Tunisia Banking Reforms: Country to restructure instead of privatizing public banks

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Concern is growing about Tunisia's state-owned banking industry. Some think the government needs to sell the public banks to private investors or carry out radical restructuring. CGTN's Adnen Chaouachi has more on what's at stake.

Many Tunisian economists and MPs have called for the privatization of the country's 3 public banks. They argue that this solution will help restoring public finance sustainability.

MOHAMED FADHEL BEN OMRANE MP, NIDAA TOUNES PARTY "Selling the public banks to private investors will provide up to 12 billion dinars to the state. This sum represents one third of the 2018 state budget. It will put an end to the economic crisis. It will also guarantee the economic efficiency of the banks in the future."

The opposition has rejected the project, denouncing what is described as a surge in privatization.

MOHAMED FADHEL BEN OMRANE MP, NIDAA TOUNES PARTY "Only public banks can take high risks. Every country in the world has at least 1 public bank. We must improve corporate governance and ease rules for public banks. The system is crippled by laws unlike the private sector."

The Finance Minister said during a hearing session at parliament that the government is restructuring the public banking sector. Ridha Chalghoum added that the country's 3 public banks will continue to play their role in financing the Tunisian economy.

RIDHA CHALGHOUM TUNISIAN FINANCE MINISTER "Restructuring began with the recapitalisation of these banks. The state does not currently plan to sell the public banks that will continue to operate in order to ensure the success of their restructuring programmes and show the public capital's ability to achieve positive results."

For decades, the public banks have financed the country's economy. 36% of the commitments and credits granted in this field belong to these public credit institutions. Now experts agree that the restructuring plan is an urgent economic reform in Tunisia.

ADNEN CHAOUACHI TUNIS "The Tunisian authorities have made it a priority to reform public banks. The prime minister's advisers assert that it is only one of about a dozen reforms involving the entire financial sector in the North African state. AC. CGTN."