Specialized in financial auditing, the BofA Securities, formerly Bank of America Merrill Lynch, is the investment banking division of Bank of America. The latter has just published a damning report on the situation of public finances in Tunisia.
Tunisian economist Ezzedine Saïdane recalls that this financial institution is considered a benchmark in the United States and internationally in advice and risk management.
According to the bank’s report, Tunisia’s 2021 complementary budget highlights “ a drying up of the State’s financial resources, which should intensify in the absence of reforms and an agreement with the IMF “. After some efforts at the end of November on the part of the Najla Bouden government with a view to relaunching negotiations with the IMF, they are in fact currently at a standstill.
The same text provides that the country’s external financing deficit could reach 1.9 billion US dollars, or the equivalent of 5.6 billion dinars (4.3% of GDP) by the fourth quarter of the year. current year. This could lead to delinquencies and import shortages. These are already being felt, since more than 500 drugs, some of which are vital, are notably nowhere to be found in Tunisia.
“It should also be noted that the monetization of this gap would double the rate of central bank financing compared to 2020 and accelerate the decline in foreign exchange reserves”, continues BofA Securities.
Lack of economic vision
In addition, the report of the American bank estimates that the absence of a clear anchor point of the economic policy decreases the chances of success of a program of credit of the International Monetary Fund, at least in the short term.
« While it is important that President Kais Saïed has given the green light to officially initiate program talks with the IMF, the government’s room for maneuver remains uncertain, in part due to the ongoing political transition. », Deplores BofA, obviously very aware of the limits of the prerogatives of the Bouden government.
Further on, we can read that “ it was observed that regional financial support to Tunisia seems unlikely in the short term and that this was highlighted among other things by the lack of expression of interest after the visit of the head of government Najla Bouden to Saudi Arabia ».
The specter of the Paris Club is becoming clearer
Finally, the institution considers that any bilateral support provided to Tunisia can only be effective within the framework of a possible future restructuring of the public debt, carried out under the aegis of the Paris Club process, and that ” this could therefore have an economic blocking effect “, Warns the BofA Securities report. Clearly, the rescheduling of the debt, so dreaded by economists, would seem inevitable. ” Debt restructuring would have a long-term impact on the country’s sovereign rating », Fears Ezzedine Saïdane who recalls in this respect the similar case of Lebanon.
The Bank Of America classified the Tunisian debt at the end of last October in the category ” very high risk “. Thus the risk of default of payment of the sovereign debt of Tunisia, considered ” very probable », Is explained by a projection of the IMF over 15 years of the schedule of the external debt of the Tunisian State.
The external debt promises to be very high for the 6 years which will follow 2021, and by referring to the prospects of the current social, economic and political situation of Tunisia, the debt can only increase exponentially (40% of the GDP in 2011, 100% of GDP today) and “ Tunisia will inevitably be in a default position, if no initiative to implement corrective actions is taken », Concludes BofA.
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