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News from 2021-04-28 / KfW Development Bank

Tunisia receives EUR 75 million for implementing initial progress in public administration reform

KfW Development Bank has disbursed the first tranche of a EUR 75 million reform financing loan to support reforms in Tunisia's public sector.

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Ten years after the peaceful democratic upheaval, Tunisia still faces numerous challenges - the Corona pandemic was added to the list just over a year ago. On behalf of the German Federal Government, KfW Development Bank is supporting the country in implementing reforms, including in public administration, which many citizens perceive as inefficient and costly.

Especially in pandemic times, the provision of reform financing (Policy-Based Lending, PBL) is a valuable contribution to stabilising the state budget. The pandemic has also revealed some deficits in the public sector, which are now being addressed with the reforms that have been initiated. Among other things, they make it easier for citizens and businesses to declare and pay taxes via an online platform. This guarantees a secure source of revenue for the state even in times of pandemic and the associated restrictions. But it also protects citizens, who can safely make necessary declarations and payments over the net in times of pandemic.

Another facilitation: via a newly introduced citizen identification number, access to government services is facilitated and improved. Thanks to the new digital citizen number, low-income households were already able to benefit from targeted social security measures during the Corona crisis. This will enable more efficient processes for both the state and users of state services. The government plans to extend the use of the digital citizen number to other areas, such as education or the judiciary.

The Tunisian government plans to use the 75 million euros to cushion the costs of the reforms. In order to further improve state service delivery, the state's digital infrastructure is to be expanded. Citizens in rural, remote areas are also to benefit from new state service centres.

Payments are result-based

The payment is made within the framework of the German-Tunisian Reform Partnership, which emerged in 2017 as Germany's bilateral contribution to the G-20 initiative "Compact with Africa". The partnership initially focused on reforms in the banking and financial sector and was extended to the public sector in 2019. In total, KfW Development Bank is providing the Tunisian state with over EUR 600 million as part of the reform partnership.

On behalf of the German Federal Government, KfW, together with other bilateral and multilateral development banks such as the French AFD and the World Bank, is supporting the Tunisian government in making Tunisia's public sector more efficient and modern. For reforms in the public sector, the Tunisian Government was promised PBL financing in the form of three promotional loans with a total volume of up to EUR 300 million. The PBL payments are results-based: Only if the reform steps jointly agreed in a policy matrix - a three-year reform programme - have been implemented will the funds be paid into the national budget.


KfW Development Bank


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