Tunisia will start negotiations with the International Monetary Fund (IMF) over a new credit program that will likely be worth at least $1.7 billion, its central bank chief said on Wednesday. The program will succeed a two-year deal totaling $1.74 billion that was agreed in 2013 and extended in May by seven months to buy time for Tunisia to put banking and fiscal reforms in place. Tunisia also agreed to follow certain economic policies, such as keeping its deficit under control and making the foreign exchange market more flexible. “We hope to have an agreement with the IMF around March. The IMF is in agreement in principle but there are many aspects to discuss before then,” Tunisian Central Bank Director Chadli Ayari said after meeting IMF Chief Christine Lagarde. “We agreed on the need to move forward as quickly as possible on the vast number of reforms still to be executed,” Lagarde said. “To maintain growth, create the conditions of prosperity and, above all, create employment, it is imperative to maintain security, macroeconomic and financial stability so that confidence can be restored” among domestic and foreign investors, she added. [Reuters, AFP, All Africa/TAP, 9/9/2015]

Egypt aims to cut arrears owed to foreign oil firms to $2.5 billion this year
Egypt is aiming to lower the amount of arrears it owes foreign oil companies to $2.5 billion by the end of 2015, according to Petroleum Minister Sherif Ismail. Egypt paid foreign oil companies $600 million in arrears in August and still owes them $2.9 billion, which is about 16 percent of Egypt’s reserves, according to Bloomberg. Delays in paying back foreign companies had discouraged investment in Egypt’s economy. Egypt’s Central Bank said Wednesday that the country’s current account deficit widened to $12.2 billion in the 2014/15 fiscal year, from $2.7 billion the previous year. [Reuters, 9/9/2015]

Eni CEO says Egyptian gas find estimate conservative, could be raised
The estimate of 850 billion cubic meters of gas for Eni’s giant gas find off the coast of Egypt is “conservative” and could be increased, the chief executive of the Italian oil and gas group said on Wednesday. “[The estimate] is conservative and could be raised; below we have found another field,” Claudio Descalzi said at a senate hearing in Rome. “We will see in 2016 when the exploration restarts.” He added that Eni expects between $6 billion and $10 billion of total investment for the development of the gas field. [Reuters, 9/9/2015]

Iraq’s foreign exchange reserves near $60 billion as oil prices fall
Lower oil revenues have cut Iraq’s foreign currency reserves to about $60 billion, which is enough to cover about eighteen months worth of imports, Central Bank Governor Ali al-Alak said on Tuesday. The government has projected a fiscal deficit of about $25 billion this year in a budget of roughly $100 billion. Foreign reserves fell to $66 billion at the end of 2014 from $78 billion at the end of 2013, according to the International Monetary Fund. However, Alak said that a drop in dollar-denominated expenditures has also eased demand on foreign currency. “Iraq is at the comfortable level of reserves,” he said. Reserves are decreasing on a monthly basis, he added, but “not that much.” Iraq’s economic activity shrank by 6.7 percent in the first quarter of 2015 compared to the same period last year. [Reuters, 9/8/2015]

UAE government to see surplus in budget in 2016, 2017
While the government of the United Arab Emirates (UAE) is expected to face a 2.9 percent budget deficit in 2015, budget surpluses are expected in 2016 and 2017, at 0.2 percent and 1.5 percent respectively. According to a World Bank official, the surplus in the next two years is a result of government reforms and strategies aimed at boosting non-oil sectors. “We’re not necessarily expecting oil prices to climb back, but governments are starting to adjust to the lower [oil] prices by changing their strategies… Such new strategies will improve the deficit and even result in a budget surplus,” said Hafez Ghanem, the World Bank’s Vice President for the Middle East and North Africa region. He praised the UAE’s decision to reduce fuel subsidies, adding that the Bank’s top priority in the UAE is developing and increasing investments from the private sector. [Gulf News, 9/8/2015]

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