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AfDB mobilises 377 million euros to boost inclusive growth in Tunisia

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On Thursday, November 19, the African Development Bank Group (AfDB) and the Tunisian Government signed six funding agreements in loans and grants to a total of €377 million, or about 830 million Tunisian dinars. The signing ceremony was co-chaired by Yassine Brahim, Tunisian Minister of Development, Investment and International Cooperation, and AfDB North Africa Regional Director Jacob Kolster, in the presence of the Minister of Development, Housing and Spatial Planning, Mohamed Salah Arfaoui.

Introducing the ceremony, Jacob Kolster said, “This funding forms part of the Bank’s support for Tunisia.” It will support the country in its move towards accelerated, inclusive growth by helping national efforts for regional development and the establishment of an environment conducive to job creation. The various projects covered by these agreements are in line with the pillars of the AfDB intervention strategy in Tunisia of infrastructure and governance.

Yassine Brahim stressed “the singular importance of these agreements for Tunisia,” because they were focused on “the priorities.” He also commended AfDB for the “tireless efforts it has continuously made to support the country.”

By supporting implementation of job-creating growth and a gradual reduction in regional disparities, the Programme of Budget Support for Regional Development and Job Creation in Tunisia (PADRCE) will promote the improvement of equitable access to economic opportunities and social services in order to reduce social and regional inequalities. Totalling €183 million in the form of a loan made available in a single tranche to the Tunisian treasury, PADRCE will contribute to the upgrading of regional administrations, to beginning the process of decentralisation and to improving the targeting of social assistance programmes. The programme will also contribute to a reduction in the rate of unemployment from 15% in 2015 to 14% in 2017, together with an increase in the rate of graduate employment from 68.6% in 2014 to 70% in 2017. The programme targets 235,000 families that are potential beneficiaries of social assistance, 33,000 women who are potential beneficiaries of micro-credits and 58,000 graduates from higher education per year, 66% of whom are women and holders of vocational qualifications.

Three other agreements concern the Road Infrastructure Modernisation Project (PMIR). They form part of the completion of actions undertaken since the late 1990s to upgrade the classified road network, with the sustained support of the AfDB. The overall cost of PMIR is €382.26 million, €191.63 million of which was financed by the Tunisian State, €144 million by an AfDB loan, €46.12 million by a loan from the resources of the Africa Growing Together Fund (AGTF) co-financed by AfDB and the People’s Bank of China (PBOC), and €1.5 million from a grant from the Technical Assistance Fund, for funding a study on the upgrading of the road sub-sector. Implementation of the project, scheduled to take five years between 2016 and 2020, will improve the mobility of users of the classified road network and strengthen the resilience of road infrastructure to the effects of climate change. It will also contribute to safeguarding the existing road system while promoting intraregional and inter-regional trade and reducing regional disparities. This project will refurbish 719 kilometres of classified roads, most of which are in the governorates of the interior of Tunisia (West, Centre-West and North-West) that are the least well-equipped in economic infrastructure. The PMIR is also intended to upgrade 23 engineering structures on the classified network to make them more resilient to the effects of climate change and ensure they have the capacity to cope with the level of service and expected traffic on the network.

The final two grant agreements, to a value of €1.012 million each in the form of technical assistance, form part of the development of a new economic model for Tunisia. The first grant, for funding a study to support promising markets, will be aimed at determining the sectoral strategy to improve the competitiveness of the productive fabric and the acceleration of the process of economic transformation. The second grant, for funding a study to support the development of an industrial policy, will enable the formalisation of a new industrial and innovation policy for Tunisia to 2030 and a communication strategy.

AfDB is one of the long-standing partners of Tunisia, the country that hosted its temporary headquarters from 2003 to 2014. A founding member of AfDB, Tunisia is one of its three biggest recipients of funds. Since the 2011 revolution the Bank has invested more than €1.5 billion, or about 3.3 billion Tunisian dinars, to support the country's transition and has maintained a constant dialogue with its stakeholders. To date, the active portfolio of the AfDB Group comprises 40 operations, including 17 projects financed by AfDB loans totalling €1.5 billion; of these, €243.44 million are private sector loans and there are twenty-three technical assistance projects totalling €22.17 million. Regarding the sectoral allocation of the portfolio, the Bank's funds are primarily invested in the sectors of transport (49%), the private sector (16%), the multi-sector (12%), water and sanitation (9%), energy (7%), agriculture (4%) and SME financing (3%).

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