Tunisia receives $1.2 billion loan from Islamic finance group

Tunisia has secured a $1.2 billion lifeline from the International Islamic Trade Finance Corporation (ITFC) to bolster its ailing economy, AFP reports citing a statement from Tunisia’s economy ministry. Spread over three years, the loan aims to aid state-owned enterprises in importing crucial raw materials like crude oil and petroleum products. The country is heavily dependent on imports of food and energy. The government controls over 100 public companies and subsidizes several essential products such as fuel and basic foodstuffs likesugar and cereals.

The deal was signed Sunday in Riyadh by Tunisian Economy Minister Feryel Ouerghi and Hani Salem Sonbol, the CEO of the ITFC which is a member of the Islamic Development Bank Group.

Tunisia has been mired for years in a sustained economic crisis, exacerbated by the COVID-19 pandemic and the effects of the war in Ukraine. The North African country currently has a national debt nearing 80 percent of GDP and annual inflation at 10 percent.