International Monetary Fund close to giving $1.78 billion in aid to Tunisia

The International Monetary Fund announced on Monday that they are close to coming to an agreement with Tunisia on a plan for “preventative” help amounting to $1.78 billion. The money will aim to support the “transitional process” in the country and help prevent possible external “shocks”.

At the end of a two-week visit, an IMF delegation to Tunisia gave a statement saying that “negotiations to reach an agreement to confirm a “preventative” grant of $1.78 billion are at an advanced stage.”

The IMF also added that the agreement would be finalized “within the next few weeks” in order for it to be presented to the Fund’s Board of Directors, which includes 188 countries, for approval in March.

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According to the IMF, this aid plan aims to help Tunisia during the transitional phase it is going through following the Jasmine Revolution that overthrew President Zine El Abidine Ben Ali two years ago. It will also help them “if necessary” to face “external shocks that may arise from international situations.”

On his part, the Governor of the Central Bank of Tunisia, Chedly Ayari, stressed during a press conference to view the outline of the agreement held in the Tunisian capital that “Tunisia will resort preventatively to the IMF resources.”

Ayari also added, as quoted by the official news agency, that “discussions are on-going with the IMF regarding a number of important points, however we are progressing towards forming this agreement.”

The governor also confirmed that the IMF is not lending the money for specific reforms to be made, rather it “will only support the reforms made by the government.”

According to a statement made by the Central bank of Tunisia reported by the official agency, the “financial resources” provided by the IMF to Tunisia “will be repaid, in the event it is used, on a five year basis, with a three year grace period and with an interest rate of about 1.1%.”

After witnessing a decline in 2011, the beginning of the year when Ben Ali was overthrown, Tunisia expects its economy to grow this year, but the country still has many challenges to overcome, including an unemployment rate of about 18%.