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Algeria lends $300m to cash-strapped Tunisia

By AFP - Dec 14,2021 - Last updated at Dec 14,2021

TUNIS — Heavily indebted Tunisia said on Tuesday it had received a loan from oil-rich neighbour Algeria, the day before a visit by Algerian President Abdelmadjid Tebboune.

The official journal said that President Kais Saied had signed off a deal reached on December 9 for "a loan worth $300 million", around 266 million euros.

Tunisia's public finances have been battered by a decade of political instability, low investment and structural problems, with debts approaching 100 per cent of GDP and unemployment at 18 per cent.

Saied on July 25 sacked the government and seized an array of powers, but has not laid out a plan to rescue the country's dire economy, despite announcing plans on Monday night for constitutional reforms and new elections in 2022.

Tunisia's economy has grown at just 0.6 per cent a year since its 2011 revolution, while inflation has surged at six per cent a year.

An unwelcoming business environment has discouraged investors.

The COVID-19 pandemic made the situation in the North African country far worse, slashing jobs in the vital tourism sector, high commodity prices have hurt reserves, and a drought has battered farmers.

Tunis has received economic aid from the European Union and is seeking its fourth aid programme in 10 years from the International Monetary Fund, aiming to receive a loan of nearly $4 billion before the end of the year.

In October a central bank official said Tunis was in discussions with Emirati and Saudi officials for financial assistance, but no such programme has been announced to date.

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