Summary:

On 20 July 2023, Saudi Arabia announced plans to provide $500 million in financial assistance to encourage stability in Tunisia.

The deal was signed in Tunis during a visit by Saudi Finance Minister Mohammed al-Jadaan.

The deal reportedly includes $400 million in loans and an additional $100 million as a “grant.” Conditions regarding the use of the funds were not publicly available.

The Minister also announced plans for additional meetings in coming weeks to discuss support from the Saudi Development Fund and potentially other Arab countries as well.

The deal signing came on the heels of a diplomatic circuit around the Middle East by Tunisian Foreign Minister Nabil Ammar who made stops in Saudi Arabia, Kuwait, and the United Arab Emirates.

The visits to Kuwait and the UAE included promises of increased cooperation, but have not yet produced announcements of financial assistance. Following Nabil Ammar’s visit to the UAE, Tunisian President Kais Saied spoke with UAE President Sheikh Mohamed bin Zayed al Nahyan on 21 July 2023.

It remains unclear if concessions or agreements were made in order to secure Saudi financing.

Outlook:  

While a $500 million influx of cash does not extract Tunisia from the current economic crisis, it creates relief for the government that has struggled to meet its obligations.

The Saudi assistance could help buy Tunisia time to work toward a new International Monetary Fund (IMF) agreement or secure other sources of funding. However, the fundamental challenges within the economy remain and such assistance will only delay the need for reforms to create a more sustainable system that is not reliant on loans or bailouts.

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