Tunisia signs $500 Million loan guarantee agreement with the United States

Tunisia has signed a loan guarantee agreement with the US that will allow it to borrow $500 million from the international capital markets, Tunisian Finance Minister Slim Chaker announced on Friday.

“The value of this loan is $500 million, its duration is five years and the American guarantee will allow us to borrow at a rate of 2% or less, instead of 6% or 7% if we did so from the market, “said Chaker in an interview with a local radio station.

The agreement follows discussions held in May 2015 between US President, Barack Obama and Tunisia’s Beji Caid Essebsi and aims to “support Tunisia as it continues major economic reforms that will provide the foundation for growth and prosperity,” said the US State department in a statement.

This is the third loan guarantee that the United States is giving Tunisia after an agreement of $485 million in 2012 and another of $500 million in 2014, the State Department said.

Tunisia’s economy has strongly been affected by the instability that followed the 2011 revolution and by a series of jihadist attacks that have resulted in a dramatic drop in its key tourism sector.

In 2015, growth was less than 1% in Tunisia.

The country is also facing a high unemployment rate among youth and a drop in foreign investment.

The International Monetary Fund (IMF) announced, in May, it had given the green light for a new $2.9 billion aid package over four years for the north African nation.