government, led by Prime Minister Mehdi Jomaa, hopes to boost economic growth to stave off any social pressures and protests for more opportunities and over high prices. Tunisia’s budget deficit is set to grow to 8% of gross domestic product this year, mostly due to public worker wage costs and subsidies which are a hangover from former Tunisian autocrat Zine El-Abidine Ben Ali ousted in 2011.
Meantime, Tunisia will get $250mn worth of loan guarantees from Japan before the summer, the country’s finance minister said.
Japan is the second country to back Tunisia’s loans after the US said last week it would provide a new loan guarantee worth about $500mn. The North African country is seeking to plug huge deficits following its 2011 uprising.
Finance Minister Hakim Ben Hammouda declined to give further details on whether the guarantees were to be used for bond sales or to back other loans from international lenders.
The loan guarantees come more than three years after street protests drove Ben Ali from power in 2011, sparking a wave of similar uprisings across North Africa and the Middle East.
Tunisia plans to issue around $1.8bn in new foreign bonds, including $500mn in Islamic bonds.