Tunisia aims to issue $634 mln in Islamic bonds in 2013

Reuters, Thursday 8 Nov 2012

Using its developing sector for first time, Tunisia funds country's public borrowing through issuing of Islamic bonds next year

Tunisia's moderate Islamist-led government aims to issue 1 billion dinars ($634 million) worth of Islamic bonds next year, the first time the country has used the developing sector to fund public borrowing.

"One billion dinars will be available from the Islamic bonds in the 2013 budget‮‮‮‮ ‬‬‬‬for the first time," Finance Minister Slim Besbes told state radio.

Central bank governor Chadli Ayari told Reuters last month that Tunisia planned to issue Islamic bonds early next year.

Tunisia and other governments across North Africa are promoting Islamic finance in the wake of last year's Arab Spring uprisings, seeing strong growth potential in the sector which was shunned by previous regimes for idea logical reasons.

Tunisia's government is led by the moderate Islamist Ennahda movement which won elections last year that followed the ousting of former President Zine al-Abidine Ben Ali.

"Tunisia's budget will be 26.6 billion dinars in 2013 compared to 25.4 billion dinars last year," Besbes said.

"Sixteen billion dinars in the 2013 state budget will come from tax revenue," he said.

Tunisia's budget deficit should narrow to 6 per cent of GDP next year from 6.6 per cent of GDP expected in 2012, central bank governor said last month, indicating that economic recovery in the country where the Arab Spring revolts began may take longer than anticipated.

The Tunisian economy is gradually recovering from last year's political turmoil but faces problems as a result of the crisis in the euro zone, the main market for its exports and the source of most of its tourists.

Morocco, also led by a moderate Islamist party, is in a race with Tunisia to become a regional hub for Islamic finance.

In Tunisia, there are currently only two Islamic banks because of Ben Ali regime was cool towards the industry. Their assets total 1.4 billion dinars, or just 2.5 per cent of the combined assets of all Tunisian banks, according to the central bank.

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