The International Monetary Fund (IMF) and Tunisia are in the advanced stages of talks over a $2.8 billion credit over four years to help support the country’s economic reform program.
A visiting IMF delegation led by IMF Mission Head Amine Mati said Thursday that it would focus on finalizing Tunisia’s reform priorities and financing needs for this year. “Moving ahead with economic reform is crucial as the Tunisian economy confronts several significant challenges. Economic growth is held back by investors’ wait-and-see attitude and regional uncertainties,” the IMF said in a statement. “Additional financing will be needed to rebuild buffers, while at the same time correcting structural inefficiencies that lower Tunisia’s ability to create jobs and future growth potential.” Mati said the program will foster inclusive growth and reduce regional disparities. During the visit, the mission met with government and central bank officials, members of parliament, representatives from the private sector, trade unions, political parties, and civil society. [Reuters, Bloomberg, TAP, 3/3/2016]
A new trade deal with Europe, foreign investment, and public works are set to put 200,000 Syrian refugees to work in Jordan. In exchange for allowing Syrian refugees to work legally, Jordanian products will get easier access to European markets, which will create new investment and jobs and help thousands of Jordanian factories whose exports have plummeted recently. Jordan will also receive hundreds of millions of dollars in grants and cheap loans for development projects. The EU is to finalize the new rules before August, EU Ambassador to Jordan Andrea Matteo Fontana said. Greater access to Europe is intended to encourage investment in five industrial zones in Jordan, but investor response is hard to predict. “At the end of the day, this is a business decision from the private sector,” Fontana said. The plan calls for 150,000 jobs for Syrians to be created in the industrial zones and 50,000 in labor-intensive projects, such as building schools and water cisterns, he said. Coordinator of the International Labor Organization in Jordan Patrick Daru said he believes the job target could be reached in 36 months. [AP, 3/4/2016]
The Egyptian pound slipped to its weakest rate on the black market this week, raising pressure on the Central Bank of Egypt (CBE) to devalue the currency as firms complain of problems clearing imports and repatriating earnings. The CBE sold $38.8 million at a cut-off price of 7.7301 pounds to the dollar at its official auction on Thursday. However the black market rate weakened significantly, with traders quoting 9.50 pounds to the dollar against 9.30 to 9.34 on Tuesday. “There is a lot of demand to buy dollars but very little on offer. Those who have dollars are holding onto them and that is contributing significantly to the rapid leaps in price,” said one black market trader. “We think the latest moves suggest that a long-awaited devaluation of the pound may be just around the corner,” London-based Capital Economics said. Foreign reserves have also more than halved since January 2011, helping to prompt black market speculation against the pound. Egypt’s net foreign reserves increased slightly to $16.53 billion at the end of February from $16.48 billion in January the Central Bank of Egypt said Thursday. [Reuters, 3/3/2016]
Iraq will pay foreign oil companies about $2 billion in remaining arrears for 2015 in April and expects to reach an agreement over contracts midway through the year, Deputy Oil Minister Fayadh al-Nema said. International firms like BP, Royal Dutch Shell, ExxonMobil, Eni, and Lukoil operate in Iraq’s southern oilfields under service contracts and are paid a fixed dollar fee for additional volumes produced. The agreements are straining Baghdad’s finances as revenues fall due to low oil prices. Iraq is in talks with foreign companies to link the fees they receive for developing its fields to crude prices. “The new amended agreement will help to prevent inflating production costs and getting Iraq in debt,” al-Nema said. He said handing over drilling operations to Iraq’s state-run firm or replacing foreign workers with locals would reduce company costs. Nema also forecast Iraq’s output rise in 2016 would be “very modest” due to the reduced investment budgets of foreign contractors. [Reuters, 3/4/2016]
Also of interest
Saudi Arabia expects GDP growth around 2 percent this year | Reuters
Egypt’s poorest struggle to find rice amid hoarding | Reuters
Egypt may stop sending inspectors abroad to clear imported wheat | Reuters
Tunisia, IBRD sign loan agreement to improve job prospects for graduates | TAP
Algeria defends bond issue | Algerie Presse Service
Turkey’s annual inflation rate decreases in February | Anadolu Agency
Bad loans in Turkey seen as worsening tourism situation | Bloomberg
IMF says in advanced talks with Tunisia over $2.8 billion
