Tunisia Lost $17.8 Billion in Foreign Currency Between 2006-2016: Report

Published May 9th, 2017 - 07:02 GMT
Tunisian demonstrators block the road with burning tires in the central city of Kasserine during protests, on 21 January, 2016, triggered by the death of an unemployed man. (AFP/ Mohamed Khalil)
Tunisian demonstrators block the road with burning tires in the central city of Kasserine during protests, on 21 January, 2016, triggered by the death of an unemployed man. (AFP/ Mohamed Khalil)

Tunisia has lost 43 billion dinars ($17.8 billion) in foreign currency equivalents over the period 2006-2016, due to the exception regime granted to non-resident companies in the law 72, according to an analysis note which has just been published by the Tunisian Economic Observatory (OTE), under the title "Law 72: A huge loss in foreign currency".

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During this period, if Tunisia had not granted this privilege, it would not have had to resort to external borrowing and would have a surplus of 16 billion dinars in foreign currency equivalents.

According to the argument put forward by the Observatory, companies under the offshore regime are, for the most part, non-resident companies within the meaning of Article 5 of Law 72.

Since these companies are not subject to the exchange rate regime, do not draw from the Tunisian Central Bank's foreign exchange reserves when they import, and in return are not obliged to repatriate to the Central Bank the currencies earned when they export.

However, these companies produce most of their products on Tunisian soil and should therefore be subject to the exchange rate regime.

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Since the difference between exports and imports is very positive for non-resident companies under Law 72, this creates a huge foreign exchange loss for Tunisia.

This loss is so great that it exceeds all the borrowing needs of Tunisia over the past 10 years.

If Tunisia had reintroduced non-resident companies under the foreign exchange regime over the last decade, it would not only have had to borrow from abroad, but it would still have in its fund the equivalent of 16 billion dinars in foreign currency.

This would make it possible to no longer appealing to the IMF and would give the Central Bank substantial means to defend the value of the Tunisian dinar, according to the findings of the Observatory.


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