The facilities to be granted on an exceptional basis by the Central Bank of Tunisia (BCT) to the General Treasury of Tunisia should be geared towards development, recommended academic Ridha Chkondali. He also proposed entering into negotiations with bilateral donors and multilateral lenders in order to reassure the financial centre and regain a growth momentum. These comments come against a backdrop characterised by a recession in the country's growth, which reached 0.4% in 2023, according to the preliminary estimates of the National Institute of Statistics (INS), and 0.9% in 2023, according to the projections of the African Development Bank (AfDB). Tunisia considers raising $500 million from Saudi Arabia, $300 million from Algeria and $500 million from the African Export-Import Bank (Afreximbank), in addition to subordinated bonds. In an interview with TAP, Chkondali underlined the need to boost and prioritise the phosphate sector, by renewing the railway fleet. The aim is to help this sector regain its impetus and provide the State with the necessary foreign currency resources, he explained. He further pointed out that cutting the key interest rate by 100 basis points remains necessary to spur private investment, stressing the need to incite Tunisians living abroad to open foreign currency accounts. To give the economy a breath of fresh air, Chkondali deemed it necessary to reduce taxes for exporting companies, and to apply a total tax amnesty for foreign currency circulating on the parallel market. Tunisia also needs a programme of major reforms, based on the messages conveyed by the President of the Republic, he said, considering that this programme should cover three key files with a new Tunisian appraoch totally different from that of the International Monetary Fund (IMF). It is crucial to first reform the civil service by cutting notably the number of civil servants, the expert considered, adding that secondly, public companies must be reformed rather than sold off, by rationalising the management of public funds and eradicating corruption. He also underlined the need to improve the business climate by streamlining administrative procedures. Chkondali pointed out that the economic recession has affected all sectors of the economy, notably agriculture and fisheries, with a drop of less than 11%, as well as mining (-10%). Conversely, only the tourism and mechanical and electrical engineering sectors have posted improvements of 12.8% and 5.8%, respectively. Chkondali blamed the economic shrinkage on the approach taken by the current government, which focuses on debt repayment at the expense of economic growth and the creation of employment resources. As a result, the State has suffered additional losses of around a TND 1,000 billion in relation to tax resources, in addition to a loss of TND 1,000 billion caused by the fall in economic growth to 0.9% recorded in the Amending Finance Law, compared with the 1.8% estimated in the initial Finance Law for 2023, he pointed out. "We have only achieved less th an a quarter of what we estimate for 2023, i.e. 0.4%, rather than 1.8%, which means that there is a real threat to the Tunisian economy and to the soundness of public finances if we continue with the same approach as we adopted in 2023," Ridha Chkondali explained. This risk is increasing, he specified, especially as the State 2024 budget features financial deficits of TND 10.3 billion, which the Finance Ministry intends to cover with direct loans from the Central Bank. But in this case, the consequences could be serious if these direct loans are not intended to finance development expenditure, he warned. The second gap which "we have not yet confirmed, relates to the State's scheduled external borrowing resources of $1,401 million, or approximately TND 4,400 million," said Ridha Chkondali. He concluded that the recession in economic growth, which had reached 0.4% in 2023 compared with 1.8% estimated in the initial 2023 budget, i.e. less than a quarter, has led to an increase in the unemployment rate to 16. 4%. During Q4 of 2023, the unemployment rate hit 40.3%, a figure that Chkondali described as alarming and that calls for serious consideration, pointing out, however, a notable fall in the unemployment rate among higher education graduates, from 24.6% to 23.2%. Source: Agence Tunis Afrique Presse