Tunisia loans follow Crown Prince visit

Saudi Arabia will lend Tunisia $500 million (Dh1.8 billion) at a favourable interest rate and will finance two projects worth $140m, two sources told Reuters a day after a visit from the Saudi crown prince. Crown Prince Mohammed bin Salman met President Beji Caid Essebsi in Tunis as a part of a regional tour. Tunisia has struggled economically and is hungry for foreign funding.

“Tunisia will announce in a few days important deals with Saudi, including a loan with a low-interest rate, agreements on investment and other important details,” said Noureddine Ben Ticha, an adviser to the president.

The country is struggling to cut its budget deficit, stabilise falling foreign currency reserves and manage the expectations of international lenders who are demanding reforms, such as trimming the public wage bill.

Tunisia’s economy has been in turmoil since autocrat Zine El Abidine Ben Ali was toppled in a 2011 uprising sparked by anger at unemployment, poverty and record levels of inflation.

Under pressure from the International Monetary Fund, Prime Minister Youssef Chahed aimed to cut the budget deficit to about 4.9 per cent of GDP this year, from 6.2 per cent last year.

Prince Mohammed said Saudi Arabia enjoyed long ties with Tunisia. “I cannot come to North Africa without visiting Tunisia ... Tunisia’s president is like my father,” he said.

The visit was the fourth leg of his regional tour – which included the UAE, Bahrain and Egypt – before he travelled to Argentina for the start of the G20 summit on Friday.

But hundreds of Tunisians staged the first demonstrations in the Arab world against Saudi Arabia’s crown prince during his visit on Tuesday, denouncing him for the murder of Saudi journalist Jamal Khashoggi at the country’s Istanbul consulate. A group of senior aides and officials have been implicated and arrested for the murder, which Saudi officials said was carried out without the knowledge of the royal family.

Some Tunisians are also angry at Saudi Arabia for allowing Mr Ben Ali to live in Riyadh since fleeing Tunis after the 2011 protests.