The International Monetary Fund (IMF) and Tunisia are in the advanced stages of talks over a $2.8 billion credit over four years to help support the country’s economic reform program. A visiting IMF delegation led by IMF Mission Head Amine Mati said Thursday that it would focus on finalizing Tunisia’s reform priorities and financing needs for this year. “Moving ahead with economic reform is crucial as the Tunisian economy confronts several significant challenges. Economic growth is held back by investors’ wait-and-see attitude and regional uncertainties,” the IMF said in a statement. “Additional financing will be needed to rebuild buffers, while at the same time correcting structural inefficiencies that lower Tunisia’s ability to create jobs and future growth potential.” Mati said the program will foster inclusive growth and reduce regional disparities. During the visit, the mission met with government and central bank officials, members of parliament, representatives from the private sector, trade unions, political parties, and civil society. [Reuters, Bloomberg, TAP, 3/3/2016]
Jordan is test ground for jobs program for Syrian refugees
A new trade deal with Europe, foreign investment, and public works are set to put 200,000 Syrian refugees to work in Jordan. In exchange for allowing Syrian refugees to work legally, Jordanian products will get easier access to European markets, which will create new investment and jobs and help thousands of Jordanian factories whose exports have plummeted recently. Jordan will also receive hundreds of millions of dollars in grants and cheap loans for development projects. The EU is to finalize the new rules before August, EU Ambassador to Jordan Andrea Matteo Fontana said. Greater access to Europe is intended to encourage investment in five industrial zones in Jordan, but investor response is hard to predict. “At the end of the day, this is a business decision from the private sector,” Fontana said. The plan calls for 150,000 jobs for Syrians to be created in the industrial zones and 50,000 in labor-intensive projects, such as building schools and water cisterns, he said. Coordinator of the International Labor Organization in Jordan Patrick Daru said he believes the job target could be reached in 36 months. [AP, 3/4/2016]
Devaluation pressure mounts on Egypt as pounds weakens on black market
The Egyptian pound slipped to its weakest rate on the black market this week, raising pressure on the Central Bank of Egypt (CBE) to devalue the currency as firms complain of problems clearing imports and repatriating earnings. The CBE sold $38.8 million at a cut-off price of 7.7301 pounds to the dollar at its official auction on Thursday. However the black market rate weakened significantly, with traders quoting 9.50 pounds to the dollar against 9.30 to 9.34 on Tuesday. “There is a lot of demand to buy dollars but very little on offer. Those who have dollars are holding onto them and that is contributing significantly to the rapid leaps in price,” said one black market trader. “We think the latest moves suggest that a long-awaited devaluation of the pound may be just around the corner,” London-based Capital Economics said. Foreign reserves have also more than halved since January 2011, helping to prompt black market speculation against the pound. Egypt’s net foreign reserves increased slightly to $16.53 billion at the end of February from $16.48 billion in January the Central Bank of Egypt said Thursday. [Reuters, 3/3/2016]
Iraq to pay $2 billion in arrears to foreign companies
Iraq will pay foreign oil companies about $2 billion in remaining arrears for 2015 in April and expects to reach an agreement over contracts midway through the year, Deputy Oil Minister Fayadh al-Nema said. International firms like BP, Royal Dutch Shell, ExxonMobil, Eni, and Lukoil operate in Iraq’s southern oilfields under service contracts and are paid a fixed dollar fee for additional volumes produced. The agreements are straining Baghdad’s finances as revenues fall due to low oil prices. Iraq is in talks with foreign companies to link the fees they receive for developing its fields to crude prices. “The new amended agreement will help to prevent inflating production costs and getting Iraq in debt,” al-Nema said. He said handing over drilling operations to Iraq’s state-run firm or replacing foreign workers with locals would reduce company costs. Nema also forecast Iraq’s output rise in 2016 would be “very modest” due to the reduced investment budgets of foreign contractors. [Reuters, 3/4/2016]
Also of interest
Saudi Arabia expects GDP growth around 2 percent this year | Reuters
Egypt’s poorest struggle to find rice amid hoarding | Reuters
Egypt may stop sending inspectors abroad to clear imported wheat | Reuters
Tunisia, IBRD sign loan agreement to improve job prospects for graduates | TAP
Algeria defends bond issue | Algerie Presse Service
Turkey’s annual inflation rate decreases in February | Anadolu Agency
Bad loans in Turkey seen as worsening tourism situation | Bloomberg