AfDB Supports Macroeconomic Stability Consolidation and Private Sector Growth in Tunisia

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Tunis, 21 September 2005 – The Board of Directors of the African Development Bank (ADB) on Wednesday approved a loan of 117 million euros to finance the Third Competitiveness Support Programme in Tunisia aimed at helping the country achieve an average annual GDP growth rate of 5.2% during the period 2005-2006.

The programme will focus on the implementation of three fundamental and interdependent orientations of the Government’s policy in economic development, aimed at ensuring increased private sector investments within the framework of the Plan.

These orientations are:

- Maintain a stable and responsive macroeconomic framework, mainly through fiscal consolidation and strengthening Tunisia’s medium term budgetary framework;

- Improve the private sector investment climate and encourage new investment opportunities;

- Strengthen the financial sector’s contribution to the financing of growth by supporting the implementation of measures to cover up the banking system’s non-performing loans and by developing alternative sources of financing, especially capital markets.

The combined effects of these measures should make a positive impact on private sector competitiveness and economic growth, thus contributing to employment creation and poverty reduction.  It will be an important means of institutional development for both the sectors directly concerned and the Tunisian administration itself by improving the environment for private investment and enhancing equality of opportunities and access to employment as a basic principle of the country’s economic and social governance.

Tunisia’s financing requirements amount to about US$ 3,249 million in 2005 and US$ 3,576 million in 2006. It is envisaged that external resource requirements will be covered mainly by medium and long-term public and private loan disbursements in the amount of US$ 1,904 million, foreign direct investments amounting to US$ 1,560 million and grants for the balance of US$ 240 million. The World Bank and the European Union are also supporting the Third Competitiveness Programme with loans of US$ 150 million and Euro 78 million, respectively.

ADB operations in Tunisia started in 1968. To date, the ADB has committed a total amount of 1.84 billion US $ for 54 operations.

Project Information Sheet

- Implementation Agency: Ministry of Development and International Cooperation

- Procurement of Goods and Services: The loan resources will be used to finance the importation of goods and services with the exception of those indicated in the list of non-eligible goods.

In the case of public tenders, any supply of goods and services equal to or higher than UA 4 million will be done by international tender, in line with Bank rules.

An exception will be made for petroleum products and food items for which specific international trade practices exist. Resources devoted to these two types of products will, however, be limited to 30% of the loan amount.

Any supply procured by public institutions at an estimated cost less than UA 4 million will be done in accordance with the procedure normally used by the borrower and acceptable to the Bank. Tenders for supplies to be provided by private companies will be done in accordance with the procedures usually followed by the concerned supplier.