Summary:

On 6 January 2024, The African Development Bank approved a $80.16 million loan to Tunisia to finance the third phase of the Road Infrastructure Modernization Program (PMIR) which aims to improve road infrastructure between Tunisia’s central coast and western interior regions. 

The third phase of the PMIR project aims to reinforce 188.9Km of national and regional roads in the seven governorates of Kairouan, Sfax, Kef, Siliana, Kasserine, Gafsa, and Sousse to link interior and coastal cities and foster economic integration of Tunisia’s five districts. The third phase is scheduled to run from 2025 to 2030. 

The AFDB noted that the project will contribute to two of the bank’s “High5” operational priorities, namely “integrating Africa” and “improving the quality of life of people in Africa”, in support of the bank’s broader vision for a prosperous, inclusive, resilient, and integrated Africa. 

Previously, in September 2024, the AFDB reached two agreements with Tunisia to support efforts to create employment opportunities. 

Outlook: 

The recent loan proves the commitment of the AFDB to support Tunisia in its development plans by continuing to be an active creditor with affordable repayment conditions.  

The PMIR project, which started in 2015, will help integrate Tunisia’s interior and coastal regions, and reduce economic and social disparities that have continually frustrated residents in the interior. Improving road and transport infrastructure in the border region near Algeria will also likely encourage additional cross-border trade. 

Tunisia is likely to continue seeking financial support from international creditors to its infrastructure development plans as the state’s budget does not support these expenditures without loans. 

However, repaying external debts is one of the main causes of the current economic challenges in Tunisia and will continue straining the country’s budget if projects funded by loans do not lead to more substantive economic activity and growth.  

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