Tunisia opposes IMF recommendations to eliminate subsidies on basic item

By: Dickson Arinze

April 14, 2023 7:02 AM

Tunisian President Kais Saied has rejected the International Monetary Fund's (IMF) "foreign diktats," which are harsh decrees imposed by a foreign entity, addressing the abolition of state subsidies on vital items, particularly petrol. Saied contended that such policies will exacerbate poverty in Tunisia, which is already deeply in debt.

"In terms of the IMF, foreign diktats that would increase poverty are unacceptable," Saied remarked.

In October 2022, the Tunisian government secured an agreement with the IMF for a $2 billion rescue package. The IMF board, however, has put the deal on hold due to concerns, notably the president's refusal to decrease subsidies on vital products such as food and fuel.

"It's true that some individuals who don't require subsidies benefit from it, but we can find other ways to ensure they get to those who do," Saied added.

Saied recounted→ how, in the 1980s, attempts to reduce subsidies culminated in violent riots after the government raised the price of bread.

When asked about alternatives to the agreement, he stated that Tunisians should be self-sufficient and that "social harmony is not a game."

Tunisian foreign bonds fell 4.6 cents in value following Saied's statements, reaching their lowest level in six months.
Background Information

The decision to reject the IMF rescue package may exacerbate the North African country's already grave economic problems.

As Saied's racist remarks caused violence against Sun-Saharan Africans, the World Bank halted future loans to Tunisia.

Tunisia's crisis has been blamed on corruption, and in reaction, Saied has shut down parliament, created a new cabinet, and rejected any sort of international intervention.