Tunisia has repaid TND 18.1 billion in external debts since 2019, including a $1 billion bond due in January 2025. By early 2025, it has addressed 1/5 of its public debt commitments for the year. Future repayments include various bonds until 2033, aimed at reducing the external debt ratio below 50% of GDP, while the country shifts to more domestic borrowing and avoids international bond issuance since 2019.
Tunisia has successfully repaid a total of TND 18.1 billion in external debts incurred from 2019 to the present, as articulated by Mohamed Salah Souilem, the former Director General of Monetary Policy at the Central Bank of Tunisia. These loans, comprised of approximately $3.23 billion, €1.75 billion, and JPY 97 billion, demonstrate Tunisia’s capacity to manage significant financial obligations within a relatively short timeframe (2019-2025).
On January 30, 2025, Tunisia repaid a notable $1 billion financial issue, which was contracted in January 2015 over a decade term. According to Souilem, the remaining debts for the year consist primarily of bilateral and multilateral loans, which involve smaller repayment amounts. By the first month of 2025, Tunisia managed to complete 1/5 of its public debt servicing obligations for the year, equating to TND 5 billion out of a total TND 25 billion.
The repayment process is quite demanding for Tunisia, a smaller economy, as it involves prioritizing large-scale bond issues that require principal repayment in a single installment upon maturity. Souilem noted potential concerns raised by experts regarding Tunisia’s capacity to meet its financial obligations and the country’s decision to forego seeking IMF support may have contributed to these apprehensions.
Looking ahead, Tunisia faces upcoming repayments of a euro-denominated bond worth €700 million due in 2026 and a $150 million dollar bond in 2027, alongside several smaller yen-denominated issues maturing from 2027 to 2033. Completing these repayments will allow Tunisia to honor all its bond issues historically offered on international markets, causing its external debt ratio to decrease from 69% of GDP in 2018 to below 50% in the next few years.
In recent years, Tunisia has shifted its borrowing strategy towards domestic sources, avoiding international bond issuance since 2019. While this domestic focus helps reduce external debt and exchange rate risks, it raises concerns over inflation, purchasing power of citizens, and limits private sector financing. Furthermore, foreign currency reserves are crucial for meeting foreign debt obligations and facilitating imports, acting as a buffer against economic shocks.
Tunisia has displayed resilience by effectively managing its external debt repayments since 2019, indicating a strong commitment to financial obligations despite economic challenges. The shift toward domestic borrowing may help mitigate risks associated with foreign debt but also prompts concerns regarding overall economic growth and financing capabilities. Future debt repayments will significantly influence the country’s external debt ratio as Tunisia aims to stabilize its financial standing in global markets.
Original Source: www.zawya.com
