Arab Monetary Fund extends more than $300m in loan to Tunisia and Morocco

The loans will support reform of public finances amid the coronavirus outbreak

An elderly man wearing a face mask due to the COVID-19 coronavirus pandemic walks with a crutch at the central market in the Tunisian capital Tunis. AFP

The Arab Moretary Fund extended new loan agreements of $211 million and $98m to Morocco and Tunisia as it looks to support reform programmes in the North African states amid the coronavirus pandemic.

The extension of the structural adjustment facility in Morocco will support the country’s public finance sector in the face of current circumstances, the AMF said in a statement.

"The AMF assistance in this regard comes as a support to the reform efforts of member countries and the measures they are taking to stimulate the economy and provide liquidity in order to contain the negative effects of the virus outbreak,” the fund said in a statement.

The coronavirus pandemic has hit the global economy, which is set to slide into a deep recession this year. It has forced governments to close borders, enforce movement restrictions and shut all but essential businesses.

Tunisia, meanwhile, will receive $98m to support reforms in its banking and financial sectors.

The Abu Dhabi-headquartered fund is currently studying financing requests from other member countries and is expediting the processing of new loan requests.

The AMF said it was remained keen to provide “financial and technical support” to its members.

Earlier this month, the multilateral fund extended a loan facility worth $59m to Tunisia to strengthen the country’s financial position in the wake of the coronavirus pandemic.

The pandemic has particularly hit tourism-reliant countries like Tunisia, which have had to close its borders to contain the virus. The North African country's economy is forecast to shrink up to 4.3 per cent this year, the steepest drop since its independence in 1956 due to the coronavirus pandemic, the International Monetary Fund said in April.

The fund also extended a loan facility worth $127m to Morocco in May to help the country counter the economic fallout from the pandemic.

The AMF is granting loans to a number of countries in the Middle East and North Africa to help them tide over the financial hit from the health crisis. Last month, the organisation disbursed a $38m loan to Jordan to support the country's economic reforms.

The AMF was founded in 1976 to supports its member countries to implement various economic and financial reforms to boost growth. Its member countries include the UAE, Bahrain, Saudi Arabia, Syria, Somalia, Iraq, Oman, Palestine, Kuwait, Lebanon, Libya, Jordan and Egypt