Tunisia's Minister of Finance, Sihem Boughdiri Nemsia, attends a question session in parliament. Photo: Tunisian parliament
Tunisia's Minister of Finance, Sihem Boughdiri Nemsia, attends a question session in parliament. Photo: Tunisian parliament
Tunisia's Minister of Finance, Sihem Boughdiri Nemsia, attends a question session in parliament. Photo: Tunisian parliament
Tunisia's Minister of Finance, Sihem Boughdiri Nemsia, attends a question session in parliament. Photo: Tunisian parliament

MENA

Tunisia

Tunisian government asked to propose amendments to 2023 budget

Parliament requested changes after government officials revealed that public expenditure had risen despite plans to reduce spending

Ghaya Ben Mbarek
Ghaya Ben Mbarek
Tunis

June 23, 2023

  • English
  • Arabic

Tunisia's government will have to present a bill to amend the 2023 budget in the coming days, the parliament said on Thursday after President Kais Saied again expressed concern about reforms sought by the International Monetary Fund for a $1.9 billion bailout of the country's troubled economy.

The request for changes was made by the House of Representatives after its finance committee questioned the Ministry of Finance over the progress made in implementing the current 2023 budget and sought updates on negotiations with the IMF.

The budget, which was published by the Economy Ministry and approved by Mr Saied in December, sought to reduce expenditure on state subsidies by 26.4 per cent to 8.8 billion dinars ($2.84 billion) and raise tax revenue by 12.5 per cent to 40 billion dinars.

The budget was criticised by ordinary Tunisians as well as experts, who saw it as being geared towards fulfilling the IMF’s conditions for a bailout.

Tunisia's economic crisis has caused shortages of fuel and essential goods as the state struggles to pay suppliers.

Government representatives told the finance committee on Thursday that public expenditure had increased by 5.7 per cent by the end of May compared with the same period in 2022.

Officials said the increased spending and public finance difficulties resulted from the accumulation of external factors, including the Covid-19 pandemic and the war in Ukraine.

They said an increase in public debt over the past decade had prevented the recovery of growth rates and placed further pressure on the 2023 budget, which has been suffering a deficit due to lack of external funds.

Following these explanations, parliament asked the government to submit an amendment bill for the current budget before discussions can begin on next year’s.

Hopes of an IMF bailout, for which a staff-level agreement was reached in October, have faded amid stalled negotiations and Mr Saied's public criticism of the government’s reform plans.

Mr Saied reiterated his concerns over the IMF’s conditions at the Paris Summit for a New Global Financing Pact on Thursday.

“These financial support recipes are unacceptable", he told IMF managing director Kristalina Georgieva, adding that the conditions constitute "a threat to civil peace, which is priceless for us”.

More from Rashmee Roshan Lall
The bio

Favourite book: Peter Rabbit. I used to read it to my three children and still read it myself. If I am feeling down it brings back good memories.

Best thing about your job: Getting to help people. My mum always told me never to pass up an opportunity to do a good deed.

Best part of life in the UAE: The weather. The constant sunshine is amazing and there is always something to do, you have so many options when it comes to how to spend your day.

Favourite holiday destination: Malaysia. I went there for my honeymoon and ended up volunteering to teach local children for a few hours each day. It is such a special place and I plan to retire there one day.

While you're here
While you're here
MATCH INFO

Who: UAE v USA
What: first T20 international
When: Friday, 2pm
Where: ICC Academy in Dubai

On Women's Day
UAE currency: the story behind the money in your pockets
While you're here
UAE%20v%20West%20Indies
%3Cp%3EFirst%20ODI%20-%20Sunday%2C%20June%204%20%0D%3Cbr%3ESecond%20ODI%20-%20Tuesday%2C%20June%206%20%0D%3Cbr%3EThird%20ODI%20-%20Friday%2C%20June%209%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3EMatches%20at%20Sharjah%20Cricket%20Stadium.%20All%20games%20start%20at%204.30pm%0D%3Cbr%3E%0D%3Cbr%3E%3Cstrong%3EUAE%20squad%3C%2Fstrong%3E%0D%3Cbr%3EMuhammad%20Waseem%20(captain)%2C%20Aayan%20Khan%2C%20Adithya%20Shetty%2C%20Ali%20Naseer%2C%20Ansh%20Tandon%2C%20Aryansh%20Sharma%2C%20Asif%20Khan%2C%20Basil%20Hameed%2C%20Ethan%20D%E2%80%99Souza%2C%20Fahad%20Nawaz%2C%20Jonathan%20Figy%2C%20Junaid%20Siddique%2C%20Karthik%20Meiyappan%2C%20Lovepreet%20Singh%2C%20Matiullah%2C%20Mohammed%20Faraazuddin%2C%20Muhammad%20Jawadullah%2C%20Rameez%20Shahzad%2C%20Rohan%20Mustafa%2C%20Sanchit%20Sharma%2C%20Vriitya%20Aravind%2C%20Zahoor%20Khan%0D%3C%2Fp%3E%0A

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

UAE currency: the story behind the money in your pockets
While you're here
THE%20SPECS
%3Cp%3EEngine%3A%203-litre%20V6%20turbo%20(standard%20model%2C%20E-hybrid)%3B%204-litre%20V8%20biturbo%20(S)%0D%3Cbr%3EPower%3A%20350hp%20(standard)%3B%20463hp%20(E-hybrid)%3B%20467hp%20(S)%0D%3Cbr%3ETorque%3A%20500Nm%20(standard)%3B%20650Nm%20(E-hybrid)%3B%20600Nm%20(S)%0D%0D%3Cbr%3EPrice%3A%20From%20Dh368%2C500%0D%3Cbr%3EOn%20sale%3A%20Now%3C%2Fp%3E%0A
Updated: June 23, 2023, 2:18 PM
TunisiaIMFKais Saied