Tunisia is going through an alarming financial crisis due to the unprecedented disagreement between the Central Bank of Tunisia and the government over the draft amendment budget for the current year;
While the government seeks to owe Tunisian banks to finance the budget deficit, the Central Bank of Tunisia refuses to recapitalize banks in preparation for lending to them.
This dispute erupted after the imaginative rise of the budget deficit this year, which reached 14 billion dinars (5 billion dollars), or 13.4% of the gross product, while the original budget was estimated at only 3%.
The government explains its increase in spending social and economic aid due to Corona.
Accordingly, the government plans to mobilize additional resources of about 10 billion dinars (3.5 billion dollars) to finance the deficit during the remainder of this year, bringing the total borrowing resources from the internal market this year to 14.2 billion dinars (5 billion dollars) and about 7 billion dinars of borrowing. Outer.
Excessive debt
However, the Central Bank of Tunisia, whose statute prohibits it from directly financing the budget, and controls its functions by controlling prices and contributing to financial stability;
He rejects the government's efforts to borrow these huge sums, warning of high inflation, the deterioration of the dinar, and the decline of the state's sovereign number.
Commenting on this crisis, the Governor of the Central Bank of Tunisia, Marwan al-Abbasi, told members of the Finance Committee of the Tunisian Parliament, last Wednesday, that the draft amendment budget includes a deficit that far exceeds the repercussions of the Corona pandemic, which requires excessive internal borrowing in a short time.
And because of the difficulty of borrowing from abroad as a result of the financial crisis in light of the outbreak of the Corona epidemic, and the decline of Tunisia's sovereign rating;
Al-Abbasi believes that the government's resort to internal borrowing is placing high pressure on the financial liquidity, instead of directing it to pay investment and employment, calling on the government to review the 2020 budget and reduce spending instead of debt.
Al-Abbasi tried to justify his rejection of the government's plans to finance the budget deficit by saying that its measures will further deepen the financial crisis, affect the purchasing power of Tunisians, and destroy the effort and work that has continued for years by the Central Bank to reduce the inflation rate to 5.4% and strengthen the value of the Tunisian dinar.
Al-Abbasi presents data on the financial situation of Tunisia during a meeting of the Parliament's Finance Committee (Tunisian Press)
Sovereignty is threatened
Commenting on this outbreak, former Finance Minister Hakim bin Hammouda tells Al-Jazeera Net that the financial situation in Tunisia goes beyond the classic economic crisis, to rise to an issue threatening national security due to the exacerbation of the budget deficit and the high debt ratio to more than 90%.
Hakim Ben Hammouda affirms that Tunisia is currently experiencing its most difficult period in modern history in terms of the exacerbation of the debt, which was in the range of 72% in 2019, indicating that if the dispute with the Central Bank continues, “this situation will lead the country towards rescheduling its debts, which is the beginning of the road towards bankruptcy. ".
He also says that entering this path will directly affect national sovereignty in economic decision-making, and will make its negotiations - whether with the IMF or with international financial institutions - harsh, and with difficult conditions.
Given its major financial imbalances, and a decline in its sovereign rating.
He adds that even if the government managed to overcome this year's budget deficit financing crisis by borrowing from Tunisian banks, this will have dire implications for private investment and financing economic institutions, given that the government absorbs a large part of the liquidity to meet its expenditures.
Debt scheduling
Economist Ezzedine Saedan believes that Tunisia is going through a great dilemma due to the financial imbalance of the state, and the occurrence of this dispute between the central bank and the government over financing the budget deficit, expressing his fear that the financial crisis will cause Tunisia's debt to be rescheduled.
Saeedan continues to Al-Jazeera Net that "Tunisia has not delayed even one hour from fulfilling its financial obligations with the outside since independence, and if we reach the stage of rescheduling debts due to this difficult financial situation, then what a disappointment the endeavor will be!"
He criticized the delay in the process of reforming the economy due to political tensions and punishing governments in a short time.
This expert attributes the financial imbalance and the rise in the budget deficit from year to year to the rise in the state's expenditures in a large manner inconsistent with the economic growth, which declined significantly this year.
Saidane believes that the government will not be able to provide additional financial resources to fill the current budget deficit in the event that the Central Bank of Tunisia does not agree to refinance Tunisian banks, saying, "This is unprecedented, but it is not possible for the state to continue without having an adjusting budget." .